Different Loan Option for Vehicle/Auto Finance
New Car Loan
A New Vehicle Loan is considered as a secured loan in which the borrower keep his car/bike as collateral to the bank / NBFC against the loan. If you plan to buy an expensive car but your available funds are not sufficient, here the auto loan comes into the picture. With a solid credit score and proper documentation, one can easily obtain a car/bike loan from a leading bank / NBFC. They provide upto 85-90% of the finances on the x-showroom or on-road value of the vehicle. The tenure could be up to 7 years for the car loan and up to 3 years for the bike loan.
Used Vehicle Loan
A used car/bike loan is a variable of the auto laon. It is a type of secured loan in which the borrower has to keep his vehicle as collateral to the bank / NBFC against the loan. By taking this loan, one can easily buy an expensive car/bike. The price of a second-hand vehicle is always low compared to its price when it was bought as a new one. By taking a loan for a used car or bike, one can buy an expensive luxury vehicle at lower rates. The price of the vehicle is decided according to its current cost on the road and its condition. Bank still consider the credit score and proper documentation before approving the loan, one can easily obtain a used vehicle loan from a leading bank / NBFC. They provide 60% to 70% of the finances based on the current value of the car/bike on the road. The maximum tenure on a used car loan is 5 years (60 months) and the interest rate starts at 15.50% *.
Vehicle Refinance Loan
The auto refinance loan is a type of secured loan. You can leverage the funds by keeping your car as collateral from the bank or NBFC. This type of secured loan is becoming popular day by day. Banks and NBFCs are also willing to grant this loan. By opting for a car loan, smaller loan amounts can be obtained for a shorter tenure. Until your car is held as collateral from the bank, you can still use your car. Banks make loans based on the current condition of the car, the borrower's financial history, credit score, ability to repay the loan, and other debt obligations. The loan amount is decided based on the current highway value of the car. Banks grant a loan amount of up to 60% to 70% of the value of the car for a maximum period of 60 months, that is, 5 years.
Car Loan Top-up
If you think you need an additional amount on your existing car loan, then you should go for a car loan top-up. The additional loan amount is known as a Top-up loan. The lender awards the additional amount based on your CIBIL score, current debt obligation, and ability to repay the loan. The interest rate increases slightly when you opt for a car loan top-up. The amount of the top-up loan depends entirely on the value of the car and the borrower's profile.
Features & Benefits of Auto Loan
When it comes to auto loans in India generally the following features and benefits are offered. Please note that the following is an overview of the advantages that auto loans offer. Individually, auto loan lenders can have highly personalized and specialized offers for their customer base- It helps you purchase a car even if you don’t have all the money for it right now.
- Most car loans will finance the on-road price of the car.
- Some car loans will even finance 100% of the on-road price. This means no down payments.
- With some banks offering financing in the crores, you are not limited in your choice of cars
- Most car loan offerings in India are secured loans. This implies that the car serves as the security/collateral for the loan.
- Procuring a car loan is usually simple when compared to other loan products. Individuals with slightly unsavoury credit scores can also hope to procure one. However, this option differs from bank to bank.
- Car loans in India often offer fixed interest rate options. This means, you are always assured of a fixed amount that needs to be repaid monthly.
- Many lenders will offer interest rates based on your credit score so a high score to get you a cheaper loan.
- Car loans are not meant for just new cars. A used car loan can help you buy a pre-owned car.
Eligibility Criteria to avail Auto Loan
- Age between 18 years and 75 years
- Minimum net monthly income of Rs. 20,000
- At least 1 year of employment with the current employer
- Must be salaried or self-employed, working for a government establishment or a private company
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