All you need to know about taking a loan against your car
The applicant can visit a bank or finance company website to avail loan against car. No guarantor is required for this loan, as the car itself is the security.
The applicant can visit a bank or finance company website to avail loan against car. A loan application form can be filled which asks for details such as car make, model, year of manufacture, purpose of use (personal/commercial). Once these details are filled and submitted, a bank representative approaches the applicant to complete the formalities. This includes filling up of a physical form for loan application along with necessary documents.
Bank details, copies of income tax returns for the last 2-3 years and copy of bank statement need to be furnished with the application form. Along with this, KYC documents such as identity and address proof and photograph also need to be provided.
Once documents are submitted, a verification and valuation process is initiated by the bank/finance company to arrive at the current value of the car. The loan is decided on the basis of this value.
Loan processing charges, documentation charges are payable at the time of loan disbursal. Loan is provided for a duration of 18 to 60 months.
Points to note
- Loan may not be processed against a commercial vehicle or one with a yellow number plate.
- No guarantor is required for this loan, as the car itself is the security.
(The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)