When one faces a need to arrange for funds at a short notice, assets owned can come handy. Instead of liquidating the assets, one can arrange finances on the basis of the security of the assets. On the same lines, it is possible for a car owner to avail quick funds against the security of the car. Loan can be availed at a fast pace and at a relatively cheaper interest rate as compared to a personal loan.
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.