Need cash urgently? Here’s how loan against car can help you

Need cash urgently? Here's how loan against car can help you

New Delhi: It is always advisable to keep a buffer for rainy days. But if you do not have any savings to fall back upon in case of an emergency like hospitalisation or job loss, then your assets can come handy in these situations.

Like, gold and fixed deposits, your car can also get you an emergency loan. It is possible for a car owner to avail quick funds against the security of his car. Loan can be availed at a fast pace and at a relatively cheaper interest rate as compared to a personal loan.

Here is all you need to know about loan against car

One can avail a loan against his car if it is less than five years old. Typically banks offer between 50-150% of the market value of the car as loan. While the interest rate on these loans varies between 11-16%, banks also charge a processing fee between 1% to 3% of loan amount. Loan against car can be taken for a period of 1-5 years.

How to avail loan against car

The applicant needs to visit a bank or NBFC to avail loan against his car. A loan application form needs to be filled which asks for details such as car make, model, year of manufacture, purpose of loan (personal/professional). Once you fill these details, a bank executive approaches the applicant to complete the formalities. You need to submit all necessary documents to the bank executive.

Documents required

The loan applicant needs to submit KYC related documents like identity proof, address proof, photograph along with other documents like bank statement for last six months, copies of income tax returns for the last 2-3 years.

Process

Once you submit all the required documents, 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.

Worth mentioning here is that private sector lender HDFC offers a top-up loan up to 150% of the value of the car you own. HDFC Bank does not require the valuation of the car to get the loan. If you are a netbanking user and are eligible to use the QuickMoney facility, you can get the loan amount in less than 12 hours.

[“source=timesnownews”]