If you need money, then you can take a loan on your car as well
If suddenly there is a need for money and you do not know any other way, then you can take a loan against your car. Both banks and non-banking financial companies (NBFCs) offer 'loans against cars'. Loan is available from 50% to 150% of the current cost of the car. For 1 to 7 years, this loan is available at 13 - 15% interest per annum. The processing fee is 1 - 3%.
Eligibility for Loan against Car
- The age of the applicant should be minimum 21 years and maximum 65 years.
- The applicant should have a fixed income source like job or business.
- Banks and NBFCs usually give loans on cars less than 10 years old.
Required Documents
- Voter ID Card / Photo Ration Card / Passport
- PAN Card, Aadhaar Card
- Income tax returns of three years
- Salary slip of three months
- Salary Account Statement
- RC of the car
- Car insurance papers
Banks see the track record
Most of the banks look at the loan repayment track record of the applicant for at least 9 months before sanctioning the loan against car. Your loan will be available only if you pay all the EMIs of the existing loan (if any) on time.
Financial Planning Tip: Loan against Car vs Real Estate Investment
Many people use a loan against car as short-term funding while planning for bigger investments like property. In Bhopal, demand for
3BHK apartments is rising due to affordable housing loans and better lifestyle amenities. If you are planning a long-term investment, explore
quality construction flats in Bhopal.
FAQs on Loan against Car
- Q: Can I get a loan against my old car?
A: Most banks and NBFCs provide loans on cars up to 8–10 years old, provided the vehicle is in good condition.
- Q: What is the maximum amount I can get on a loan against car?
A: You can get up to 150% of the car’s current market value depending on the lender and your credit score.
- Q: Is it better to take a car loan or invest in property?
A: A loan against car is best for urgent short-term needs, while property like
RERA-approved flats in Bhopal is a long-term secure investment. Always balance short-term finance with long-term assets.
- Q: How do I verify loan terms?
A: Always compare banks and NBFCs, and check the official MP RERA portal for legal property guidelines if you are linking it with real estate investment.
