Securing a loan against your car is a smart alternative, but how do you secure one? Let's find that out.
Cars have become one of the most viable assets, for they are also an instant source of cash. But ever since the pandemic, there have been several kinds of economic challenges due to job loss, pay cuts, lower wages, etc. Such circumstance normally creates a need for money, and if you happen to own a car then maintaining it becomes very challenging. So, the urgent/desperate need for money may sometimes require you to take a loan. But if youre hesitant to take up a new loan, then you can getloan against your car with low-interest rates.
How to Get Loan Against Your Car?
Now there are several establishments right now, who offer loans up to 100% of the current market value of your existing car. But how do you secure these loans? What are the steps that one needs to follow in order to get a loan against one's own car? Don worry, we have got you covered with the following pointers:
Also Read: Here's Everything That You Need To Know About Car Loan Transfer
Eligibility Criteria
In order to secure a loan, you must first figure out if youre eligible to get a loan in the first instance. This information can be easily deciphered from your credit score aka CIBIL score. A healthy/good credit score usually ranges from 670-739, and if youre somewhere in between that or more than that, then youre in a better position to avail of the loan. The credit score is very important, and it single-handedly determines the rest of the loan application process. So, get your credit score sorted.
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Pre-existing Loan
Your credit score is determined by your pre-existing loan, and a good credit score only happens when you have made those payments in time. Now, if your current car is bought on loan, and you're still paying for it while wanting to sell it off. Then, with a good credit score, your car-lender will close the older loan and return the remainder of the loaned amount. This makes the matter very easy and is also one of the reasons why your car is such a viable asset.
Cars loan-to-value ratio
As has been mentioned before, your car has a definite value in the used-market segment. And there are many organizations that make the valuations. Get hold of one such organization, in fact, at least two or three organizations so that you can get several quotations on your car. That way you can make the sensible decision by getting the maximum amount of loan that you can avail against your car.
Also Read: Check Out These Things Before You Take Delivery Of Your New Car - Pre-Delivery Inspection Explained
Get the Best Deals
Multiple lenders will have different quotes, and this is very common for all types of loans. Of course, popular and well-known establishments will have deals along with some attractive offers as well. But sometimes small local banks or credit unions might have better and flexible options. So, do remember to put in this effort so that you dont get duped.
Also Read: 12 Used Car Buying Mistakes You Can Easily Avoid
Necessary Documents
Official documents are your identity, and like most loans, you must keep these official I.d papers handy. The list of documents are:
- Bank Statements
- Car RC
- Address Proof
- PAN Card
- Car Insurance
Its only once youve gathered these documents will the lenders be able to process your loans. So, if youre interested to seek a loan against your car. Do follow the above steps and get that money asap. So, do you now know how to get loan against your car? Let us know by joining our 91Wheels Telegram and 91Wheels Whatsapp to interact about anything on wheels with like-minded individuals. Also, connect with us on Facebook, Instagram, and Twitter for more about vehicles!
