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Vehicle Loan-Types, Features

Vehicle loan is a type of secured loan provided to you for the primary purpose of financing the purchase of vehicle. Learn about the types of vehicle loan and its features and benefits here.

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Vehicle Loan-Types, Features

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  1. Vehicle Loan-Types, Features

  2. Vehicle Loan Definition Vehicle loan is a financial product taken to purchase a vehicle with minimal initial payment from your own pocket. The acquired cash from the lender can be repaid in equal monthly installments over a period of time with interest rate.Generally, car loans are secured. If the loan is not repaid within the specified time period, the lender can posses your car and sell it off to end the dues.

  3. Types of vehicle loan In India, the loan for a vehicle comes in different basic types as listed below. New car loan: This option is for the people who want to buy brand new car. Banks offer interest rate of 9-14% p.a. For new car loans for a loan tenure of 1 to 7 years. Used car loan: This loanis used toused to purchase pre-owned or used cars that are less than 5 years old or doesn’t exceed more than 10 years at the time of loan maturity. Bank’s and NBFC’s will finance up to 80-85% of the price of the car at an interest rate of 12-18% p.a. for a loan tenure ranging from 1 to 5 years.

  4. Commercial vehicle loan: A business person or an individual who owns a business can choose commercial vehicle loan for their business purpose. The interest rate of commercial vehicle loan is in the range of 10-15%. Two wheeler vehicle loan: As the name indicates, this type of loan is for the people who want to purchase a bike. The two wheeler vehicle loan interest rate comes with range of 11-18% on the amount paid for the bike.

  5. Features and Benefits ● ● The documentation for availing vehicle loan is simple and easy. Banks offer 85%-90% vehicle finance of the on-road price of the car. Some banks offer up to 100% financing on the vehicle’s on-road price to certain conditions. The vehicle loan tenure range from 1 to 7 years The vehicle loan amount can be up to, three times the annual income of the applicant. Most vehicle manufacturers have a smoothed out process where the loan application and handling are done on a tight timeline. ● ● ●

  6. How to Apply? ● ● You can apply online through the bank website. Compare the rates and charges of various banks. Select the best offer that suits you. Login to the lender’s website and fill the personal details. Upload all the required documents. Once the application is forwarded to the chosen bank, they will verify the documents and calculate your eligibility based on the car value. ● ●

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