What is Vehicle Loan and its Different Types: If you are planning to buy a car of your own but you do not have sufficient amounts, banks and financial organization let you borrow funds at an interest. Buying a car is a dream of many people but they cannot afford it due to high cost. You can easily apply for a Vehicle Loan from the growing lending sector of India to fulfill your dream of owing a car. Generally, there are three types of car loans available in the market i.e. New Car Loan, Used Car Loan and Loan Against Car. Today in this article we will share with you What is Vehicle Loan and its Different Types.
What is Vehicle Loan and its Different Types
A car loan or vehicle loan is a types of loans that allows you to buy two and four wheelers for your personal use. You can also apply for a loan to purchase these vehicles to transport goods or company personnel. Your eligibility to apply for a vehicle loan depends on your credit score and net monthly income. You can also get a loan to buy pre-owned cars and other pre-owned vehicles.
Types of Vehicle Loans in India
You can take a vehicle loan from a lender to purchase various kinds of vehicles in India. There are some of the basic types of vehicle loans mentioned below that is offered by Indian lenders.
- Car Loans:- You can get a car loan to buy a brand new car of your preferred brand. Typically, lenders offer you to finance up to 90% of the car’s on-road value, while you have to pay the remaining 10% as a down payment. The on-road price of a new car includes the insurance costs, road tax, ex-showroom price, Regional Transport Office (RTO) registration charges, etc. A car loan usually comes with a repayment period of seven years. You can repay the car loan at affordable EMIs over the tenure of your choice.
- Two-Wheeler Loans:- A two-wheeler loan as the name suggests is designed so that you can secure additional funds while purchasing your vehicle. With this loan, you can purchase motorbikes and non-geared scooters. Most lenders offer you to finance up to 100% on Two-Wheeler Loans, with a maximum repayment period of five years. To get this loan you have to proof of income and credit score.
- Pre-owned Car Loans:- Another types of car loan you can choose for is a pre-owned Car Loan. Buying a pre-owned car is a cost-efficient alternative to buying a brand-new car. Typically, lenders offer you to finance up to 75% against pre-owned cars. However, the age of the vehicle and the new repayment period should not exceed eight years.
READ ALSO:- What is the Motor Insurance
Who is Eligible For a Car Loan?
In above we learned what is vehicle loan and its different types. Any individual between 21 to 65 years with a good credit score can apply for a vehicle loan. Whether you are a salaried person or a self-employed, an applicant’s minimum annual income requirement should Rs.2 lakh. At the time of processing a car loan application, banks look at the applicant’s credit history as it shows the credit management skills of the individual. Having a credit score will make you eligible for a vehicle loan.
Best Car Loan Providers
Here is the list of best motor loan providers in India –
How to Apply For a Vehicle Loan?
Do you want to apply for a motor loan? The follow these simple steps mentioned below –
- Step:- 1 Visit the official website of the car loan provides.
- Step:-2 On the homepage, you will find “Motor Loan” option.
- Step:-3 Click on the link and choose the types of car loans.
- Step:-4 Now complete the vehicle loan application with your details.
- Step:-5 Finally visit the nearest branch of the car loan providers.