Did you know you can use your car to raise quick funds? Get answers to your queries about loan against car here.
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What exactly is car refinance?
Let’s start with the basics. Car refinance means paying off your current car loan with a new loan with more favorable terms (such as interest rate, EMI amount, and loan tenure) from the same or a different lender. However, you can also get a loan against car when you don’t have an existing loan running on your car.
Why should I refinance my car loan?
One of the key factors to consider when deciding whether car refinance is right for you is the terms of your original car loan. If the loan you took has a high-interest rate or comes with a hefty EMI, then refinancing your car loan will help to ease your financial burden by providing you with a loan that’s easier to pay back.
But that’s not the only reason to opt for a loan against your car. If you’re in need of some funds, a loan against car is an easy way to get cash instantly. You can refinance your existing car loan and use the leftover amount as required.
For example, if the pending amount to be repaid on your car loan is ₹2 lakh and you get a loan against car of ₹3 lakh, you can use the extra ₹1 lakh to pay for an emergency such as hospitalization or a business need or for any other expenses.
Don’t have an existing loan? You’ll have the entire loan amount to spend.
When should I refinance my car loan?
Your car loan can be refinanced by taking a top-up loan against your car once you’ve made 12 EMI payments on your existing car loan. Or, whenever you need funds if you don’t have an existing car loan, as getting a loan against car is cheaper and often easier than getting a personal loan or business loan.
What documents do I need to refinance my car loan?
You only need minimal documentation to apply for car refinance such as your account statement, your KYC documents, a copy of your PAN card, and the RC of your car. If you have an existing car loan, you also need to provide a 6-month bank statement of the account from which your existing EMI is paid.
How long does it take to get approval?
You’d be surprised at how quickly you can get a loan against car. The loan can be approved in under 48 hours and the money goes straight to your account.
What is the maximum loan amount I can get?
Depending on the car you have, you could be eligible to get a loan against car of up to ₹50 lakh.
What is the loan tenure for a loan against car?
While loan offers are available for up to 5 years, the actual tenure for your loan against car is determined by the age of your car in months subtracted from a set limit of 120 months. So, if your car is six years old or 72 months, then your loan tenure will be 120-72 = 48 months or 4 years.
What happens to my existing car loan?
Your existing car loan will be paid in full to your current car loan financier and your car loan will be considered closed.
What exactly is the loan closure process for my existing car loan?
To close your existing car loan, you need to provide the foreclosure statement of your original loan. We’ll prepare a cheque for the required amount and deposit it on your behalf to the financier. At the same time, we will also request them to supply a No Objection Certificate or NOC, which will be delivered to your address. Done. Your existing car loan will be closed.
What happens once I get the NOC?
The NOC will be collected by our executive and we can then go ahead and make the Hypothecation Change on your original RC.
What if it takes too long to get the NOC? Will I still get the loan amount in 48 hours?
Yes. Once you provide your original RC, 90% of the loan amount will be deposited into your account. The remaining 10% will be deposited once the NOC is received and collected.
What is hypothecation? Why is a hypothecation change required when I refinance my car loan?
As you know, a loan against car is a secured loan, which means you have to pledge an asset against which you are taking the loan – in this case, your car. ‘Hypothecation’ means you as the owner retain the interest and ownership of your car, but if you are unable to repay the loan, the lender or financier has every right to seize the vehicle.
When you hypothecate your car, you pledge your car, it’s as simple as that. But unlike other secured loans, such as a gold loan, you don’t have to keep your physical car with the lender, you can continue to use it.
So, when you took your original car loan, the hypothecation was in the favour of the original financier. When you take a loan against your car and the original loan is closed, the hypothecation needs to be changed in the favour of your new lender.
What happens to hypothecation once I repay my loan against car?
Once you’ve finished repaying the loan against your car, you’ll get a No Objection Certificate (NOC) from the financier and can easily take that document to the RTO to release your car from hypothecation.
Why should I pick Rupyy to refinance my car loan?
Our 48,135 satisfied customers have never had to ask, but if you’re wondering why CarDekho is your best bet when it comes to car refinance, there’s plenty of great reasons to choose us.
Like the fact that we’re affiliated with all the leading financiers in India (so you can even get a loan against car from your current car loan financier!) Or that we offer the most hassle-free doorstep service so you barely have to lift a finger to get a loan against your car. Or even our presence in 27 cities and 65 locations across the country and an impressive record of over ₹3200 Cr worth of loans processed to date.
Have more questions? You can check out the FAQ section here Or, if you’d like to see how car refinances could work for you, just click here for great offers and assistance.