Type of Car Loans in India: Which is Better?

A car loan is perfect for financing your four-wheeler purchase. Whether you are buying a car for the first time or want to upgrade to a new one, getting the correct type of car loan would help you get the maximum amount with flexible EMI options. Read on to learn about different types of car loan options, eligibility, documents required, and how to apply. 

3 Major Types of Car Loans in India

Following are some of the major types of vehicle loans available for purchasing your dream car:
1.    Loan for a New Car
With a new car loan, buy your dream vehicle from the showroom easily and pay off the price in simple instalments. Also, there are brand-backed warranties and fewer servicing requirements for new cars compared to old vehicles, minimising additional costs. 
2.    Loan for a Used Car
A Pre-Owned Car Loan helps you purchase a used vehicle and get lower dealership fees, insurance rates and registration costs. Numerous lenders offer a Used Car Loan of up to 100% of the vehicle's value. 
3.    Loan Against Car
If you are facing a shortage of funds, you can collateralise your vehicle to obtain a loan. Financial institutions usually offer a substantial loan amount and sufficient repayment duration to pay off the loan comfortably.

ALSO READ :- 8 Tips to Reduce Your Car Loan Interest Rate…!

New Car Loans vs Used Car Loans

Selecting the right car loan can be confusing at times. Here is a thorough comparison of a new car loan and a used car loan to help you make the best decision:

Although a new car loan has better terms than a used car loan, the low prices of pre-owned cars make them a more affordable option. Let’s learn more about used car loans. 

Features of a Pre-owned Car Loan

Here are the important features and benefits of a Pre-owned Car Loan:

• Higher Loan Amount: Get funding of up to ?75 Lakh to easily purchase a pre-owned car of your choice. 
• Competitive Interest Rates: Competitive interest rates and lucrative repayment terms make owning a four-wheeler affordable.
• Simple Application Process: The application process for a Pre-owned Car Loan is completely online and can be completed in just a few taps.
• Flexible Repayment Tenure: Choose a convenient repayment tenure within 72 months and pay off the borrowed amount in simple instalments.
• Minimal Documents Needed: Submit only a few documents to complete your credit application. 

To Conclude

The availability of different types of car loans makes it easier for you to choose the most appropriate credit type. Moreover, you can save substantially on the loan cost and repay the loan as per your convenience. Apply for an Old Car Loan with Poonawalla Fincorp and fulfil your dream of buying a four-wheeler you have admired for a long time.

Frequently Asked Questions About Car loans in India

1.    What are the documents needed when applying for a car loan?
You will need to upload some basic documents when applying for a car loan. These include KYC documents like scanned copies of government ID cards, income proof, bank account statements, card documents, etc. 
2.    When should I apply for a loan against my car?
You can apply for a loan against a car when the interest rates are lower than before, you have the required credit score and there is flexibility in choosing the loan duration based on your repayment capacity. 
3.    How can I determine the monthly instalments for a car loan?
To determine the instalments of a car loan, move to the official website of a financial institution. Navigate to its online car loan EMI calculator page. Enter the loan amount, interest rates and tenure and click on the ‘Calculate’ button to see the EMI amount.
4.    What are the car types for which I can apply for Pre-Owned Car Loans?
You can apply for a Pre-Owned Car Loan when buying hatchbacks, SUVs, sedans, premium cars, and other vehicles.