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Why Choose a Personal Loan to Buy a Car?

December 18, 2023 • 632 views

Buying a car is no longer a luxury, it is a necessity. But did you know? You can opt for a car loan or a Personal Loan to purchase a car of your choice. Where a car loan helps you cover 80-90% of the car’s value, a Personal Loan covers 100% of the car's value, including the downpayment and the cost of accessories.  Get one step ahead of owning your car by understanding why choosing a Personal Loan to buy a car may be a wise choice. Let’s begin!

Why Choose a Personal Loan to Purchase a Car?

Here are the 6 benefits of getting a Personal Loan to buy a car:

1. Collateral-free

One of the primary benefits of personal loans is they are collateral-free. This means you don’t need to pledge your valuable assets as security. 

2. No Restrictions on End-use

Unlike car loans, which are exclusively for vehicle purchases, a Personal Loan can be used for various purposes. It may be a better option if you want to add costly extras such as tax, insurance, and vehicle customisation.

3. Affordable Interests

The interest rate of your loan depends on your credit score. The interest rates are usually lower when your credit score is high. Generally, having a CIBIL score of at least 750 is considered good to qualify for a Personal Loan. Moreover, a higher CIBIL score will likely boost your chances of fast-tracked approvals and better terms.

4. Hassle-free Application

Applying for a Personal Loan is relatively faster and involves fewer documents than auto loans. Simplicity makes it easier as it doesn’t take much time and effort. Few lenders have an online application process. This allows you to apply from home, office, or anywhere else.

5. High Loan Amount

You can avail yourself of a loan up to Rs. 30 Lakh – a significant loan amount you can use to buy a car of your choice. However, you must calculate the total cost before applying for a Personal Loan to buy a car.

6. Flexible Repayment Tenure

A Personal Loan from a trusted lender like Poonawalla Fincorp provides the option of repaying the loan conveniently through flexible EMI options. You can easily repay the Personal Loan over a few months without having to pay for your car in one go. 

Why Choose Personal Loan Over Car Loan?

Here are some key differences that can help you make a right decision while opting for a loan:

Personal Loan

Car Loan

Unsecured

Secured

No end-use restriction 

Restricted to car financing

Covers complete cost

Covers 80-90% of the car’s value

 

Eligibility Criteria for a Personal Loan

Here are the eligibility criteria for Personal Loan for a car:

  • Age: Your age must be between 22 to 57 years at the time of loan application.
  • Citizenship: You must be a citizen of India
  • Employment: You must have a full-time job in reputable Government agencies, PSUs, MNCs, Listed or Unlisted Public Companies, Pvt Ltd, LLPs, or companies listed internally.
  • Work Experience: A minimum of 1 year of work experience with 1 year with current organisation.

Documents Required for Personal Loan

While applying for a Personal Loan, you need to submit the following documents:

  • KYC Documents: Aadhaar Card or PAN Card.
  • Current Address Proof: Utility bills/rent agreements/passport.
  • Income Documents: Latest salary slips.
  • Financial Documents: Bank statement for the last three months.
  • Employment Proof: Official mail ID confirmation/Employee ID Card.

Also Read - 8 Things to Do Before You Buy a Classic Car

How to Apply for a Personal Loan for a Car?

Getting a Personal Loan from Poonawalla Fincorp is simple. Here’s how you can apply for a loan online:

Step 1: Click on the ‘Apply Now’ button.

Step 2: Fill in the required details on the loan application form.

Step 3: Upload necessary documents.

On successful verification, the loan amount will be disbursed into your bank account instantly.

Also Read - 18 Important Features to Check Before Buying a Pre-owned Car   

To Conclude

A Personal Loan may be a smart choice for buying a car. From high loan amounts and flexible EMIs to no restriction on end-use - a Personal Loan has several benefits. However, you must check the eligibility criteria and documents required before applying for a loan. Ensure you have a good credit score to improve your chances of loan approval and get affordable loan terms.

Disclaimer

We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Personal Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply

poonawalla fincorp team

Poonawalla Fincorp Team

Our team of expert writers and editors are passionate about providing authentic and valuable information on finance. Our aim is to simplify financial and finance-related concepts. We strive to help our readers become more aware and empowered to make informed financial decisions.

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