Loan Against Car is a secured loan where your vehicle, i.e., your car is used as collateral to access quick funds without selling it. Lenders can finance up to 200% of the car’s value, depending factors such as the features of the car, applicant’s credit profile, etc. Proceeds of the loan can be used for any purpose, except for speculative activities. With no end use restriction, quick processing and minimal documentation, Loan Against Car can be a hassle-free credit solution for funding urgent financial needs — all while you continue to use your car.
| Loan Against Car – Highlights | |
| Interest Rate | Starting from 10% p.a. |
| LTV Ratio | Up to 200% of the car value |
| Tenure | Up to 7 years (84 months) |
| Processing Fees | Up to 2% of the loan amount |
Loan Against Car Interest Rates
The interest rates on Loan Against Car may vary from one lender to another. The final interest rates offered would depend on various factors including the applicant’s credit profile, lender’s internal risk policies and features of the pledged car such as its age, make, condition, etc. The interest rates offered by some of the Loan Against Car providers are:
| Lenders | Interest Rates (p.a.) |
| HDFC Bank | 13.75% |
| IDFC FIRST Bank | 14.49% |
| Bajaj Finserv | 10%-19% |
| Tata Capital | 10.75% onwards |
| Axis Bank | 15.5%-17.5% |
| AU Small Finance Bank | 14%-21% |
Rates as of 5th May 2025
Features & Benefits of Loan Against Car
The key features and benefits offered on Loan Against Car are listed as below:
- Loan amount of up to 200% of the car’s value; varies across lenders
- Tenure up to 7 years, which may exceed on case-by-case basis
- No end use restriction except for speculative activities
- Pre-approved offers for select existing customers
- Top up loan facility for meeting additional fund requirements
- Minimal documentation for pre-approved customers
- Instant or same-day disbursals for existing customers
Eligibility Criteria for Availing Loan Against Car:
The eligibility criteria for availing Loan Against Car varies across lenders. However, a common set of eligibility criteria is given below:
| Eligible Profiles | Individuals (Salaried and self-employed professionals/non-professionals) Non-individuals (Pvt. Ltd., Public Ltd., Partnership Firm, Proprietorship Firm, Co-operative societies, Trust and HUF) |
| Min. Age | 18-21 years when applying for the loan |
| Max. Age | 80 years at the end of the loan tenure |
| Employment Type | Salaried and Self-employed |
| Min. Salary | Rs 20,000 |
| Total Work Exp. | At least 1 year; some lenders also require work experience with the current employer |
| Annual Income | At least Rs. 2 lakh |
| Business Continuity | Business must be in existence at least for the past 2 years |
| Credit History | Available to new-to-credit customers & those with established credit history |
| Collateral | Most lenders accept all personal vehicles (cars) as collateral except those which are discontinued |
Documents Required for Availing Loan Against Car
| Proof of Identity | PAN card, Aadhaar card, Passport, Voter ID, Driving license |
| Proof of Address | Aadhaar card, Driving license, Passport, Utility bills |
| Proof of Income for Salaried | Form 16, Salary slips, Bank account statements, etc. |
| Proof of Income for Self-employed | Last three months’ bank statements, Income Tax Returns (ITR) or audited Balance Sheet and Profit & Loss Statements |
| Vehicle Documents | Copy of the Vehicle Registration Certificate and Insurance |
| Other Documents | o Net banking or Debit card details to set up e-Mandate o Proof of signature o Photographs |
Loan Against Car Processing Fees and Other Charges
Loan Against Car processing fees may vary widely based on lenders and credit profiles of loan applicants. To give a fair idea of the key fees and charges, read the table below:
| Particulars | Charges |
| Processing Fee | Up to 2% of loan amount |
| Prepayment Charges | Up to 6% of principal outstanding |
| Foreclosure Charges | Up to 5% of principal outstanding |
| Penal Interest | Up to 2% per month on the overdue instalment |
| RTO Transfer Charges | At actuals |
| Car Valuation/Asset Verification Charges | Rs. 750 per case |
| Stamp Duty (non-refundable) | At actuals |
Steps to Apply for a Loan Against Car at Paisabazaar
Step 1: Enter your mobile number in the application form
Step 2: Enter OTP to verify your mobile number
Step 3: Provide your personal details
Step 4: Provide your car details
Step 5: Compare offers and apply for the best-suited loan
FAQs on Loan Against Car
What is loan against car?
It is a secured loan option wherein a consumer pledges his car as collateral to raise funds against it.
Who can avail loan against car?
Anyone who owns a car and meets the minimum eligibility criteria and furnish the required documents can avail loan against car.
Is a guarantor required for availing loan against car?
Adding a guarantor is not required as your pledged car acts as a security.
Can I continue using my car even though I have pledged it with the bank?
Yes, Loan Against Car borrowers can keep the pledged car in their position and continue using it. However, the lender will have a lien on the car’s title, which implies that your lender has the legal claim over it till complete repayment of the loan. In case of loan default, the lender may repossess the car to recover the outstanding amount.