I need money for some personal use. I was all about to apply for a PL when a friend advised me to go for a loan against my car as it is cheaper. What do you suggest?


#1

I need money for some personal use. I was all about to apply for a PL when a friend advised me to go for a loan against my car as it is cheaper. What do you suggest?


#2

Your friend is actually correct in his assessment. If you opt for a personal loan, the unsecured nature of the loan means you will be charged higher than a loan against car which is a secured loan. Axis Bank for example charges a rate of interest of 14.50% for loan against car compared to a 15.50% to 24% interest rate charged for personal loans. So a loan against car works out to be far cheaper than a personal loan which makes it a better option for a financial emergency. But before you apply note that banks usually do not offer a loan against cars older than 6 years


#3

I am looking for a crowd funding platform and someone suggested me Rang De as a god option. Any reviews on the platform?


#4

Before you look out for a crowd sourcing platform to raise money know that as per the SEBI guidelines, companies are allowed to raise a maximum capital of Rs 10 crore in a year through crowd sourcing. Rang De is one of the oldest crowd funding platforms in India with operations back to 2008. Rang De has been beneficial in offering funding to people of low income group and rural area brining down the cost of micro credit. Rang De in a nonprofit organization but earns a nominal commission of 2% of all loans repaid by their borrowers.


#5

Hi Viraj,

Banks usually don’t give loans against cars that are more than 6 years old. If you need a Loan against your car, the bank will provide a pre-fixed value for your car and your car will be used as collateral security.

When you get a Loan against Car, you will need to hypothecate your car to the bank. This means you cannot sell the car before you pay off the loan availed against the car. There are many benefits to getting a Loan against Car.

 Lower Interest Rates. The interest rates offered by banks on a Loan against Car are lower than the rates for Personal Loans, as a Loan against Car is a secured loan.
 A Good Credit Score = Higher Loan. If you have a good financial track record and a good credit score, banks will offer you between 70-85% of the current price of your car.
The final loan amount offered by the bank depends on these factors
 The age of the car
 The vehicle model
 The overall usage
 The popularity of the model

Looking for a Car Loan? Click here.

Cheers,
BB Expert