A loan against car, also known as a car loan or auto loan, is a secured loan where you use your vehicle as collateral to obtain funds from a financial institution. This type of loan allows you to leverage the value of your car to meet your financial needs while still retaining the use of your vehicle. At Butterfly Fintech, we offer flexible Loan Against Car solutions designed to help you unlock the value of your vehicle quickly and conveniently.
How Does Loan Against Car Work?
When you apply for a loan against your car, the lender evaluates your vehicle's current market value and offers you a loan amount based on a percentage of that value. The loan-to-value ratio depends on whether your car currently has an active loan or is loan-free:
- If your car has an existing/active loan: You can get funding ranging from 100% to 200% of your car's current market value. This higher range allows you to refinance your existing loan and access additional funds for other financial needs.
- If your car is loan-free: The maximum funding ranges from 80% to 100% of your car's current market value, depending on various factors.
The exact loan amount you receive depends on several factors including:
- The make, model, and year of your vehicle
- The current market value and condition of the car
- Whether there's an existing loan on the vehicle
- Your credit history and repayment capacity
- The lender's policies and loan-to-value ratio
Once approved, you receive the loan amount while the vehicle is hypothecated to the lender. This is done by marking a lien on the RC (Registration Certificate) and updating the records at the RTO (Regional Transport Office). Importantly, you can continue using your vehicle for personal or business purposes during the loan tenure while the hypothecation is in place. The lien is removed once the loan is fully repaid. Lender doesn't hold the car registration document, the vehicle is hypothecated to the lender by marking lien on the RC and in RTO records
Key Benefits of Loan Against Car
There are several advantages to opting for a loan against your car:
1. Quick Approval and Disbursement
Since your car serves as collateral, lenders can process your loan application faster compared to unsecured loans. At Butterfly Fintech, we understand the urgency of your financial needs. Our streamlined Loan Against Car process ensures quick approval, and funds can be disbursed within 24-48 hours, helping you meet your financial goals without delay.
2. Lower Interest Rates
Secured loans generally come with lower interest rates compared to personal loans or credit cards. This makes car loans a cost-effective borrowing option. Butterfly Fintech offers competitive interest rates on our Loan Against Car products, making it an affordable solution for your financial needs.
3. Flexible Repayment Options
Most lenders offer flexible repayment tenures ranging from 12 to 60 months, allowing you to choose an EMI that fits your budget. You can also opt for prepayment or foreclosure options with minimal charges. Butterfly Fintech provides flexible repayment tenures and hassle-free prepayment options, giving you complete control over your loan repayment.
4. Continue Using Your Vehicle
Unlike other secured loans where the asset is held by the lender, you can continue using your car for daily commute or business purposes while repaying the loan.
5. No End-Use Restrictions
The funds from a loan against car can be used for any purpose - personal or Business - whether it's medical emergencies, business expansion, debt consolidation, or home renovation.
Eligibility Criteria
To be eligible for a loan against car, you typically need to meet the following criteria:
- Age: Between 21 to 65 years
- Vehicle ownership: You must be the registered owner of the car
- Vehicle age: Usually up to 10-15 years old (varies by lender)
- Income: Stable source of income with minimum monthly earnings as specified by the lender
- Credit score: A good credit score improves your chances of approval and better interest rates
Required Documents
When applying for a loan against car, you'll need to submit the following documents:
- Vehicle registration certificate (RC)
- Insurance papers
- PAN card
- Aadhaar card or other identity proof
- Address proof
- Income proof (salary slips, bank statements, IT returns)
- Recent photographs
How to Apply for Loan Against Car
The application process is straightforward, and at Butterfly Fintech, we've made it even simpler:
- Research and Compare: Compare interest rates, processing fees, and terms from different lenders. Check out Butterfly Fintech's competitive Loan Against Car offerings and see how we compare.
- Check Eligibility: Use our online EMI calculator to determine your loan amount and eligibility instantly.
- Apply Online: Fill out Butterfly Fintech's simple online application form with required details and documents. Our digital process saves you time and effort.
- Vehicle Valuation: Our team will assess your vehicle's value through a quick and convenient valuation process.
- Loan Approval: Once approved, review the loan terms and conditions. Our transparent process ensures you understand everything clearly.
- Documentation: Sign the loan agreement and submit original RC for lien marking. We guide you through every step.
- Disbursement: Receive the loan amount in your bank account quickly, often within 24-48 hours of approval.
Ready to unlock the value of your car? Apply for Butterfly Fintech's Loan Against Car today and get quick access to funds while continuing to use your vehicle.
Important Considerations
Before applying for a loan against car, keep these points in mind:
Always read the loan agreement carefully, paying special attention to interest rates, processing fees, prepayment charges, and default penalties. Ensure you understand all terms and conditions before signing.
Make sure you can comfortably afford the EMI payments. Defaulting on payments can lead to repossession of your vehicle. Also, compare offers from multiple lenders to get the best deal, and check if there are any hidden charges or fees.
Why Choose Butterfly Fintech for Loan Against Car?
At Butterfly Fintech, we're committed to making car financing simple, transparent, and accessible. Here's why thousands of customers trust us for their Loan Against Car needs:
- Quick Processing: Our streamlined application and approval process ensures you get funds when you need them most.
- Competitive Rates: We offer attractive interest rates that make borrowing affordable.
- Flexible Terms: Choose repayment tenures that suit your financial situation.
- Transparent Process: No hidden charges or surprises - we believe in complete transparency.
- Digital Convenience: Apply online, track your application, and manage your loan - all from the comfort of your home.
- Expert Support: Our dedicated team is always ready to assist you throughout your loan journey.
Conclusion
A loan against car is an excellent option when you need quick funds and have a vehicle to offer as collateral. With competitive interest rates, flexible repayment options, and the ability to continue using your car, it's a convenient financial solution for various needs.
However, it's crucial to borrow responsibly and ensure you have a clear repayment plan. Always compare different lenders, understand all terms and conditions, and choose a loan that best fits your financial situation.
Ready to Get Started? Experience the Butterfly Fintech difference with our Loan Against Car solution. Quick approval, competitive rates, and flexible repayment options await you. Apply Now Or explore our other car loan products: New Car Loan | Pre-owned Car Loan | Car Refinance