In 2025, one of the easiest ways to get funds without having to sell your vehicle is to use it as collateral for a loan. This financing opportunity can help you unlock the value of your vehicle, take care of your financial needs, while keeping the vehicle in your possession, and repay the loan in comfortable and manageable payments.
Know About Loan Against Vehicle:
Also referred to as car equity loan, it effectively enables you to borrow a certain sum of money, by effortlessly keeping your vehicle as collateral. Loan against vehicle is certainly secured, as it allows the lender to seize your vehicle if you aren’t able to repay the loan amount due to any circumstances.
Know About Eligibility Criteria:
To be eligible for a loan against a vehicle, it is crucial to fulfill the following conditions:
#1 Age criteria:
For getting a loan against vehicle, it is vital for the individual to be 18 years of age but not higher than 80 years at the completion of the loan period.
#2 Employment criteria:
Another important condition to fulfill for getting a loan against your car is to be employed or self-employed, along with a steady source of income.
#3 Vehicle:
It is an important condition that the registration of the car should be in your name. Additionally, the car must not be more than 10 years old, and should also have insurance coverage.
#4 Criteria of credit score:
It is more than necessary to have a better credit score to efficiently fulfill the criteria of getting a loan against a vehicle at a good rate of interest.
Must-have Documents for Getting Loan Against Vehicle:
#1 Submit proof of identity:
You can furnish an Aadhaar card, driving license, PAN card, or passport.
#2 Submit proof of address:
For this, you can furnish a rent agreement, utility bills, or any bank statements.
#3 Submit the proof of income:
In this regard, you can furnish your ITR (income tax return), any salary slip, or even Form 16.
#4 Documentation of your vehicle:
In this regard, you can furnish a pollution under control certificate, a certificate of vehicle registration, or an insurance certificate, which also works.
Guide to Applying Loan Against Vehicle:
It is pretty easy to apply for a loan against a vehicle, either offline or online, by taking help from lenders, such as banks or NBFCs (Non-banking financial companies). Here’s the guide to follow:
#1 Know about your eligibility:
You can easily leverage eligibility calculators available online to know if you fulfill the criteria for getting a loan against your car.
#2 Select the right lender:
You need to conduct proper research on interest rates, fees, and other important requirements provided by various lenders.
#3 Read the whole document:
It is necessary to read the complete document thoroughly and carefully before signing and applying for loan against vehicle.
#4 It is important to repay the loan amount on time:
Another tip to keep in mind before applying for a loan against a vehicle is to keep in mind that you start repaying the loan at a specified time so as to avoid any sort of bad scores or any legal penalties. Moreover, it also has a negative impact on credit scores.
Closing Thoughts:
For borrowers who are considering getting a loan against their vehicle, this could make their financial situation more flexible. Financial institutions like Mahindra Finance provide quick financing, respectful terms, and easy repayment options while allowing you to keep your vehicle. This makes it a secure and efficient opportunity for borrowing funds in 2025.
