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Whether it’s buying your dream car or upgrading to a new bike, Urban Money supports your aspirations with instant vehicle loans. With a maximum limit of ₹50 lakhs, we ensure you get the lowest vehicle loan interest rates, starting at 8% p.a.

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Vehicle Loan Features and Benefits

Vehicle loans offer numerous benefits, including attractive interest rates, document verification, tax advantages, and flexible repayment options, making it easier to own your dream car or bike.

1) Attractive Interest Rates

Vehicle loans typically come with competitive interest rates, making them an affordable option for financing your car or bike purchase. They are more economical compared to some other types of loans.

2) Verification of Vehicle Documents

Lenders assist in verifying the authenticity of vehicle documents, ensuring that the purchase is legitimate and protecting buyers from potential fraud or disputes.

3) Tax Benefits

Borrowers may be eligible for tax deductions on interest paid on vehicle loans, particularly for commercial vehicles. Consult a tax expert for more details based on your usage.

4) Flexible Repayment Period

Vehicle loans allow borrowers to choose repayment tenures ranging from 1 to 7 years. This flexibility helps manage EMIs and ensures financial convenience.

5) Balance Transfer Option

A vehicle loan balance can be transferred from one lender to another to avail of better interest rates, reduced fees, or enhanced customer service experience.

6) Asset Value Retention

Vehicles often retain some value over time, and in many cases, the appreciation in resale value for certain models can offset a part of the interest paid on the loan.

Vehicle Loan Overview

Rising automobile prices encourage many people to opt for a vehicle loan. Vehicle loans provide a set amount of money from banks or NBFCs to purchase a car, bike, or commercial vehicle. The lender holds the vehicle as collateral until the loan is repaid.

When choosing a vehicle loan, compare interest rates, fees, and repayment options to select the plan best suited for your financial needs.

Vehicle Loan Tax Benefits

The repayment of a vehicle loan typically consists of the principal and interest components. Borrowers of commercial vehicle loans can claim tax deductions on the interest paid under specific conditions.

Particulars Quantum Of Amount Deduction
Interest Paid for Commercial Vehicles Up to Rs. 1.5 Lakhs (varies based on usage and tax rules)
Principal Repayment for Commercial Vehicles Eligible for tax deductions under certain sections (consult a tax advisor)

Vehicle Loan Overview

A vehicle loan is a financial product that helps individuals purchase new or used vehicles, such as cars, motorcycles, or commercial vehicles. With a vehicle loan, you can finance up to 85-90% of the vehicle's on-road price, with the remainder paid as a down payment. These loans are typically offered by banks, financial institutions, and non-banking financial companies (NBFCs).

Features of Vehicle Loan

  • Affordable Interest Rates: Competitive rates on both new and used vehicles. Interest rates may vary based on the borrower's credit score and the type of vehicle being purchased.
  • Flexible Loan Tenure: Loan tenure can range from 12 months to 7 years, depending on your preference and ability to repay.
  • Quick Loan Processing: Swift approval process with minimal paperwork. Instant loans are available for qualified applicants.
  • Wide Range of Vehicles: Loans can be used to finance both new and pre-owned vehicles.
  • No Collateral Required: In many cases, the loan is unsecured, though the vehicle may be held as security until the loan is repaid.
  • Tax Benefits: Some lenders provide tax advantages for business owners, especially if the vehicle is used for business purposes.

Benefits of Vehicle Loan

  • Easy Financing: You don’t need to pay the full cost of the vehicle upfront; a loan makes it more affordable by spreading the payments over time.
  • Flexible EMI Options: Choose from a range of repayment options based on your income and monthly budget.
  • Hassle-Free Process: Many banks offer a seamless application process, with options for online submission and quick loan disbursal.
  • Ownership of Vehicle: Once the loan is approved, you can own the vehicle while paying it off.

Vehicle Loan Eligibility Criteria

The eligibility criteria for a vehicle loan depend on the type of borrower (salaried, self-employed, or business owner), the applicant’s financial situation, and the vehicle being purchased. Here are the common eligibility criteria:

  • Age: The applicant should be between 21 and 60 years old.
  • Income: A minimum monthly income of Rs. 20,000 is typically required.
  • Employment Status: Salaried individuals, self-employed individuals, or business owners can apply.
  • Credit Score: A good credit score (above 650) is necessary for better loan terms.
  • Employment History: Stable employment or business history is crucial for loan approval. Lenders may require at least 2-3 years of continuous employment or business operation.
  • Residence: Having a stable residential address is necessary. Lenders may ask for a proof of residence (utility bills, bank statements, etc.).

Documents Required for Vehicle Loan

To apply for a vehicle loan, the following documents will typically be required:

1. Identity Proof

  • Aadhaar Card
  • Passport
  • Voter ID
  • Driver’s License

2. Address Proof

  • Utility Bills (electricity, water, gas)
  • Bank Statement
  • Rental Agreement or Ownership Proof
  • Government-issued Documents

3. Income Proof

  • Latest Salary Slips (for salaried individuals)
  • Income Tax Returns (ITR)
  • Bank Statements (for self-employed individuals or business owners)
  • Form 16 (for salaried applicants)

4. Other Documents

  • Passport-size Photographs
  • Vehicle Details (make, model, year) if you have already decided on a vehicle.
  • Business Continuity Proof (for self-employed applicants).

Vehicle Loan Interest Rates

Vehicle loan interest rates depend on the applicant’s credit score, type of vehicle, and loan amount. Typically, the rates can range from 7% to 15% per annum. It is important to compare rates from multiple lenders to get the best deal.

Factors that influence vehicle loan interest rates:

  • Credit Score: Higher scores lead to better interest rates.
  • Loan Amount: Larger loan amounts may attract lower rates.
  • Tenure: Shorter loan tenures might come with slightly higher rates due to faster repayment.
  • Vehicle Type: New cars typically attract lower rates than used cars.

Reasons for Vehicle Loan Rejection

There are several reasons why a vehicle loan application may be rejected. Common reasons include:

  • Low Credit Score: A score below 600 could lead to rejection.
  • Insufficient Income: If your monthly income is too low to cover the loan repayment, the loan may not be approved.
  • Existing Debt: If you have existing loans or significant outstanding debts, it may affect your loan approval.
  • Inaccurate or Incomplete Documentation: Missing documents or incorrect information may result in the rejection of your loan application.
  • Employment Instability: Frequent job changes or being in a probationary period can lead to a rejection.

How to Improve Chances of Vehicle Loan Approval?

  • Improve Your Credit Score: Ensure your credit score is above 650 by clearing any outstanding debts and making timely payments.
  • Maintain a Stable Income: A stable job or business increases your chances of approval.
  • Submit Accurate Documents: Ensure all documents are up-to-date and complete.
  • Reduce Debt: Avoid applying for loans if you already have significant outstanding debts.
  • Choose a Shorter Loan Tenure: Opting for a shorter tenure reduces the risk for the lender and could improve your chances of approval.

Loan Repayment and EMI Options

  • Fixed EMIs: Your monthly repayments will remain the same throughout the loan tenure.
  • Floating EMIs: The interest rate changes as per market fluctuations, so your EMI may change during the loan tenure.
  • Prepayment and Foreclosure: Most lenders allow you to prepay or foreclose your loan without penalty after a certain period.

FAQs about Vehicle Loans

  • Can I get a loan for a second-hand vehicle? Yes, vehicle loans can be used to purchase both new and pre-owned vehicles, although the interest rate may be slightly higher for used vehicles.
  • Is it necessary to make a down payment? Yes, most lenders require a down payment of 10-20% of the vehicle’s on-road price.
  • Can I apply for a vehicle loan online? Yes, many banks and financial institutions offer online applications for vehicle loans, making the process quick and convenient.

Frequently Asked Questions

A vehicle loan is a type of financing where you borrow money from a lender to purchase a car or other vehicle, and repay it in monthly installments.

Eligibility criteria generally include age (18-60 years), a steady source of income, a good credit score, and valid identification documents.

The loan amount is based on factors like the vehicle's on-road price, your income, credit history, and the lender's terms.

Vehicle loan repayment tenures typically range from 1 to 7 years, depending on the lender and your preferences.

Tax benefits are available for commercial vehicle loans, while personal vehicle loans generally do not offer such benefits.

Yes, many lenders allow prepayment or foreclosure of vehicle loans. However, there may be associated charges.

Vehicle loan interest rates vary between lenders and typically range from 7% to 15% per annum, depending on your credit score and loan terms.

Yes, most vehicle loans require a down payment, which is usually 10-20% of the vehicle's price.

Missing an EMI can result in penalties, a higher interest rate, and a negative impact on your credit score.

Yes, you can transfer your vehicle loan to another lender with lower interest rates through a balance transfer facility.
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