When it comes to purchasing a car, the argument of personal loan vs. car loan is often a complicated factor. With separate sets of advantages and disadvantages, both these loan options are viable to get a new or even a second-hand car.
However, a proper introspection can suggest, which of the two can be the best alternative for financing a four-wheeler.
First, go through the details of a car loan:
- Albeit the funding is high, it requires pledging the borrower’s asset. Therefore, failure in repayment can result in seizure of the asset.
- Needs a lot of paperwork owing to its secured nature, which takes a reasonable amount of time for approval. Therefore, availing these secured loans delays the entire process.
Catering to these discrepancies, financial institutions offer personal loan to help you buy a car. To get a clearer idea regarding personal loan vs. car loan, know the features and benefits of the former.
Avail high financing value –
Lending institutions provide a substantial amount ranging up to Rs. 25 Lakh to buy a car. One can even buy a premium second-hand four-wheeler with a used car loan.
Enjoy limited documentation process –
When it comes to personal loan vs. car loan on the basis of documentation, personal loans comparatively requires a few papers.
- KYC documents
- Employee ID card
- Salary slips of the previous two months
- Bank account statements of one’s salary account for the last three months
There’s zero risk of vehicle seizure –
Moreover, this is a collateral free loan which eradicates the risk of vehicle seizure. So, just in case a debtor fails to repay the loan amount in time, he won’t lose the ownership of his car.
Enjoy convenient repayment period –
Keeping in relation with the point mentioned above, borrowers have a thin chance of defaulting in repayment. The reason is that a lot of lenders provide a flexible tenor that ranges from 12 to 60 months. This is a major advantage to consider when deciding on personal loan vs. car loan.
Thus, borrowers face no hurdles in managing finances with such a flexible repayment schedule.
Meet easy to qualify criteria –
Unlike car loans, Personal Loan eligibility criteria are simple. One’s age should not be less than 23 and more than 58. He or she should be an Indian citizen and have a stable income for getting the approval.
Moreover, applicants can know their eligibility criteria instantly with an online personal loan eligibility calculator.
Get a chance to improve credit history –
It’s easy to improve credit score with the timely repayment of loan amounts. This, in turn, helps a borrower to avail advances in future without any hassle.
Manage your account online –
Additionally, borrowers can keep track of all their loan details anytime by assessing their online account. They can even calculate the EMIs beforehand by using online personal loan calculator.
Flexi Loan facility –
It is a new-age facility proffered by some financial institutions for productive utilization and easy repayment of loan amount. With this facility, a borrower can withdraw and repay whenever necessary. In this process, he will pay only the interest as EMI on the utilized amount.
So, with these added advantages, buying a car is easier if you apply for a personal loan.