Is It Recommended to Apply for a Car Loan Online?

Is It Recommended to Apply for a Car Loan Online?

With several new models launched in the last few weeks and more launches expected by auto companies in the coming few months, the time is right for you to consider getting a new car. Do not worry about the lack of funds in your account, as various financial institutions are offering car loans at attractive interest rates.

Well, Car Loans have been amongst the leading financial products for many years, but the archaic application process used to be the biggest roadblock that the customers used to face.

However, the lenders have woken up to this need of the customers, and are accepting applications for a Car Loan application through online channels. But is it recommended for you to get a Car Loan Online?

Let’s introspect & find out various aspects related to online application of Auto Loan in India.

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Types of Car Loans

A Car Loan is a secured loan for purchasing a car. The purchased vehicle is hypothecated by the bank to obtain the loan amount. There are various types of online car loans that you can apply for, as per your requirements, such as:

  • New Car Loans: These loans are offered for the purchase of a new car directly from the dealer of the company. The maximum repayment tenure available herein can go up to 8 years.
  • Pre-owned Car Loans: These loans are offered for the purchase of pre-owned cars that can be bought from a dealer or directly from the seller. The maximum repayment period for pre-owned car loans can go up to 5 years.
  • Loan Against Car: If you need money urgently, then you can avail of a Secured Loan against a car, which is a refinance loan. The money can be used for any financial requirements that you may have. The maximum repayment period for this type of loan is 5 years.
  • Car Loan Top Up: If you already have an active Car Loan account and need money urgently, then you can avail of a Car Loan Top-Up. The lender will offer this loan by extending the mortgage against the existing loan. The maximum repayment period available is 5 years.

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Why should you consider Online Car Loans?

There are various benefits of applying for a car loan through online channels. Let’s find out below.

  • Easy comparison: When you apply for a Car Loan through online channels, it is very easy to compare various key aspects of available Car Loan offers in the market. Various lenders, as well as online aggregators, publish information related to prevailing Car Loan Interest Rates, finance charges, documentation requirements, eligibility, and other key aspects. Instead of visiting different bank branches or car dealers, you can easily access all this information online. Moreover, the availability of online calculators allows you to understand the affordability of a loan quickly.
  • Low-interest rates: There are various offline channel partners whose cost is added by the lenders while determining the Car Loan rates when you apply offline. But this is not the case when you apply for an online auto loan. You can directly apply on the website of the lender and enjoy lower interest rates. Moreover, many lenders provide attractive discounts and offers for online car loan applications.
  • Transparency: There are lesser chances of any hidden costs being included by the lenders when you apply for a Car Loan online. As the cost of lending through online channels is lower for the lenders, they generally charge only the processing fee and no additional costs.
  • Easy applications and quicker approvals: When you apply for an Online Car Loan, the application process is pretty simple. You just need to fill a basic application form and upload scanned copies of your essential documents. There is no need to fill lengthy application forms time and again, saving you a lot of time and effort.

Moreover, lenders offer quick approvals for Car Loans when applications are received through online channels. In many cases, lenders process the applications through AI-powered software.

How to apply for a Car Loan online?

The application process for an Online Car Loan is extremely simple and straightforward, with the following steps to be followed:

  • Log-on to the website of the lender through a computer or smartphone.
  • Browse to the Car Loan section and click on “Apply for a Car Loan.”
  • Now, select the chosen options among new car loans and used car loans.
  • Start filling the application form with the necessary details. Make sure you enter details correctly.
  • Upload the scanned copies of the documents in the specified format. If required, pay the application fee through an acceptable mode of payment.
  • After you submit your application, you will receive an Application Reference Number for future communication.
  • You will be intimated by the lender regarding the status of your application.
  • If approved, visit the office of the lender and sign the necessary forms for disbursal.
  • The lender will create a new loan account, and you will be required to make the repayments as per the schedule shared by the lender.

What about offline applications?

Well, Online Car Loans might have their own set of benefits, applying for a Car Loan through offline channels has several benefits as well:

  • Personal interaction with the officers at lending institutions helps in building a rapport.
  • Better chance to explain your case and offer reasons for any questions asked by the lenders.
  • Better chances for negotiations for lower interest rates and higher loan amounts.
  • If you have an existing relationship with the lender, the car loan applications are approved in a quick time.

Though there are several advantages of offline application for a Car Loan, the hassles faced during application are a big deterrent for prospective borrowers.

Now that you have a better understanding of the various aspects of the online Car Loan application process and the various benefits on offer, consider these aspects when you have finalised your car.

Also Read: Apply for a Loan or Use up Savings? Make a Wise Choice

To apply online for Home LoanPersonal LoanCredit Card, Business Loan & LAP visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 100+ Banks and NBFCs. We have served 4 million+ happy customers since 1989.

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Category: Personal Finance