If you're planning to take a vehicle loan, keep reading
What's the story
In India, vehicle loans are a popular option for those looking to buy a vehicle without paying the entire amount upfront. These loans allow buyers to pay the cost of a vehicle in installments over a period of time. Knowing the different types of vehicle loans can help you make an informed decision, depending on your financial situation and requirements. Here are the various types of vehicle loans available in India.
#1
New car loan options
New car loans are specifically designed for purchasing brand-new vehicles. These loans usually cover up to 90% of the car's on-road price, with repayment tenure ranging from one to five years. The interest rates on new car loans are generally lower than those on other types, owing to the lower risk involved for lenders. Borrowers must provide documents like income proof, identity proof, and vehicle quotation to avail these loans.
#2
Used car loan features
Used car loans are meant for those looking to purchase pre-owned vehicles. These loans generally cover up to 80% of the vehicle's value and have a repayment period of one to four years. The interest rates may be slightly higher than new car loans, since used cars tend to depreciate faster. Borrowers need to submit additional documents, like the previous owner's details and vehicle inspection reports.
#3
Two-wheeler loan insights
Two-wheeler loans are ideal for those looking to purchase motorcycles or scooters on finance. These loans generally cover up to 100% of the vehicle's cost, with flexible repayment tenures from six months to 3 years. The interest rates are competitive, making it an attractive option for two-wheeler enthusiasts. Basic documentation includes identity proof, address proof, income proof, and details about the selected two-wheeler model.
#4
Commercial vehicle financing options
Commercial vehicle financing is aimed at businesses looking to buy vehicles such as trucks, vans, or buses for commercial use. These loans cover a larger percentage of the vehicle's cost, usually between 70% and 90%, depending on the lender's terms and conditions. Repayment periods can extend up to seven years, providing businesses with ample time to manage cash flow effectively while expanding their fleet or operations.