Personal loans, education loans, business loans, gold loans, car loans, home loans. You’ve definitely heard of all these different types of loans and may even have availed of them for various reasons whenever you needed funds.

But did you know that you also have another loan option - one that gives you almost instant access to cash and is remarkably easy to get. All you need to be eligible for this loan is to be a car owner. That’s it. If you haven’t already guessed, we’re talking about a loan against your car.

A loan against car is a secured loan that you can take by pledging your car as collateral. Sounds simple enough, right? But since a lot of people are still unaware of the existence of such a loan, much less what it entails, we think it’s only right to bust some of the myths that surround car.

Myth #1: I can’t take a loan against car if I’m still paying my existing car loan

Absolutely untrue. If you take a loan against car while you have an existing car loan, a portion of the loan amount will go towards the foreclosure of the current car loan and the rest will be yours to spend as you wish. This makes a loan against your car the perfect top-up car loan.

In fact, even if you don’t need extra cash but are stuck with a ‘bad’ car loan (such as one that charges you high-interest rates, large EMI amounts, comes with a balloon payment or a very long tenure), then car refinance will help you end that loan and replace it with a loan having more agreeable terms.

These terms include a loan amount up to ₹25 lakh, EMIs as low as ₹2,300 per lakh, and a comfortable loan repayment period of up to five years.

Myth #2: It’s difficult to get a loan against car

As we already mentioned, getting a loan against car is incredibly easy. The only real criteria you need to be eligible for a loan against your car is that you own a car. But that’s not all. The actual process of getting the loan is also made completely hassle-free and even includes doorstep service by our executives. Unlike other loans, you won’t even have to wait for days on end to get your loan - the loan amount is credited to your bank account within 48 hours.

As for the documentation? Unlike a business loan or personal loan, you don’t have to show tons of paperwork and proof, you only need to submit the most basic KYC details, a copy of your bank statement and your car’s original RC. Car refinance is meant to make your life easier, so why should getting the money be difficult?

Myth #3: If I take a loan against my car, I can no longer use my car

There’s a saying that goes - you can’t have your cake and eat it too. But when it comes to taking a loan against your car, you can get access to cash, end a bad car loan, and continue to use your car throughout.

Even though it is a secured loan like a gold loan, unlike a gold loan that requires you to keep the gold with the lender until the loan is repaid in full, you will not have to keep your car with your loan financier.

This is possible because of a simple process known as hypothecation (which also comes into play when you take a regular car loan). Hypothecation of your car allows you to retain the ownership and interest of your vehicle while it is pledged to the lender as collateral to secure the loan.

It makes for a true win-win situation for both the financier, who can take possession of the car only if the terms of the loan are not met, and for you as the borrower who can get funds against their car and continue to use it.

There you go! We hope this has helped clear any of the confusion you have about getting a loan against your car and demystified car refinance. If you still have questions, you can check out our FAQ section or get a more in-depth explanation about frequently asked questions here

Or, if you’d like to get straight to it and check out some amazing loan against car offers you can avail of today, just click here