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What is a Vehicle Loan?
A vehicle loan is a financing solution that allows you to arrange funds for purchasing a vehicle (two or four wheeler). The lender makes a direct payment to the dealer on behalf of the buyer, and this loan amount can be repaid in equated monthly instalments (EMIs) over a specific tenure. This is a type of secured loan where the vehicle itself is used as collateral.
Types of Vehicle Loan
Muthoot Finance offers different types of vehicle loans. These include:
Car Loan: As the name suggests, a car loan can be availed to purchase a brand-new car of your preferred brand. You can avail car finance up to 80-90% (variable) of its on-road price, while the remaining amount needs to be paid as a down payment. The loan amount has to be repaid in EMIs throughout the loan tenure. Usually, a car loan comes with a repayment tenure of 7 years. However, you have the option to choose a tenure as per your convenience. Muthoot Finance gives the option to apply for a car loan online as well.
Two-Wheeler Loan: A two-wheeler loan helps you arrange the required funds for any type of two-wheeler vehicle (including geared motorcycles and non-geared scooters). Also commonly known as a bike loan, this financing option allows you to avail a loan for up to 100% (conditions applicable) of the on-road price of the vehicle. Similar to a car loan, you can apply online to avail a two-wheeler loan as well.
Used Car Loan: Also known as a second hand car loan, this car finance option helps you buy a pre-owned vehicle without having to make the complete payment at the time of purchase. You can avail a loan up to 75% (again, variable) of the final value of the car.
Here are a few salient features of Muthoot Finance’s car and bike loan:
High-value financing: LTV, or Loan to Value ratio, is the ratio of the loan amount against the market value of the car that you are going to purchase. Muthoot Finance offers the best possible LTV ratio on every type of vehicle loan so that you do not have to worry about making a hefty down payment.
Best Interest Rates: Muthoot Finance offers the most competitive interest rates on different types of vehicle loans, including new car loans, used car loans and two-wheeler loans.
Quick Loan Disbursals: We make sure that your loan amount gets disbursed in no time once your loan application gets approved. This allows you to purchase and register your vehicle without any delay.
Flexible Repayment Option: At Muthoot Finance, we offer a range of repayment options along with the flexibility to choose the loan tenure at your convenience. The tenure of repayment depends on the type of vehicle loan you are applying for. Generally, the repayment tenure of a car loan is 7 years and that of a bike loan is 2 years.
Hassle-free documentation: Gone are the days when applying for a loan used to be a complicated and time-consuming process. At Muthoot Finance, we give you the option to apply for a car or a 2-wheeler loan online and provide scanned copies of your ID, address, and other documents.
The eligibility criteria for a vehicle loan can vary depending on the type of loan you are applying for i.e. car loan, bike loan, used car loan, etc. However, in order to become eligible for availing a vehicle loan, an individual should have a stable source of income and a good credit score.
The essential documents for a vehicle/car loan that you need to keep handy while applying are: -
- Proof of Income - Form 16, salary slips, Income Tax Return documents
- Proof of Identity - Aadhar card, Driving Licence, Passport or PAN card
- Bank Statement of three to six months
- Proof of Age - Matriculation Certificate or Aadhar Card or Birth Certificate
- Proof of Address - Aadhar card or Driving Licence or Ration Card (Family Card) or Passport or Voter ID
Why Choose Muthoot Finance?
Muthoot Finance is India’s leading and most trusted financing solutions provider. We understand the specific needs of our customers and offer easy car loans to both salaried and self-employed individuals. You can explore our extensive range of different types of vehicle loans available at competitive interest rates. We also offer a number of schemes for car and bike loans that you can choose from as per your requirements. Here, you can enjoy a variety of other benefits, such as quick loan disbursal, minimum documentation, and flexible repayment options.
Quick loan processing
Attractive interest rates
Pocket-friendly EMIs to suit your needs
Pay your installments
services we provide
To get an instant vehicle loan, you can visit our website. We value our customers and hence offer quick loan processing and pocket-friendly EMIs to suit their needs. We have attractive interest rates and minimal documentation. A person can avail of the loan without any hassle and complex procedures. In case of any questions, you can get in touch with us or visit our nearest branch between 9:30 AM to 6 PM from Monday to Saturday.
The finance of a vehicle depends on various factors like a person’s annual income, previous credit score history and overall eligibility. We offer up to 95% loan cover on a used car and up to 100% for a commercial-use vehicle. Moreover, Muthoot Finance offers the most affordable auto loan interest rates based on your needs.
The maximum tenure of a vehicle/car loan is seven years five years for the car loan and 2 years for two wheeler loan. According to your budget and requirements, you can opt for lower EMIs for loan repayment so that it doesn't become a reason for your stress or a burden on your shoulders. Muthoot Finance has made everything really simple, right from applying for a vehicle loan and following the application to keeping track of the repayment status.
The essential documents for a vehicle/car loan that you need to keep handy while applying are: -
● Proof of Income - Form 16, salary slips, Income Tax Return documents
● Proof of Identity - Aadhar card, Driving Licence, Passport or PAN card
● Bank Statement of three to six months
● Proof of Age - Matriculation Certificate or Aadhar Card or Birth Certificate
● Proof of Address - Aadhar card or Driving Licence or Ration Card(Family Card) or Passport or Voter ID
Depending on the borrower's profile, different lenders have different eligibility, qualification and minimum salary requirements to apply for a vehicle/car loan online. Muthoot Money Limited (MML), a 100% wholly-owned subsidiary of The Muthoot Group, offers fast processing and minimum paperwork on vehicle loans.
You only need a co-borrower or a loan guarantor if you can't fulfil the lender's requirements to qualify for a car loan. The main aspects considered are credit score, age, and monthly income. If all the requirements are duly satisfied by your side, then you can go ahead and apply for a car loan.
However, you can also bring a co-borrower with whom you can divide the EMIs according to your understanding and pay off the debt quickly and easily.
There are quite a few reasons that can lead to the rejection of your vehicle/car loan. Read the details below to know more.
Bad Credit/CIBIL score - One of the leading causes of rejection is keeping a poor credit or CIBIL score. Lenders operate on the fundamental tenet that a borrower has a lesser risk of defaulting on their EMIs when they have a higher CIBIL score. In other words, they learn about your creditworthiness via your CIBIL score.
Therefore, your chances of getting a vehicle loan decrease if your CIBIL score is below 600. You can qualify for a car loan with a credit score between 600 and 750, but the interest rate will be somewhat higher. However, a credit score over 750 is regarded as good and a borrower with such a score is likely to be approved for a vehicle loan with a favourable interest rate.
Therefore, verify your credit score before applying for a vehicle loan.
Unstable income - Every lender evaluates your capacity to repay a loan by looking at your monthly income and length of work. Lenders will reject a borrower's application in scenarios where the loan amount exceeds the borrower's ability to repay it.
Incomplete documentation – Despite the flexibility afforded by lenders, the required documents must be in place to increase the chances of your loan being approved. Hence, make sure you have such documents readily available.
Muthoot Finance has made it simple and fast to get an instant vehicle loan using the ‘Muthoot Online’ application. Use the EMI calculator and avail loan account monitoring with features like individualised services, quick pay, minimal paperwork requirement, rapid processing, an extensive network of branches, competitive auto loan interest rates, and much more for your convenience. Create an account by registering yourself on the website or app, whichever you prefer.
If you are a self-employed person or business owner and utilise the vehicle for work-related activities, then yes, a car loan can assist you in saving on taxes. The interest you pay can be deducted from your taxes as a business cost if you are self-employed and borrowed money to buy a car for your company.
However, unlike with a home loan, a salaried person cannot claim tax deductions on car loan interest repayments. The reason behind it is that a car is considered a luxury good.
However, customers can surely get the most affordable car loan interest rates at Muthoot Finance.
Yes, the option to prepay your car finance loan is available at Muthoot Finance. Prepayment or foreclosure simply refers to paying off debt before the conclusion of the period. It's a good idea to pay off the debt when things improve financially or if money comes in suddenly.
Prepayment often entails a pre-defined penalty that must be paid in lieu of the unpaid interest; however, the penalty is typically not very high and is easily manageable.
You cannot sell the vehicle until the remaining loan balance is paid in full. That’s because a No Objection Certificate (NOC) is required from the bank. After the car finance is paid in full, the applicant will receive the NOC and two copies of Form 35. Thereafter, you can simply move on with the procedure of selling the vehicle by removing the hypothecation from the registration certificate (RC) with the help of this NOC.