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Benefits of Choosing Loan Against Car for Urgent Expenses
In summary
A loan against car can help when you need funds but still want to retain your vehicle.
- Bajaj Finance Loan Against Car offers loan amounts from Rs. 1 lakh to Rs. 2.50 crore
- Funding can reach up to 100% of the car’s assessed value, subject to eligibility and valuation
- Repayment tenure ranges from 12 months to 84 months, with interest rates from 10% to 18.25% p.a.
Last updated: September 2026
Before borrowing, consider how much you actually need, the EMI you can manage, and the total cost over the repayment tenure. You can also check your eligibility for loan against car and find out how much you can borrow.
What is a loan against car?
A loan against car is a secured loan where an eligible car you own is used as security for borrowing.
The lender assesses the car and your financial profile before deciding the sanctioned amount and applicable loan terms. Unlike selling the vehicle, a loan against car allows you to retain and continue using the car while the loan remains active, subject to the applicable terms.
When can a loan against car help with urgent expenses?
A loan against car can help when you need a sizeable amount but do not want to sell your vehicle or use a large part of your savings.
You may consider it for:
- Medical expenses
- Higher education costs
- Urgent home repairs
- Wedding-related expenses
- Family financial requirements
- Other large personal expenses
The borrowing decision should still depend on repayment capacity. An urgent expense may need immediate funding, but the repayment can continue for several months or years after the expense itself is over.
Pro tip: Borrow according to the amount you actually need. A larger loan gives you more funds now, but it also increases your EMI and total interest.
What are the main benefits of a loan against car?
A loan against car allows you to unlock part of the financial value of a vehicle you already own.
- You can retain and use your car: You do not need to sell the vehicle to raise funds. This can be useful if you depend on it for work, family travel, or everyday commuting. However, the car remains security for the loan until the applicable repayment obligations are completed.
- You can borrow against the car’s assessed value: Bajaj Finance offers funding of up to 100% of the assessed value of an eligible car. The final sanctioned amount depends on vehicle valuation as well as your overall eligibility.
- You can spread repayment over time: Bajaj Finance Loan Against Car offers repayment tenure from 12 months to 84 months. This allows you to select a repayment period according to your monthly finances and borrowing requirement.
- You can retain part of your savings: Using the car as security can reduce the amount you need to fund entirely from savings. This can help you keep money available for emergencies or other financial commitments.
Pro tip: Keeping more savings available can help during an emergency, but borrowing adds interest and applicable charges. Compare both before deciding how much to finance.
How much can you borrow against your car?
Bajaj Finance Loan Against Car offers loan amounts from Rs. 1 lakh to Rs. 2.50 crore. Funding can reach up to 100% of the assessed value of the car, subject to eligibility and vehicle valuation.
The assessed value is not necessarily the same as the car’s original purchase price or expected resale price.
The final amount can depend on:
- Assessed vehicle value
- Vehicle age and condition
- Income
- Existing financial obligations
- Repayment capacity
- Credit profile
- Applicable verification
For example, if your car is assessed at Rs. 8 lakh, this does not automatically mean Rs. 8 lakh will be sanctioned.
The vehicle value provides the basis for funding, while your financial profile influences the final approval.
Pro tip: A higher eligible amount does not mean you need to borrow the maximum. Borrowing only what you need can reduce both EMI and total interest.
What will a loan against car cost you?
Bajaj Finance Loan Against Car interest rates range from 10% to 18.25% p.a. as on September, 2026.
Your applicable rate can depend on factors such as:
- Credit profile
- Income
- Repayment capacity
- Loan amount
- Tenure
- Vehicle details
Interest is only one part of the borrowing cost.
Other applicable charges can include:
- Processing fees
- Documentation charges
- Penal charges for delayed payments
- Part-prepayment or foreclosure charges, where applicable
- Other applicable fees
Review the Loan Against Car interest rate and charges before accepting an offer.
Your sanction documents and loan agreement contain the costs and conditions applicable to your loan.
How should you choose the tenure and EMI?
Choose a repayment tenure that keeps the monthly EMI manageable without extending the loan unnecessarily. A longer tenure lowers the EMI but generally increases total interest.
A shorter tenure raises the EMI but reduces the total period over which interest is charged.
Consider Aditya, a 36-year-old salaried applicant in Mumbai earning Rs. 92,000 per month with a Credit Information Bureau (India) Limited (CIBIL) Score of 775.
He needs Rs. 5 lakh for an urgent family expense. Assume an illustrative interest rate of 12.50% p.a.
EMI = [P × R × (1 + R)ᴺ] ÷ [(1 + R)ᴺ − 1]
Where:
- P = Principal loan amount
- R = Monthly interest rate, calculated as annual interest rate ÷ 12 ÷ 100
- N = Number of monthly instalments
You can also add:
Total interest = (EMI × N) − Principal loan amount
For the Aditya example:
- P = Rs. 5,00,000
- R = 12.50 ÷ 12 ÷ 100
N = 36, 48, or 60 months, depending on the tenure being compared
| Tenure | Estimated EMI | Estimated total repayment | Estimated total interest |
| 36 months | Rs. 16,727 | Rs. 6,02,165 | Rs. 1,02,165 |
| 48 months | Rs. 13,290 | Rs. 6,37,920 | Rs. 1,37,920 |
| 60 months | Rs. 11,249 | Rs. 6,74,938 | Rs. 1,74,938 |
These are illustrative figures. The calculation excludes processing fees, documentation charges, stamp duty, and other applicable costs.
Aditya can reduce his monthly repayment by choosing a longer tenure, but his total interest increases.
Pro tip: A longer tenure can ease monthly cash flow but compare the extra interest before choosing it only for a lower EMI.
Who is eligible for a loan against car?
Bajaj Finance assesses your age, income, employment profile, credit history, repayment capacity, and other applicable factors.
| Criteria | Requirement |
| Nationality | Indian |
| Age | 21 to 80 years* |
| CIBIL Score | 650 or higher |
| Salaried applicants | Minimum salary of Rs. 20,000 per month and at least 1 year of work experience |
| Self-employed applicants | ITR for the previous 2 years |
*You should be 80 years old or younger at the end of the loan tenure.
A Credit Information Bureau (India) Limited (CIBIL) Score is a three-digit score that reflects your credit history and past repayment behaviour.
Meeting the listed criteria allows you to apply but does not guarantee approval. Bajaj Finance can also assess existing EMIs, income stability, repayment capacity, supporting documents, and the vehicle offered as security.
What documents do you need?
Bajaj Finance requires applicant and vehicle documents to complete verification.
Applicant documents may include
- Know Your Customer (KYC) documents
- Permanent Account Number (PAN) card
- Employee ID card, where applicable
- Salary slips for 3 months
- Bank account statements for 3 months
- Income Tax Return (ITR) documents for self-employed applicants
Vehicle documents may include
- Registration Certificate (RC)
The exact document requirement can vary according to your applicant profile and verification needs.
What should you check before borrowing?
Before borrowing for an urgent expense, check whether the loan remains manageable after the immediate need is met.
Ask yourself:
- How much money do I actually need?
- What EMI can I manage each month?
- How much do I already pay towards existing loans?
- What will the total interest cost be?
- What fees and charges apply?
- How much emergency savings will remain?
- Can I continue repayments if household expenses increase?
- Is another source of funds available at a lower overall cost?
Do not assess the loan only by the amount available.
For example, using some savings can reduce your borrowing requirement. However, using all your emergency savings to avoid a loan can leave you without a financial buffer.
Pro tip: The smallest possible loan is not always the right answer if it leaves you with no emergency savings. Balance your borrowing requirement with the cash reserve you need to retain.
How do you apply for a loan against car?
Once you have checked the amount required, repayment cost, eligibility, and vehicle conditions, you can start the application.
- Click on the 'CHECK LOAN OFFER' button on the loan against car product page to open the application form.
- Enter your 10-digit mobile number and submit the OTP for verification.
- Fill in your asset details such as the loan active on your car, make, model, variant, and more.
- Fill in the application form with your personal information, such as your name, mobile number, email ID, pin code, residence type and type of employment.
- Submit your loan against car application.
Our representative will call and guide you on the next steps. The loan amount will be transferred to your bank account once your documents are successfully verified.
Please note that approval, sanctioned amount, and disbursal remain subject to applicant eligibility, vehicle valuation, document verification, and applicable checks.
You can check for eligibility for a Bajaj Finance Loan Against Car and find out how much you can borrow.
What do our customers say about us
Amit Chauhan
Reviewed on 04 Mar 2025
Smooth and transparent used car loan process. The interest rates were competitive, and the documentation was minimal. The team guided me clearly at every step, making my used car purchase simple and stress-free. Highly recommended for quick approvals.
Ashwin Kamble
Reviewed on 24 Feb 2025
Clear guidance, quick approval, and flexible repayment options made buying my used car easier than expected. The team handled everything professionally. Very satisfied and would definitely recommend their used car loan.
Rohit Sharma
Reviewed on 12 Apr 2025
I had a great experience while applying for my used car loan. The process was quick, and the interest rate helped me manage the purchase better. Customer service was helpful throughout. Highly recommended for a smooth used car financing experience.
Ajay Kulkarni
Reviewed on 08 Dec 2024
My used car loan experience was simple and hassle-free. The approval was quick, the repayment options were flexible, and the team explained every step clearly. It helped me buy my preferred used car without financial stress. I would surely recommend it.
Frequently asked questions
Overview
Repayment
Can I continue using my car after taking a loan against it?
Yes. A loan against car allows you to continue using the vehicle while it serves as security for the loan, subject to the applicable terms. This can be useful if you depend on the car for work, family travel, or regular transport. You remain responsible for repaying the loan as agreed and complying with the conditions stated in your loan documents.
Is a loan against car suitable for every urgent expense?
No. Suitability depends on the amount required, available savings, existing debt, and your ability to manage another EMI. If the expense is relatively small and you have sufficient surplus savings, borrowing against your car may add unnecessary interest and charges. Compare the borrowing cost with the other funding options available to you.
Should I choose the longest tenure to reduce my EMI?
Not automatically. A longer tenure can reduce the monthly EMI, but it generally increases total interest because the loan remains outstanding for more months. A shorter tenure increases the EMI but reduces the repayment period. Choose a tenure that keeps the EMI manageable while avoiding unnecessary extension of the loan.
Should I borrow the maximum amount available against my car?
Not necessarily. The amount available depends on vehicle valuation and your financial profile, but your actual requirement should determine how much you borrow. A larger loan increases the principal, EMI, and total interest. Borrow enough to meet the intended expense while keeping the repayment comfortable alongside your other financial commitments.
Disclaimer
1. Bajaj Finance Limited (“BFL”) is a Non-Banking Finance Company (NBFC) and Prepaid Payment Instrument Issuer offering financial services viz., loans, deposits, Bajaj Pay Wallet, Bajaj Pay UPI, bill payments and third-party wealth management products. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page.
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