Know the differences between a Personal Loan and a Car Loan

Know the differences between a Personal Loan and a Car Loan

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Rs. 40,000 - Rs. 55 lakh

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What is the difference between a personal loan and a car loan?

Personal loan is versatile, collateral-free loans, and you can use the funds as you deem fit. On the other hand, a car loan or a used car loan is specifically for purchasing a new or second-hand car.With a Bajaj Finserv Personal Loan, you can get the funds within 24 hours* of approval. Check your offer in just 2 steps and apply online to get our loan.



Keep reading to know more about how the two loans differ.

 Car loanPersonal loan
Type of loanA secured loan, with the car serving as collateral.Unsecured loan.
Loan amountDepends on the value of the car.Top lenders like Bajaj Finance offer funds ranging from Rs. 40,000 to Rs. 55 lakh. The sanction you get depends on your eligibility and repayment abilities.
Funds usageOnly for a car purchase.No restrictions on end-use. It can be used for planned or unplanned, professional or personal expenses.
Documents requiredIn addition to KYC documents, salary slips and bank statements, you have to submit paperwork pertaining to ownership of the car.Only KYC documents, employee ID, salary slips and bank statements are needed.
Interest rateThe interest rate and loan charges depend on the lender and other factors.Reputed financial institutions like Bajaj Finserv levy affordable personal loan interest rates and have nominal loan charges.

While you can assess your unique requirements and pick an option that best suits your needs, remember that a personal loan offers incredible ease of use and flexibility without collateral.

You can fulfil basic personal loan eligibility criteria and use funds from a personal loan to purchase a car. Additionally, a large sanction means that you can use the balance for other needs or urgent expenses, should you need to.

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Key offerings: 3 loan types

  • Flexi Hybrid Term Loan
  • Flexi Term (Dropline) Loan
  • Term Loan

  • Withdraw and prepay – no extra charges
    You can withdraw from your limit and prepay as many times as you want, without extra charges.

  • Instalment pattern
    You can pay interest-only EMIs for up to 36 months, after which, the EMI will consist of both, the principal and the interest. EMI is applicable only on the withdrawn amount.

  • Flexi facility charges
    Flexi facility charges applicable based on your loan amount.

  • Withdraw and prepay – no extra charges
    You can withdraw from your limit and prepay as many times as you want, without extra charges.

  • Instalment pattern
    Fixed EMIs that cover both the principal and interest on the loan amount you withdraw.

  • Flexi facility charges
    Flexi facility charges applicable based on your loan amount.

  • Amount disbursed in one go
    The entire loan amount is disbursed at the start.

  • Instalment pattern
    Fixed EMIs that cover both the principal and interest.

  • Flexi facility charges
    No Flexi facility charges.

Personal loan interest rate and applicable charges

Type of fee

Applicable charges

Rate of interest per annum

10% to 30% p.a.

Processing fees

Up to 3.93% of the loan amount (inclusive of applicable taxes).

Flexi Facility Charge

Term Loan – Not applicable

Flexi Loans –Up To Rs 1,999 To Up To Rs 18,999/- (Inclusive Of Applicable Taxes)

Will be deducted upfront from loan amount.

Bounce charges

Rs. 700 to Rs. 1,200/- per bounce

“Bounce charges” shall mean charges for (i) dishonor of any payment instrument; or (ii) non-payment of instalment (s) on their respective due dates due to dishonor of payment mandate or non-registration of the payment mandate or any other reason.

Part-prepayment charges

Full Pre-payment:

  • Term Loan: Up to 4.72% (Inclusive of applicable taxes) on the outstanding loan amount as on the date of full pre-payment

  • Flexi Term (Dropline) Loan: Up to 4.72% (Inclusive of applicable taxes) on the outstanding loan amount, as on the date of full prepayment.

  • Flexi Hybrid Term Loan: Up to 4.72% (Inclusive of applicable taxes) on the outstanding loan amount, as on the date of full prepayment.

Part Pre-payment

  • Up to 4.72% (Inclusive of applicable taxes) of the principal amount of Loan prepaid on the date of such part Pre-Payment.

  • Not Applicable for Flexi Term (Dropline) Loan and Flexi Hybrid Term Loan.

Penal charge

Delay in payment of instalment(s) shall attract Penal Charge at the rate of up to 36% per annum per instalment from the respective due date until the date of receipt of the full instalment(s) amount.

Stamp duty (as per respective state)

Payable as per state laws and deducted upfront from loan amount.

Annual maintenance charges

Term Loan: Not applicable

Flexi Term (Dropline) Loan:

Up to 0.295% (Inclusive of applicable taxes) of the Dropline limit (as per the repayment schedule) on the date of levy of such charges.


Flexi Hybrid Term Loan:

Up to 0.472% (Inclusive Of Applicable Taxes) Of The Dropline Limit During Initial Tenure. Up to 0.295% (Inclusive Of Applicable Taxes) Of Dropline Limit During Subsequent Tenure

Credit guarantee scheme feeUp to 1.18% p.a. (pro-rated daily till 31st March) (inclusive of all applicable taxes) of the loan amount
Credit guarantee scheme renewal feeUp to 1.18% p.a. (inclusive of all applicable taxes) on the outstanding loan amount as on April 01 of the subsequent Financial Year.
*Renewal Fee to be collected only for 3 subsequent financial years.
 
**If the Remaining Tenure is less than 12 months, the CG Fee in subsequent years shall be charged prorated.

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Bajaj Finance Limited has the sole and absolute discretion, without assigning any reason to accept or reject any application. Terms and conditions apply*.
For customer support, call Personal Loan IVR: 7757 000 000