Unexpected financial challenges can arise, demanding quick solutions. If you suddenly require funds and are seeking financial assistance at a competitive interest rate, a loan against your car can be a practical solution. This financial option enables you to access funds by using the value of your car.
The loan amount that you receive from such loans is directly related to the value of your car. It is essential to understand how your used car’s valuation impacts the amount you receive, before applying for a loan against it.
Here are four factors that determine your used car valuation and thus the amount you can borrow as a loan against car
- Age of your car: The age of your car is a significant factor that determines your used car valuation. It is safe to assume that newer cars that may have undergone less wear and tear are likely to help you with a higher loan eligibility. Conversely, older cars may not be valued as much due to higher depreciation and may reduce the loan amount you are eligible for. Therefore, maintaining your car in good condition is advisable to secure a better valuation.
- Mileage of your car: Mileage is a clear indicator of your car's usage. Lenders pay close attention to the mileage when assessing used car valuation. A lower mileage may suggest less wear and tear, contributing positively to the car's valuation. On the flip side, having higher mileage can result in a lower valuation, which in turn has a negative impact on the amount of the loan you may receive.
- Overall condition and service history: The condition of your car plays a vital role in deciding what it is worth. Lenders want to be sure that your car has good market value. Keeping a detailed record of regular services and repairs can boost your used car valuation. However, if your car has been neglected or lacks proper maintenance, it might be valued lower.
A clean service history report can significantly enhance your car's valuation, which increases your chances of receiving a larger loan amount.
Loan against cars is an easy and quick way to obtain cash for your quick financial needs. However, it is important to conduct thorough research and choose a lender that offers competitive interest rates and favourable loan terms that suit your financial needs.
With Bajaj Finserv Loan Against Car, you can get up to 115% of your car’s value, with a limit of up to Rs. 77 lakh.
Click here to learn about the additional features of our loan against cars.
