Buying a car is one of the biggest financial decisions you’ll make, and for many, the question is simple: should you apply for an auto loan or take a loan against vehicle?
Both are effective options, depending on your needs. While one helps you buy your dream car, the other lets you use your existing car to raise funds without selling it.
In today’s digital age, online car loans have made the process faster, easier, and more transparent. Platforms like Car Par Loan have simplified how people in India access affordable car financing, whether it’s a loan for new car, a vehicle loan, or a loan on car you already own.
Understanding Auto Loans
An auto loan is a secured loan offered by banks or financial institutions to help you purchase a vehicle. The car itself acts as collateral until the loan is repaid.
4 Key Features of Auto Loans
- Ownership from Day One – You can drive your car immediately while paying in EMIs.
- Flexible Tenure – Choose repayment periods between 1–7 years.
- Competitive Interest Rates – Rates for car loan in India start as low as 7.9% (as per Car Par Loan).
- Instant Digital Approvals – With online car loans, approvals often happen within 24–48 hours.
Benefits of Auto Loans
- Predictable EMIs make budgeting easier.
- Lower rates than unsecured personal loans.
- Tailored offers for salaried and self-employed applicants.
Understanding Loan Against Vehicle
A loan against vehicle lets you use your existing car to get funds while keeping ownership. It’s ideal when you need liquidity for business, education, or emergencies, without selling your car.
Key Features of Loan Against Vehicle
- Borrow up to 140% of your car’s current market value (available at Car Par Loan).
- Continue driving your vehicle during the repayment period.
- Quick disbursal, money is often credited within days.
- Lower interest compared to personal Loans.
Why It Makes Sense
If your car is already paid off or nearly so, this option can help you raise funds easily without disrupting your routine.
Auto Loan vs Loan Against Vehicle: Which One Should You Choose?
1. Purpose
- Auto Loan (Loan for New Car): To buy a new or used car
- Loan Against Vehicle: To get funds using your existing car
2. Ownership
- Auto Loan: New ownership begins after purchase
- Loan Against Vehicle: Retain ownership of your current car
3. Interest Rate
- Auto Loan: Starts at 7.9%
- Loan Against Vehicle: Starts at 11.99%
4. Loan Amount
- Auto Loan: Based on vehicle cost
- Loan Against Vehicle: Up to 140% of vehicle value
5. Tenure
- Auto Loan: 1–7 years
- Loan Against Vehicle: 1–5 years
6. Processing Time
- Auto Loan: 24–48 hours (online)
- Loan Against Vehicle: 24–72 hours (online)
If you’re planning to buy a new vehicle, go for an Auto Loan. If you already own one and need quick funds, a loan against vehicle gives you the flexibility you need.
How to Apply for Car Loan Online
Here’s how you can apply for car loan through Car Par Loan:
- Visit the Website – Go to Car Par Loan and choose the type of loan you want.
- Check Your Eligibility – Fill in your details to know your loan amount and terms.
- Upload Documents – Submit your ID, address, and income proofs online.
- Quick Approval – Get instant pre-approval within 24–48 hours.
- Funds Disbursed – The approved amount is transferred to your account directly.
Simple, paperless, and secure, this process is designed for convenience.
Documents You’ll Need
To ensure fast approval, keep these documents ready:
- Identity Proof – Aadhaar, PAN, or Passport
- Address Proof – Electricity bill, Voter ID, or Driving License
- Income Proof – Salary slips, bank statements, or ITR
- Car Documents – RC book, insurance papers, or invoice copy
- Photographs – Passport-sized photo
Current Interest Rates at Car Par Loan
1. New Car Loan
- Interest Rate (Approx.): 7.9%
- Loan Limit: Based on car cost
2. Used Car Loan
- Interest Rate (Approx.): 11.99%
- Loan Limit: Up to 90% of value
3. Loan Against Vehicle
- Interest Rate (Approx.): 11.99%
- Loan Limit: Up to 140% of value
4. Existing Car Loan
- Interest Rate (Approx.): 15%
- Loan Limit: Based on balance amount
(Rates as per Car Par Loan, 2025)
Why Choose Car Par Loan
- Paperless Experience – 100% digital process.
- Faster Approvals – Pre-approved loans within 48 hours.
- Transparent Charges – No hidden fees.
- Flexible Repayments – Easy EMIs and multiple tenure options.
With years of experience and trusted partnerships, Car Par Loan is one of India’s most reliable car financing platforms.
The Final Note
Whether you’re buying a new car or using your existing one to raise funds, auto loans and loan against car are reliable financial tools. Platforms like Car Par Loan make it simple to apply for car loan online, offering flexible terms, fast approvals, and low-interest options for every need.
Don’t let budget limitations hold you back. With Car Par Loan, your next car or your next big goal is just a few clicks away. Visit Car Par Loan and take the first step today.
To understand the complete process of applying for car loans online & Eligibility Criteria read this detailed guide: Your Guide to Online Car Loans – Loan Against Car Eligibility Criteria, Documents, and Process
FAQs
Q1. What’s the difference between an auto loan and a loan against vehicle?
A: An auto loan helps you buy a new car, while a loan against vehicle lets you borrow against your existing one.
Q2. What’s the minimum interest rate for car loans in India?
A: New car loans start at 7.9%, and loans against vehicles start at 11.99%.
Q3. How long does it take to get loan approval online?
A: Most applicants receive pre-approval within 24–48 hours.
Q4. Can I apply for car loan if my credit score is low?
A: Yes, though interest rates may vary. Improving your score helps you get better offers.
Q5. Is my car safe if I take a loan against it?
A: Yes. You retain ownership and continue to drive your car while repaying the loan.