Get A Car To Get A Loan

The banks in India are trying new and innovative ways to provide loans to customers. They have now decided to provide loans against cars. Vehicles will be treated as collateral against the loans people wish to acquire.

This system of loan against cars in India has begun with Axis Bank. They are the third largest private bank in India and are trying to find ways to attract customers to acquire loans. They are facing tough competition from banks like HDFC, ICICI and Kotak Mahindra.

Jairam Shridharan, head of consumer lending and payments at Axis Bank told a source, "We are entering the used car finance business and refinance of cars will be a product we will offer to bank customers. This loan product would be offered to those customers who have taken an auto loan from the bank and repaid it."

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He further added, "The intent is to retain the customer and offer the individual a top-up loan. The risk associated is minimal as we have already done KYC check on these customers. We also have the individual's credit history with us."

Getting a loan against a car is common practice abroad. Every year banks abroad account for INR 650 crore to INR 1,000 crore loans against cars. Individuals can use this money for any personal or emergency needs.

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So now Indians too can avail of this offer by Axis Bank. All you need is a car and the bank officials will evaluate the vehicle, after which owners will be informed the loan amount that will be granted to them. This system works better as it cheaper than getting a personal loan.

The interest rates currently on personal loans is very high. Banks also offer loans by mortgaging gold or personal property. The Bank will offer approximately 70 to 90 percent of the cars' current value. The loan against cars by Axis Bank will be a good way for individuals to get a personal loan.

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