NBFC Car Loans

Quick Summary

An NBFC car loan is when you borrow some amount to purchase a car and pay it back over a period. These car loans help you become owners of your own car, without worrying about leasing or renting. The loan amount is paid with an additional interest rate, which is determined based on your financial background. Interest rates vary from individual to individual. NBFCs ensure a smooth and systematic process, catering to needs of individuals from different financial backgrounds. 

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What is an NBFC Car Loan?

Ever thought of owning your dream car, but couldn’t afford it? A Non-Banking Financial Company (NBFC) is a financial institution that provides bank-like services such as loans, advances, and investments. NBFCs like Mahindra Finance provide financial support that helps you to borrow money to purchase a car, in a situation where the individual does not have the required amount available to pay the full price up front. The loan amount can then be repaid by you over an agreed period, with relevant interest rates charged on the borrowed amount. A car loan makes it easier for people who wish to purchase a car but cannot afford it.

How does an NBFC Car Loan work? 

• In short, an NBFC car loan is when you purchase a car and pay it over a period through monthly installments.
• When you apply for a car loan, the first step is the lender assessing and understanding your current financial position, to determine their creditworthiness. 
• Based on their findings, the lending terms are established; these include factors like the price of the car, the interest rates, which are all influenced by your financial position and credit scores.
• The loan repayment process usually takes place on regular instalments (usually monthly basis). If you manage to repay the loan amount along with the interest, you become full-time owners of the car

Benefits of an NBFC car loan

1. Affordability: A car loan enables you to purchase a car of your choice, without having to pay the entire price up front. 
2. Fast Processing: The process of applying for a car loan is easy and quick. The process is as simple as filling out an online application form, consisting of all your required details. Once approved, the loan disbursement process is initiated. 
3. Ownership: Unlike leasing or renting, taking a car loan gives you full time ownership of the car upon repayment of the entire loan amount. This allows you to use the vehicle without worrying about the agreement ending. 

NBFC Loans vs Bank Loans

Types of NBFC car loans: New car loans & Used Car Loans

1. New Car Loan: These car loans enable you to be able to purchase a brand-new car. The interest rates differ based on several factors like your financial profile and terms and conditions of the bank. 
2. Used-Car Loan: These loans enable you to purchase vehicles that have already been used or owned by another individual. The prices of these cars are lower than their original market price. 

Who can apply for an NBFC Car Loan? 

To avail an NBFC Car Loan, you need to meet some basic requirements. 

• You must be of a minimum age of 21 to be eligible for applying for the loan. 
• You must ensure that you have a steady and consistent source of income, showing that you will be able to repay the loan amount.
• Valid KYC Documents like Aadhar, PAN, and Passport must be submitted for verification. 

Interest Rates and Charges

NBFCs set interest rates for individuals after assessing their eligibility. Since the interest rates cannot be common for everyone, these rates vary from individual to individual based on their financial background. The rates are established and agreed upon after the NBFC has all the information on the borrower’s background. 

Car Loan EMI calculator

One of the main queries you can have before applying for a car loan is calculating your car loan EMI. Mahindra Finance offers support tools like the “EMI calculator” on the website, which helps you input your desired loan amount, interest rate and tenure, and view an instant summary of your EMI amounts.

Application Process 

As mentioned earlier, the process of applying for an NBFC Car Loan is quite simple and hassle-free. The process consists of the following steps: 

1. Application Form: This step involves filling out basic details like Name, Age, Gender, Contact Information, Pin Code, Employment Status, Annual Income, etc. 
2. Document Upload and Verification: For this step, you are required to upload all the required documents-KYC documents (Aadhar, PAN, Passport), Proof of income-salary slips, Form 16, IT Returns, Bank statements, etc., for approval. 
3. Loan Disbursement: Once approved, the loan amount is transferred to your account.

Conclusion

An NBFC Car loan is suitable for individuals looking for both Car Loans and Used Car loans. NBFCs ensure that the customer does not face issues when it comes to the borrowing process and help them own a car without having to worry about rental agreements and leases. Let Mahindra Finance help you own your dream car.

Frequently Asked Questions (FAQs)

Q1. What is an NBFC Car Loan? 

An NBFC Car Loan is a loan given to individuals that helps them afford and purchase cars.

Q2. How does an NBFC Car Loan benefit me?

An NBFC Car loan is beneficial for individuals since it helps them buy a car without having to pay the entire amount up front.

Q3. Can get a loan for a used car in India? 

Yes, NBFCs facilitate loans for brand new cars as well as used cars. 

Q4. What makes NBFCs stand out?

NBFCs provide a level of trust and security; they provide loans to individuals based on their financial background, with relevant and affordable interest rates, and they make the process easier, quicker and structured.