A vehicle loan is a type of loan taken to purchase a car, bike, or commercial vehicle. It is also a secured loan, where the vehicle itself serves as collateral. Vehicle loans are generally offered for a shorter tenure compared to home loans.
Key Features of Vehicle Loans:
Loan Amount: Up to 90% of the on-road price of the vehicle.
Tenure: Ranges from 1 to 7 years.
Interest Rate: Slightly higher than home loans due to shorter tenure and faster depreciation.
Types: Loans for new and used vehicles, including two-wheelers and four-wheelers.
Eligibility Criteria:
Age 21–60 years.
Regular income with job stability.
Valid driving license and KYC documents.
Good credit score improves approval chances.
Advantages:
Quick loan disbursal, often within 24–48 hours.
Easy EMIs and flexible repayment plans.
Helps in purchasing a vehicle without draining savings.
Key Differences Between Housing and Vehicle Loans
Feature Housing Loan Vehicle Loan
Purpose Buy/build home Purchase vehicle
Loan Tenure Up to 30 years Up to 7 years
Loan Amount Higher (in lakhs/crores) Lower (in thousands/lakhs)
Tax Benefits Yes No (except for commercial)
Asset Appreciation Appreciates over time Depreciates over time
Conclusion
Whether you’re investing in a home or purchasing a car, both loans offer convenience, affordability, and financial flexibility. However, it's crucial to assess your repayment capacity, compare interest rates, and understand all terms before signing the dotted line. A wise borrower plans ahead, reads the fine print, and uses loans as stepping stones to financial growth.
https://www.indianbank.in/category/vehicle-loan/
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