A car loan for a new or a used car
A car loan is secured against the car itself, which is hypothecated to the lender until the loan is repaid. Our lending partners decide how much of the price they will fund and on what terms. We help you get the paperwork together and put the enquiry in.
Secured against the car, which is hypothecated to the lender.
We introduce, the lender decides
TommyAndFurry Insurance does not lend money. We introduce you to lending partners who handle the kind of loan you are asking about. The loan agreement is between you and the lender you choose, and the lender alone decides whether to approve your application and on what terms.
Loans are offered by our lending partners and are subject to their eligibility criteria, terms and approval. [LENDING PARTNER DISCLOSURE]
No one can promise you a loan, a rate or a date before a lender has assessed your application. We will not tell you that you are approved, and we will not quote a rate a lender has not offered you.
What a car loan is
A car loan funds part of the cost of a car and is repaid in monthly EMIs. The lender's interest is recorded as a hypothecation on the registration certificate, and it is removed once the loan is closed and the lender issues its no-objection certificate.
Lenders fund a share of the on-road price of a new car, or of their own valuation of a used one, and you pay the rest as a down payment. The share, the rate ([INTEREST RATE]) and the tenure ([MAX TENURE]) are set by the lender.
The car is the lender's security and stays hypothecated to it until the loan is repaid. That also limits what you can do with the car: selling or transferring it needs the lender's consent.
Who it usually suits
Buying a new car
You have the down payment and want to spread the rest over a tenure whose EMI sits comfortably alongside running costs, insurance and servicing.
Buying a used car
Lenders treat used cars differently: the age and the model affect what they will fund and for how long, and they value the car themselves.
Keeping your savings intact
Financing part of the price leaves your savings where they are. Weigh that against the interest you will pay over the tenure.
When it isn't the right tool: Not a good idea if the EMI only works by stretching the tenure to its limit, or if it leaves nothing for insurance, fuel and servicing. A car costs more than its EMI.
What lenders typically look at
General points, not any lender's criteria. Each of our lending partners applies its own credit policy and can weigh these differently.
Income and how steady it is
Your income and how long you have earned it. Lenders consider income from [MIN INCOME] upwards under their own policies.
The EMIs you already pay
Existing instalments and card dues are weighed against your income before a new EMI is added to them.
Your repayment record
How you have repaid past loans and cards, assessed by the lender under its own scoring.
The car itself
For a new car, the lender works from the on-road price and funds a share of it. For a used one, it values the car and takes its age and model into account.
The tenure you ask for
A longer tenure lowers the EMI, but you pay more interest on a vehicle that is losing value. Lenders cap the tenure at [MAX TENURE].
Terms we cannot confirm yet
These are the numbers people ask about first, and we will not guess at them. Each one is set by the lender for each application, and will appear here once our lending partners have confirmed it.
- Loan amount
- [LOAN AMOUNT RANGE]Within its own range, the lender decides what it will sanction.
- Interest rate
- [INTEREST RATE]Quoted by the lender for your application. We cannot quote it for them.
- Maximum tenure
- [MAX TENURE]A longer tenure lowers the EMI and raises the total interest paid.
- Processing fee and charges
- [PROCESSING FEE]Charged by the lender. Every charge should be listed in its sanction letter.
- Income considered from
- [MIN INCOME]Each lender sets its own cut-off under its own credit policy.
- Lending partners
- [LENDING PARTNERS]Published here once each partner agreement is in place.
Documents usually needed
A general list, not a lender's list. Each lending partner publishes its own requirements and can ask for more.
Identity and address
- PAN card
- Aadhaar or another address proof the lender accepts
- Recent passport-size photograph
Income, if you are salaried
- Recent salary slips
- Bank statements showing your salary credits
- Form 16 or your income-tax return
Income, if you are self-employed
- Income-tax returns with the computation of income
- Financial statements for the period the lender asks for
- Current-account bank statements
- GST returns, if you are registered
The car
- Quotation or proforma invoice from the dealer, for a new car
- For a used car: the registration certificate, the seller's details and a valuation
- A copy of the motor insurance policy, once the car is insured
- Driving licence, if the lender asks for it
How to apply
Fix your budget
Decide the down payment you can make, then use the EMI calculator on the balance so you know the monthly cost before you visit a showroom.
Send us an enquiry
Tell us the car, whether it is new or used, and the amount you want to finance. An advisor calls you back.
Get the papers in
We tell you which of our lending partners handle car loans, and what each of them wants alongside the dealer's quotation or the used car's papers.
The lender decides and pays the dealer
If it approves, the lender issues its sanction and normally pays the dealer or the seller directly, and its hypothecation is recorded on the RC. Read the sanction letter before you sign.
Do the sums first
- EMI calculatorPut in an amount, a rate and a tenure and see the monthly EMI, the total interest and the total you would repay.
- Home-loan eligibilityA rough indication of what your income and existing EMIs could support, before you speak to any lender.
Both calculators work on the numbers you type in and give you an estimate. They are not an offer, and the lender's own assessment is what decides your loan.
Car loan questions
What is hypothecation, and when does it go?
Hypothecation is the lender's interest in the car, recorded on the registration certificate. Once you have repaid the loan, the lender issues a no-objection certificate and you get the hypothecation removed at the RTO. Keep that certificate safe.
Do I need car insurance?
Yes. Third-party motor insurance is compulsory by law for any vehicle used on a public road, and a lender will require the car to stay insured while its loan is outstanding. You can buy or compare that cover through us.
Will a lender fund the whole on-road price?
No. Lenders fund a share of the price or of their valuation and expect you to pay the rest as a down payment. The share is set by each lender's policy and can differ between a new and a used car.
Can I finance a used car?
Several lenders do, and they assess the car as well as you: its age, its model and their own valuation all matter, and the tenure they will allow is usually shorter. The amount available is [LOAN AMOUNT RANGE].
Can I sell the car before the loan is repaid?
Not on your own. While the loan runs the car is hypothecated to the lender, so a sale or transfer needs the lender's consent and usually means clearing the outstanding amount first.