Check your eligibility
What These Loans Fund
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Loan against the lender's assessed...
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Funding typically 60 to 80 per cen...
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Any lawful end use
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Tenure aligned to the remaining us...
Who Can Consider This Loan?
- Indian resident, generally aged 21 to 65 at loan maturity
- Salaried applicants: stable employment, commonly at least one year of total experience
- Self-employed applicants: business vintage, typically two to three years, with filed returns
- Minimum income threshold that varies by lender, city and vehicle segment
- Credit score materially affects both approval and the rate offered
- Existing EMIs are counted — total obligations usually cannot exceed 50 to 55% of income
What May Not Be Funded?
- Vehicles with an existing hypothecation not yet cleared
- Vehicles older than the lender's age cap
- Amounts above the funding percentage of the assessed value
- Processing and valuation charges, which come out of disbursal
- Commercial vehicles, on retail refinancing products
Always check the sanction letter before you commit.
Why Choose Wealth & Covers?
- Expert advice to choose the right plan
- Plans from leading loans companies
- Hassle-free process and documentation
- End-to-end support, including claim assistance
- Dedicated relationship manager
- Expert Guidance Personalised advice from experienced loans professionals.
- End-to-End Support From choosing the right plan to claim assistance, we are with you always.
- Claims Assistance Hassle-free claim support to ensure you get what you deserve.
- Transparent Process Clear information, easy documentation and a hassle-free experience.
Overview
Car refinancing lets you raise a loan against a vehicle you already own outright. The lender values the car, funds a percentage of that value, and takes a hypothecation charge until the loan is repaid. The money is yours to use for any purpose.
Its usefulness is specific. It is cheaper than an unsecured personal loan because it is secured, and it is faster than most other secured borrowing because the asset is easy to value and already in your possession.
Its limitation is equally specific. You are converting an unencumbered asset into an encumbered one, on a depreciating vehicle, usually for a short-term need. That can be entirely sensible — for a genuine cash-flow gap or a business requirement — and it can also be an expensive way to fund something that should not be funded at all.
Who should consider it
Owners with an unencumbered vehicle facing a genuine short-term funding need. Self-employed borrowers with irregular cash flow who prefer secured borrowing to a personal loan.
It is not the right answer for consolidating debt caused by structural overspending, and it is a poor substitute for an emergency fund.
Benefits
- Cheaper than an unsecured personal loan for the same amount
- Funds released without selling the vehicle
- You continue using the car throughout the loan
- Disbursal is fast — the asset is already in your possession
- No end-use restriction on how the money is spent
- Available to self-employed borrowers with variable income
What the loan funds, and what it does not
Read the right-hand column first. It is the one that decides how much you have to arrange yourself.
Usually funded
- Loan against the lender's assessed value of the vehicle
- Funding typically 60 to 80 per cent of that value
- Any lawful end use
- Tenure aligned to the remaining useful life of the vehicle
Usually not funded
- Vehicles with an existing hypothecation not yet cleared
- Vehicles older than the lender's age cap
- Amounts above the funding percentage of the assessed value
- Processing and valuation charges, which come out of disbursal
- Commercial vehicles, on retail refinancing products
Funding limits and the treatment of add-ons vary between lenders and move with the borrower profile. The sanction letter you receive is what governs — we will walk you through it before you sign.
How it works with us
- 1 Check eligibility before anyone pulls your credit file We assess income, existing EMIs and profile against lender criteria first, so applications only go where they will actually qualify.
- 2 Compare on total cost, not headline rate Rate, processing fee, tenure and prepayment terms together. A lower rate with a heavy fee is often the costlier loan.
- 3 Documentation prepared once One set of documents, used across lenders, rather than assembling a fresh file for each application.
- 4 Sanction and disbursal The sanction letter states rate, tenure and charges. Funds go directly to the dealer or seller against the invoice.
- 5 Delivery, and the paperwork after it Hypothecation is noted on the RC. We flag the closure formalities so removing it later is not a scramble.
Important considerations
The things a brochure tends to leave out. Read these before you decide.
- You are encumbering a depreciating asset. As the car loses value the security thins, which is why lenders keep tenures short here.
- Compare against a loan against securities or a home loan top-up. Both are usually cheaper if you have the underlying assets available.
- Be honest about the purpose. Refinancing to bridge a genuine gap is sensible; refinancing to service other debt usually postpones a problem rather than solving it.
- Comprehensive insurance becomes mandatory again for the loan term, which is a cost worth including in your comparison.
- Have the hypothecation removed promptly on closure. A charge left on the RC complicates any later sale.
Documents required
- Identity proof — Aadhaar, PAN, passport or driving licence
- Address proof
- Salaried: last three months of salary slips and Form 16
- Self-employed: last two to three years of income tax returns with computation
- Bank statements for the last six months
- Proforma invoice or booking confirmation from the dealer
- Passport-size photographs
- Existing loan statements, where you are servicing other EMIs
Frequently Asked Questions
Can I keep driving the car?
Yes. The lender takes a hypothecation charge on the registration certificate but the vehicle stays with you and in your use throughout the loan. Nothing about your daily use changes.
How much can I raise?
Typically sixty to eighty per cent of the lender's assessed value of the vehicle. That percentage is lower than on a purchase loan because there is no fresh purchase transaction anchoring the value.
Is it cheaper than a personal loan?
Usually yes, because it is secured. It is more expensive than a home loan top-up or a loan against securities, so if you hold those assets it is worth comparing before committing the car.
Can I use the money for anything?
There is generally no end-use restriction. That flexibility is a genuine advantage, and it is also worth being honest with yourself about — secured borrowing against a depreciating asset for a non-essential purpose is an expensive habit.
What if I want to sell the car during the loan?
You would need to clear the loan and have the hypothecation removed before transferring ownership. Plan the tenure with that in mind if a sale is likely within a few years.
Want a shortlist instead of a catalogue?
Tell us the situation and an advisor comes back with two or three options that actually fit — and names what each one gives up.