Paisabazaar Joins Hands with HDFC Bank, Tata Capital to Launch Loan Against Car

Paisabazaar has introduced a new loan product, Loan Against Car, on its platform. The offering allows users to borrow money by using their existing vehicles as collateral. To enable this, the company has partnered with lenders including HDFC Bank and Tata Capital. 

This adds to its portfolio of secured loans, which already includes products like home loans and loans against property.

Loan Amount and Terms

The loan allows up to 200% of the car’s current market value. Borrowers can choose repayment tenures of up to 5 years. The process is fully digital, from application to disbursal. The vehicle remains with the borrower throughout the term, though a lien is placed on it by the lending institution until the loan is repaid.

This loan is targeted at individuals who own a car and are looking to unlock liquidity without selling their vehicle. It can be used for personal or business expenses. Since the loan is secured against the car, interest rates are generally lower than those on unsecured loans.

How It Works

A loan against a car is different from a car loan. While a car loan is taken to buy a new vehicle, this product is based on a car that the borrower already owns. The ownership of the vehicle remains unchanged, but the lender registers a lien on it. Once the loan is paid off, the lien is removed.

Lender Network and Platform Scale

Paisabazaar has over 65 partnerships with banks, NBFCs, and fintechs. The platform reportedly receives over 20 lakh loan enquiries every month. The new product will be available through its existing digital interface.

Santosh Agarwal, CEO of Paisabazaar, said, “Launching new categories like Loan Against Car is a natural step towards scaling and expanding our secured portfolio.”

Conclusion

The Loan Against Car product adds a new option for borrowers looking for secured credit using their current assets. With tie-ups across major financial institutions, Paisabazaar is offering this as part of its wider secured loan offerings.

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