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Personal Loan or Car Refinance Loan

Car refinance is a viable option then personal loan if you require money and own a car

Apnaloan.com Research Bureau

22 Nov 2007

The car refinance loan is essentially a secured loan like a home mortgage loan. However, the process is much simpler and much faster. The car refinance loans allow you to take a loan on your existing car, by pledging the car registration papers at the lender's.

There is a difference between the traditional car loan and a car refinance loan - The former is used to purchase of a car while the latter is used to solve your money requirement by pledging a car you already own.

Just like a personal loan, there is no restriction on the end-use of a car refinance loan.

Interest rates on car-refinance loans are relatively lower compared to personal loans, although paper work could be more extensive. So, if you have a requirement for money and you own a car, the car refinance loan is a viable option when compared to the personal loan.

personal loan

Car Refinance

Personal loan is an unsecured loan

Car refinancing is a secured loan. Basically here you get the loan on the strength of your own car.

Higher rate of interest when compared to car refinance loans

Lower rate of interest when compared to personal loans

Loan amount on the basis of your monthly income

Loan amount up to 60-80 per cent of the actual car value  

Relatively higher processing charges

Relatively lower processing charges

Less paper work, thus quick loan processing

More extensive paper work