Personal Loan or Car Refinance Loan

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

  • Personal loan is an unsecured loan.
  • Higher rate of interest when compared to car refinance loans.
  • Loan amount on the basis of your monthly income.
  • Relatively higher processing charges.
  • Less paper work, thus quick loan processing.

 Car Refinance

  • Car refinancing is a secured loan. Basically here you get the loan on the strength of your own car.
  • Lower rate of interest when compared to personal loans.
  • Loan amount up to 60-80 per cent of the actual car value.
  • Relatively lower processing charges.
  • More extensive paper work.

 

 

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