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Should You Take a Personal Loan to Buy a Car or Not?

Published on Aug 9, 2019Updated on Jan 12, 2024

Should You Take a Personal Loan to Buy a Car or Not?

You’ve always dreamt of having that SUV or sedan or even a sports car. And every time you see it whizzing past you, it pinches you. Owning a car has its own benefits; you can travel to any place at your own convenience, you can load up your bags without having the hassle of lugging them around, there is a lot more flexibility while making plans, you could go for a leisurely long drive and enjoy your partner’s company.

If you’re unsure on how to finance this purchase, you would be glad to know that there are several financing options. You could always save up and make the purchase. However, using all your savings to fund this purchase may not be a prudent financial decision, particularly in the face of a financial emergency. A smarter financing option would be to avail of a loan to finance your dream car. While there are different types of loans that you could consider, a Personal Loan would be the most ideal in this situation. Detailed below are some reasons as to how you could benefit from a Personal Loan for a car purchase:

  • Accessibility - This is one of the major benefits of a Personal Loan. It is quite convenient to get a personal loan, especially if you already hold an account or have taken a loan previously. As most of the documentation is already verified, the application process is fairly short and simple. In fact, some providers offer a Personal Loan application online, you don’t even need to visit them!
  • Flexibility - Most loan amounts are derived from the underlying value of the item being purchased. For instance, the amount of a home loan is derived from the value of the home. Unlike these loans that are rather restrictive, with a Personal Loan you have the flexibility of taking a loan of the amount that is most viable for your purchase. You can avail a loan for a part or even the full value of the vehicle. Similarly, the loan tenure is also flexible in the case of a Personal Loan.
  • Interest rate - A common misnomer is that personal loans charge high rates of interest. This often deters people from availing of Personal Loans. You should know that the rate of interest charged depends on multiple factors. To get the best possible interest rates, ensure that your credit score is good and your current debts are within a reasonable range. Once you take care of these factors, you can easily avail of a Personal Loan that not only offers flexibility but also offers a great interest rate.
  • Complete ownership of your car - Generally, secured loans would require collateral and in most cases the item purchased is used as collateral. In such a situation, while the item is in your possession, the ownership documents lie with the lender. In the unlikely event that you are unable to repay the loan, the lender will claim the collateral. A Personal Loan is an unsecured loan. With a Personal Loan, you can not only easily buy your dream car but also have complete ownership of it.

Owning your dream car is no longer a distant dream, you can easily turn it into a reality by availing a Personal Loan. It is advisable to reach out to a reputed loan provider so that you get the best possible terms that are tailored to suit your needs.

* Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG India Credit. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG India Credit's policy at the time of loan application. If you wish to know more about our products and services, please contact us

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