Taking out a loan to buy your desired car often proves to be a favourable financial option. However, when you pay back your car loan, you might find it difficult to keep up with the high-interest rates and hefty monthly instalments. In such instances, refinancing your car loan can be the most beneficial option for you.
What is car loan refinancing?
Car loan refinancing, also known as a car loan balance transfer, involves shifting your loan from your current lender for better terms. This can be beneficial if the new loan offers lower interest rate, potentially lowering your monthly payments.
Bajaj Finance provides you with the facility to transfer your existing car loan while also gaining access to additional finances.
Steps to apply for car loan refinancing
You can apply for a Bajaj Finserv Car Loan Balance Transfer and Top-up by following these simple steps:
- Clicking on the 'APPLY' button on this page to go our product page.
- Open the online application form by clicking on ‘Apply’ and enter your mobile number to get OTP.
- Provide your asset details, complete the application form with your personal information, and then submit your application.
- Our representative will assist you with the following steps.
Eligibility and documents required for car loan refinancing
Here is the list of eligibility parameters required for car loan refinancing.
Nationality: Indian
Age: 18 to 80 years*
For salaried employees: Individuals should have at least 1 year of experience and a minimum monthly salary of Rs. 20,000
For self-employed individuals: Applicants must submit an ITR proof for the last 2 years
*You should be 80 years or younger at the end of the loan tenure.
Here is the list of documents required for car loan balance transfer.
- KYC documents: Aadhaar/ PAN card/ passport/ voter’s ID
- Employee ID card
- Bank statements for the last 3 months
- Salary slips for the last 3 months
- Vehicle registration certificate and insurance copy
Benefits of refinancing your car loan
- Competitive interest rates
One of the most compelling reasons to refinance a car loan is to secure a lower interest rate. This move helps you save money throughout the loan tenure. Even a seemingly small reduction in interest rates can lead to significant savings over time.
Bajaj Finserv Car Loan Balance Transfer and Top-up comes with affordable interest rates starting at 10% p.a. - Better loan terms
Lenders frequently allow you to make prepayments on your car loan. However, some lenders charge fees for these kinds of early payments, which might limit the borrower's flexibility. In these circumstances, a car loan balance transfer is a viable option. You can transfer your existing car loan to a lender that offers better terms, such as flexible prepayment options without penalties. - Top up loan amount
Some lenders provide the option of availing a top-up loan amount when opting for a balance transfer. This feature allows you to borrow additional funds on top of your existing loan.
Bajaj Finance not only allows you to transfer your existing car loan, but also offers a high-value top-up of up to 190% of the car's value with a limit of Rs. 52 lakh.
Additional read: A guide to transferring your car loan to different lender
Car loan refinancing interest rates and charges
Bajaj Finance provides car loan balance transfer and top-up at competitive interest rates. You can transfer your existing car loan to Bajaj Finance and benefit from competitive interest rates and flexible repayment terms.
Things to remember before refinancing your car loan
- Check your credit score
Before refinancing your vehicle loan, it's crucial to review your credit score. A higher credit score often leads to better refinancing offers and lower interest rates. If your credit score has improved since you initially took out the loan, you may be eligible for more favourable terms, ultimately saving you money in the long run. - Evaluate current loan terms
Assess the terms of your existing car loan, including the interest rate, remaining balance, and monthly payments. Understanding these details will help you determine if refinancing is a viable option. If interest rates have dropped since you obtained your initial loan or if your financial situation has improved, refinancing could lead to a more affordable loan structure. - Research multiple lenders
Take the time to research various lenders. Compare interest rates, fees, and repayment terms from different financial institutions. Be aware of any penalties for prepayment on your existing loan and ensure that the new terms align with your financial goals. Choosing the right lender can result in significant savings over the life of your car loan.
Additional Read: What Is Car Loan Top Up
