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.
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Personal loan
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Car Refinance
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Personal loan is an unsecured loan
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Car refinancing
is a secured loan. Basically here you get the loan on the strength of your own
car.
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Higher rate of
interest when compared to car refinance loans
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Lower rate of
interest when compared to personal loans
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Loan amount on
the basis of your monthly income
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Loan amount up
to 60-80 per cent of the actual car value
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Relatively
higher processing charges
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Relatively lower
processing charges
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Less paper work,
thus quick loan processing
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More extensive
paper work
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