This startup will offer loans against cars as collateral
Cars24 has launched a new financing product to help car owners avail loans at 100% of the current value of the vehicle.
July 21, 2020 / 01:34 PM IST
Cars24 will now offer consumers loans against their cars, the company said on July 21, a move aimed at helping owners looking to sell their vehicles to tide over a cash crunch.
The company wanted to provide people with a loan and help them retain the asset at the same time through this new product, the Gurugram-based used cars startup said.
“We have witnessed a lot of cases where people have shown interest in selling their cars to fulfil their financial needs. Knowing that owning a car is becoming a necessity these days, we came up with an initiative so that our customers can secure funds and retain their assets at the same time,” Cars24 vice president Vandita Kaul said.
READ MORE: CARS24 introduces pre-owned two-wheeler sales on its platform
This offering will be part of the lending arm of the startup that recently received Rs 10 crore in debt funding from Vivriti Capital.
Earlier, the company offered loans to only its customers and business loans to its Cars24 dealers. This is the first time it has extended the facility to those who have not bought cars from it.
While the new facility has been launched in Delhi and its suburbs, together known as the National Capital Region, the programme will be rolled out in Hyderabad and Bengaluru in August and other metro cities by the end of the financial year 2020-21.
The company said customers would get benefits like same-day loan approval and up to 100 percent funding against the car’s current market value.
The loan amount will be decided after an inspection of the car. The company will also install an anti-theft device and offer easy foreclosure options.
Cars24 has already disbursed Rs 35 lakh in loans under the scheme and is looking to expand the portfolio, it said.
Cars24 was founded by Mehul Agarwal and Vikram Chopra, who were founders of FabFournish. The startup is backed by Sequoia Capital along with a clutch of global investors.