Everyone at one point in life dreams of buying a car, but sadly, not everyone can. Even though the prices for cars have decreased over the years, they are still expensive. Therefore, availing a car loan is sometimes the only option left to buy a car. The best place to avail a car loan is from a bank, but with the rise of online lenders, there is some confusion among people whether they should go for a car loan or personal loan. So, what exactly is the difference between a car loan and personal loans? Let’s find out.

Car Loan Vs. Personal Loan

One of the biggest difference between a car loan and a personal loan is that the amount availed through car loan can only be used to purchase a car. On the other hand, if you avail a personal loan, it can be used based on your need. The other biggest difference between car loan and personal loan is that the car loan interest rate is lower compared to interest rate of personal loans. So, based on the two points mentioned above, you may believe that car loans are the best option. Well, not exactly. The reason why car loans may not always be the best option is because of the following reasons:

  • Car loan interest rate may be lower but the amount availed depends on lender
  • You can only use the amount to buy a car
  • Depending on the lender, you can use the loan to buy a used car
  • Depending on the lender, you cannot use the loan amount to buy design accessories
  • Car loan approval takes more time
  • Car loan tax exemption only on commercial vehicles

Car Loan at PaySense

The personal loan offered by PaySense can be used by you to purchase a car. Moreover, you can also use it purchase a used car and even make repairs to the used car. Additionally, you do not have to worry about the time it will take for the approval of the loan as PaySense offers instant loan. The car loan interest rate will be slightly higher compared to one offered by banks. But, the interest rate depends on a variety of factors that include your credit score among other factors. So, if you have a good credit score, there is a good chance that you will get a decent interest rate.