Car Loans India — Importance of Car Loan Surrender Letter alse}
In today’s world, cars have become a part of modern lifestyle. It involves a serious amount of investment. Buyers finalize on a particular model after carefully going through different options available in the market. There is a large set of people who resort to availing a loan to help them buy a car. This process fulfils the dream of owning a stylish car with financial assistance from a bank. However, the loan process is quite tedious and complicated. The car loans in India consist of several agreements and clauses which a layman might find difficult to grasp. The prime example of such clause in a car loan is a surrender letter. Many borrowers are not familiar with the importance of the car loan surrender letter.
As per this clause, a borrower needs to fill the surrender form with accurate information related to the vehicle. In addition, a borrower can be declared as a defaulter, if he fails to repay the decided loan amount. New or used cars are movable property; a borrower can opt for illegal sale to a new party or move to a location where a bank cannot scout it. In such an unwanted situation, due to the non-availability or failing to respond to bank’s notice, a borrower is declared as a ‘defaulter’.
This is where the lender gets the surrender letter in advance from an applicant at the time of cheapest car loan approval procedure. With this, the bank safeguards its position from any sort of misconduct from an applicant in later stage. This simplifies the importance of the car loan surrender letter. Once the borrower signs this letter, the bank’s job becomes easier to take possession of the car after obtaining a court order.
This practice has been influential in keeping a check on defaulting borrowers who take benefit of car loans without an intention of paying back the dues. As a result, no one can question the importance of the car loans India surrender letter for the best interest of the banks and their operations.