Car is a secured loan. If you take a pre-owned or used car loan, you will get cheaper interest than other loans. Lenders provide used car loans of 70% to 80% of current market value. So, the borrower needs to pay the rest of the amount.
Public and Private sector banks offer 11% to 15.50% interest rates on used car loans. Check out the latest used car loan interest rates.
Top Banks Used Car Loan Interest Rate
| Banks | Interest Rate |
| Tata Capital | 14.99% p.a. onwards |
| Indostar Capital Finance | 10.00% to 14.60% |
| Bank of Baroda | 11.90% to 14.65% |
| Bank of Maharashtra | 12.45% to 15.30% |
| Punjab National Bank | 9.95% to 10.75% |
| State Bank of India | 11.25% to 14.75% |
| Axis Bank | 13.45% to 17% |
| HDFC Bank | 13.75% onwards |
| ICICI Bank | 11.25% to 18% |
| IDFC First Bank | 13.49% onwards |
| Karur Vysya Bank | 11% to 15.50% |
| South Indian Bank | 11.65% to 17.60% |
| Tamilnad Mercantile Bank | 11.85% onwards |
| Dhanlaxmi Bank | 12% to 15.40% |
| Union Bank of India | 12.90% to 13% |
| Jammu & Kashmir Bank | 12.85% to 13.85% |
| Mahindra Finance | 9.20% to 11.25% |
Features of Used Car Loan
Taking a pre-owned car loan is a good idea to save some money. Salaried or Self-employed customers are qualified to apply for pre-owned car loans.
- Used car loan repayment terms are flexible for borrowers.
- Get an LTV (Loan-to-Value) ratio of 70% to 80% of the current market price.
- Enjoy a lower insurance charge rate compared to the new car loan.
- The paperwork process is affordable for borrowers.
- Some lenders charge NIL foreclose charges.
- Application is easy through the online journey.
- Minimal documents are required for loan approval.
Also Read: Top 5 Credit Line Loan
Eligibility for Pre-owned Car Loan
Check used car loan eligibility details before going through the loan process:
- Income Details: Salaried / Self-employed
- Age to eligible: 21 to 60 years
- Minimum Salary of Rs. 18,000 need
- Credit Score: 710+ or above
- DPD/ Loan Defaulter customers are not eligible
Documents to Apply for Used Car Loan
Salaried Person
- Pan Card
- Aadhaar Card
- Update Salary slip
- 6 months bank statement
- Form 16 (if required)
- Seller RC book copy
- Seller & Buyer Sale Agreement copy
- Seller Car insurance copy
- Hypothecation clearance letter copy
- Other documents if need
Self Employed
- Pan Card
- Aadhaar Card
- 2 years Trade License
- 2 years Income Tax File
- Recent 6 months’ bank statement
- Seller RC book copy
- Seller & Buyer Sale Agreement copy
- Seller Car insurance copy
- Hypothecation clearance letter copy
- Other required documents
Also Read: How to use ATM Card to withdraw Money
Used Car Loan Charges
| Processing Fee | Up to 3% (Depend Lender to Lender) |
| Penal Interest Charge | 2% of overdue loan amount + GST |
| Cheque Bounce | Rs. 250 to Rs. 500 + Tax |
| Duplicate NOC Charge | Rs. 300 + Tax |
| Documents Charge | Rs. 500 + Tax |
Apply for a Used Car Loan Online
1. Select the lender and land on the official website.
2. Online fill out the application form for a used car loan.
3. Provide borrower details KYC, phone number & Email ID.
4. If you are relevant, the bank will directly call you for the loan process.
FAQs
-
What is the interest rate offered by ICICI Bank for a used car loan?
The ICICI Bank offered an attractive interest rate of 11.25% to 18% annually.
-
Does Indostar Capital Finance provide a used car loan?
Indostar Capital Finance offered used car loans with minimal documents at 10.00% to 14.60% p.a.
-
What is the processing fee for a used car loan?
The used car loan process fee may change from bank to bank. However approximate processing fees of up to 3% are applicable. Additional GST charges will be included.
-
What is the used car loan interest rate of the State Bank of India?
State Bank of India provides lower used car loan interest at 11.25% to 14.75% p.a.
-
Can I apply for a used car loan online?
Now, lenders are provided with used car loans through online applications. The borrower should fill in the correct information and the bank will contact him/her directly.