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 rest amount the borrower needs to pay.
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.
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 up the correct information and the bank will contact him/her directly.