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  • Used Car Loan Interest Rates 2019

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  • Fixed interest rates for used car loans in India begin from 10.50% and 8.90% for floating rates. The maximum tenure of loan for used vehicles may range up to 5 years. Get a used car loan at a floating and fixed interest rate. Make use of exciting offers by applying for a used car loan through Bankbazaar.com.

    Used Car Loan Interest Comparison Table

    Bank Rate of Interest Lowest EMI Per Lakh Maximum Loan Quantum
    HDFC Bank Fixed – 13.00% Rs.2,275 for a tenure of 5 years 80% of total market value
    SBI Car Loan Floating – 12.60% Rs.1,798 for a tenure of 7 years 85% of the total on-road price
    Kotak Bank Fixed – 17.00% Rs.2,485 for a tenure of 5 years 90% of the total market value
    ICICI Bank Fixed – 10.50% Rs.2,149 for a tenure of 5 years 80% of the total market value
    Union Bank of India Floating – 11.85% Rs.2,217 for a tenure of 5 years 50% of the total market value
    Punjab National Bank Floating – 11.20% Rs.2,184 for a tenure of 5 years 70% of the total market value
    Central Bank of India Floating – 9.95% Rs.2,122 for a tenure of 5 years 75% of the total market value
    Andhra Bank Fixed – 11.85% Rs.2,217 for a tenure of 5 years 60% of the total market value
    Federal Bank Fixed – 11.15% Rs.2,182 for a tenure of 5 years 75% of the depreciated value
    Bank of Maharashtra Floating – 9.40% Rs.2,095 for a tenure of 5 years 50% of the total market value
    Bank of India Floating – 8.90% Rs.3,175 for a tenure of 3 years 70% of the total market value
    Bank of Baroda Floating – 10.45% Rs.3,248 for a tenure of 3 years 80%
    Indian Bank Floating – 12.25% Rs.2,237 for a tenure of 5 years 60% of the total market value
    OBC Floating – 10.90% Rs.3,269 for a tenure of 3 years 70% of the total market value

    Rates and Charges of Used Car Loans in India

    HDFC Bank:

    • Documentation charges – Rs.630 per case
    • Foreclosure charges
      • No foreclosure is allowed within a period of 6 months from availing car loan
      • 6% of the principal outstanding amount in case of foreclosures within 1 year from the 7th installment
      • 5% of the principal outstanding in case of foreclosures within 13-24 months from the 1st installment.
      • 3% of the principal outstanding in case of foreclosures after 24 months from the 1st installment.
    • Processing fees – 0.4% of total loan amount subject to min amount of Rs.3,000 and max of Rs.10,000

    Kotak Bank:

    • Processing fees – 0.00% of total loan amount
    • Prepayment charges – 5.21% after a period of 6 months
    • Cheque dishonor charges – Rs.750 per cheque
    • Contract cancellation charges – Rs.2,000
    • Late payment charges – 0.03

    Andhra Bank:

    • Processing fees – 1% of total loan amount with min amount of Rs.1,000 and maximum amount of Rs.25,000 including GST.

    ICICI Bank:

    • Documentation charges – Rs.550 including GST
    • Prepayment charges – 5% on total principal outstanding or the outstanding interest for unexpired period of loan (whichever element is lower)
    • Part prepayment charges:
      • 6% + GST subject to the below-mentioned conditions:
        • The min prepayment amount should be equal to one installment amount
        • The maximum prepayment amount should be equal to 25% of the total principal outstanding
        • Borrower will be allowed to make the prepayment only two times during the tenure of the loan with a gap of 12 months.
    • Bounce charges – Rs.500 per transaction
    • Prepayment statement charges – Rs.200 per statement

    Features and Benefits of Used Car Loan in India

    The following benefits and features can be enjoyed if you are availing a used car loan in India:

    • Flexibility – A used car loan applicant will have the flexibility to choose the loan tenure he/she is comfortable with. Car loan tenures typically go up to the period of 7 years.
    • Hassle-free documentation – The documentation required for used car finance is extremely simple and hassle-free. The lender/bank checks the borrower’s repaying beforehand. Thereafter, the borrower is required to submit the relevant documents to ascertain his/her steady income.
    • Tenure – The period of repayment usually differs from one lender to another. However, in most cases it ranges between 1 year and 7 years. Borrower is free to choose a tenure that he/she is comfortable with.
    • Prepayment of loan – Borrowers have the freedom to close the car finance when he/she has an abundance of funds. Certain car finance companies allow pre-closure of loan only after a certain period of time. Other lenders may be flexible.
    • Negotiable rate of interest – Unlike home loan, car loan borrowers can negotiate the interest rate with the lender. If he/she has a good credit score and a good credit history, he/she will get a lower interest rate.
    • Streamlined processing – Most lenders have a smooth procedure with respect to car financing. They have a centralised system in process that enables quick loan approval.

    Factors Affecting Used Car Loan Interest Rates in India:

    The following factors significantly affect the interest rates of used car loans in India:

    • Credit history – Credit history plays an integral role in determining the interest rates for used car finance. It is always advisable to have a credit score of 750 and above to receive a lower interest rate.
    • Level of income – A lower debt-to-income ratio is typically considered appropriate while availing car loan in India. This means that the lender will not falter in his EMI payments and won’t delay the same since he/she has a steady source of income with less debts.
    • Loan tenure – Longer the loan tenure, lower will be the rate of interest. You should opt for a tenure that is best suitable to your financial condition.

    FAQs

    1. Can a used car loan EMI be altered (reduced)?
    2. No, the EMI is fixed for the entire loan tenure.

    3. What are the lending rates for used car finance in India?
    4. The lending rates offered by lenders in India are dependent on a wide range of factors such as customer credentials, tenor, asset, geography, and discounts that are currently ongoing in the market.

    5. Does crzedit report have an impact on one’s used car finance quantum?
    6. Yes. Credit reports shed light on the applicants’ financial status and their ability to pay back a loan.

    7. What is the collateral/security required in a used car finance?
    8. Hypothecation of the used car being financed will be the only security required.

    9. Who can be a co-applicant for a used car loan?
    10. The applicant’s spouse or any other close relative residing in the same house can be co-applicants to the loan.

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