If you really think about it, it's easier getting a loan for a car than a loan for bus fare!
  • Car Loan BYTES FROM OUR KITCHEN

    How to Arrange a Loan for a Second-Hand Car?

    Most lenders in India - banks and Non-Banking Financial Companies (NBFCs) provide used car loans for the purchase of used/second-hand/pre-owned cars. The age and model of the second-hand car that you choose plays a major role in obtaining auto financing for the purchase of the said car. Before approving a used car loan application, lenders consider the age of the car and whether the model has been discontinued. The sum of the age of the car and the loan tenure of a used car loan must not exceed more than 8-10 years. The older the car, the harder it is to obtain sufficient funding to purchase the car. Opt for a newer car model and one that is not more than 2-3 years old.

    Benefits of Purchasing a Used/Second-Hand Car

    Most consumers hesitate to opt for a second-hand car when they dream of owning a brand new car. However, there are various benefits to purchasing a used car such as:

    • Nowadays, there are several organised used-car dealers who ensure second-hand cars are damage-free, well-maintained, and certified.
    • It is better for new drivers to practise driving in a used car rather than putting a dent in a brand new car. After perfecting the art of driving, you can opt for a new car and drive it with confidence.
    • The depreciation rate of a car is highest in the first 2 years of buying it. Fortunately, the owner of a second-hand car doesn't have to worry about the depreciation costs of the car.
    • No sales tax is levied on a used car.
    • There is no waiting period for the delivery of a used car.
    • The sum of money that you save up to buy a brand new car with moderate features can be used to buy a high-end second-hand car with advanced features.
    • The down payment on a used car is lower than a new car.
    • The price of a used car is lower than a new car.
    • By opting for a used car loan, you don’t have to break your long-term savings scheme like an FD in order to purchase a car of your choice.

    If the second-hand car is to be bought from a private seller, it is advisable to do some research such as whether the car is stolen or is there an unpaid debt on the car, and the lack of proper maintenance of the car.

    Second-Hand Car Loans in India

    Once you have narrowed down the make and model of car you wish to purchase, look for used car loan offers across the top lenders in the country. Visit a reliable third-party website to compare various used car loan offers and choose one with the lowest interest rate, zero processing fee, a suitable loan tenure, and flexible repayment options. After choosing a reputable lender who promises minimal paperwork and instant loan disbursal, check the car loan eligibility criteria set by the bank or NBFC.

    Second-Hand Car Loan Eligibility

    Any salaried or self-employed individual aged between 21 to 65 years with a steady income, a good credit score, and a stable occupation can apply for a used car loan. The loan amount, interest rate and loan tenure of a used car loan differ from lender to lender. As the resale value of a second-hand car is low, lenders offer used car loans at a higher interest rate compared to new car loans. You can always negotiate with the lender for a better interest rate. Furthermore, the insurance cost of a used car is higher than a new car as a result of a high maintenance cost and the scarcity of car spare parts.

    How to Apply for a Second-Hand Car Loan?

    Banks offer up to 80-85% of the total value of the used car for a loan tenure of 1 to 5 years provided the total age of the car and the loan tenure doesn't exceed more than 8-10 years. When you approach a bank for a used car loan, the bank will appoint an expert for the valuation of your car. The bank will offer you 80-85% of the total value of the car as assessed by the valuation expert. You will have to make the down payment and pay the differentiation amount out of your own pocket.

    Visit the bank website, download the car loan application form, fill it up and submit it along with the necessary documents like identity proof (Aadhaar Card and Passport), age proof (PAN Card and Driving License), income proof (Form 16, last 6 months’ bank statement and payslips), and address proof (utility bills and ration card). The bank will verify the details furnished by you and process the car loan application. Upon car loan approval, the loan amount will be disbursed to your bank account in a short period of time. You can also visit the nearest bank branch to apply for a used car loan.

    Second-Hand/Used Car Loan EMI

    Like a new car loan, a second-hand car loan is also repaid through Equated Monthly Installments over a specified loan tenure. To find out how much your used car loan will cost you monthly, you can use the free online car loan EMI calculator, available on the bank website or a third-party comparison portal. The tool is easy and simple to use.

    All you have to do is enter the car loan amount, loan tenure, interest rate, and processing fee into the tool. Click on ‘calculate’ and get instant and accurate results in the form of an amortisation table, a bar graph, and a pie chart. The amortisation table represents the periodic loan repayment schedule of your car loan. It consists of interest payments, EMIs and the outstanding due after each EMI payment.

    Top Banks offering Second-Hand Car Loans

    Here is a list of the top banks and NBFCs providing second-hand car loans in India:

    Bank Loan amount Loan tenure Rate of Interest
    State Bank of India Up to 2.5 times your net annual income 1 to 5 years, provided the age of the car is not more than 5 years 12.60% p.a.
    HDFC Bank Up to 100% value of the used car 1 to 7 years, provided the total age of the car and the loan tenure doesn’t exceed more than 8-10 years 11.50-17.50% p.a.
    ICICI Bank Up to 80% of the price of the car 24 to 35 months 10-17.65% p.a.
    TVS Credit Services Up to 85% of the price of the car 1 to 5 years 13.1-15% p.a.
    Sundaram Finance Up to 85% of the purchase price of the car 1 to 3 years, provided the age of the car by loan maturity does not exceed more than 8-10 years 12-14% p.a.

    Before applying for a second-hand car loan, check your car loan eligibility so as to avoid a loan rejection that can have a negative effect on your credit score.

    Customer Reviews

    • Central Bank of India Car Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      It was a good experience i had with this loan and the loan amount which they had provided has been sufficient. The interest rate with them is quite nominal when compared with the market rate. There has not been any sort of additional charges which they had made so far.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jan 13, 2019
    • SBI Car Loan
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I took my car loan in State Bank of India by last year. The charges are normal. I have spend down payment nearly 1L out of 7L. The branch is near to my residence so will never contact the customer service. The process was immediate and it was completed within 2 days.
      Was this review helpful? 1
      , hyderabad
      Reviewed on Jan 12, 2019
    • HDFC Bank Car Loan
      "Its Excellent"
      0.5 4.5/5 "Excellent!"
      HDFC gave me the door step service for the car loan. I took the loan before three years. It was the fantastic experience for me because I got the better interest, I took the loan for 5 years but I done the foreclose in three years , there was no charges for it.
      Was this review helpful? 1
      , ahmedabad
      Reviewed on Jan 11, 2019
    • Capital First Car Loan
      "Good service"
      0.5 3.0/5 "Satisfactory"
      The process in getting my Car loan from them has been quite good and the process went smooth. The loan amount was sufficient but the interest rate with them has been quite high when compared with the market rate. Their customer support and their response has been good and has been helpful as well.
      Was this review helpful? 1
      , bangalore
      Reviewed on Jan 10, 2019
    • HDFC Bank Car Loan
      "Very Good Service"
      0.5 4.0/5 "Great!"
      My car loan experience with HDFC has been good and the loan amount which they had provided has been sufficient. The interest rate with them has been nominal and there has been some charges like processing fee. Overall their has been a help from their customer support as well.
      Was this review helpful? 1
      , pune
      Reviewed on Jan 09, 2019
    • HDFC Bank Car Loan
      "Average Loan Service"
      0.5 3.0/5 "Satisfactory"
      I have approached the bank directly for my car loan. Since I'm existing customer of HDFC for 13 years, i have chosen them. I purchased the loan amount of Rs. 2 lakhs. They have offered me a interest rate of 16% In October 2018, i have closed this loan. Total tenure period of the loan was 3 years. Car Dealer has recommended me about this loan.
      Was this review helpful? 4
      , srikakulam
      Reviewed on Jan 09, 2019
    • Magma Car Loan
      "Average service"
      0.5 1.5/5 "Bad"
      I have been using my car loan with Magma Fincorp previously, they have given me sufficient loan amount ,the rate of interest they have charged me was high,and the processing fee they have charged me was high , i was not happy with there service.
      Was this review helpful? 2
      , ghaziabad
      Reviewed on Jan 08, 2019
    • HDFC Bank Car Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have been using my car loan with HDFC bank, there service is too good, the loan amount they have given me was sufficient,the rate of interest they have given me up to 9% which is nominal for me,and the processing fee they have charged me was nominal only they have charged me up to 1% only,and still my loan is running ,there was no hidden charges they have charged apart from that,overall service is good.
      Was this review helpful? 1
      , ghaziabad
      Reviewed on Jan 08, 2019
    • HDFC Bank Car Loan
      "Nice offer and nice loan"
      0.5 4.0/5 "Great!"
      I had a car loan with HDFC 1 year back. They have given me a nice offer hence i opted the loan with HDFC. I'm not sure about the partial payment and pre-closure facility. They have given me a nice interest rate according to what i want. I was taken a loan amount of Rs. 3 lakhs.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jan 08, 2019
    • review Car Loan
      "Need to reduce the charges"
      0.5 3.5/5 "Pretty good"
      I have taken a car loan in Nissan Institution, it was good. I bought the car from same showroom and they have provided me a facility. The rate of interest was high. The documentation procedure was simple. I have taken the loan almost 2 years back and its still running. The loan tenure is 5 years.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jan 08, 2019
    • HDFC Bank Car Loan
      "Looking for less interest rate"
      0.5 4.0/5 "Great!"
      My car loan experience was good with HDFC bank, loan amount was sufficient and the rate of interest was high when compared to other banks. Customer service was good and they responded on time. The tenure period for this car loan is for 5 years.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jan 08, 2019
    • ICICI Bank Car Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been holding my car loan with ICICI bank, the rate of interest they have charged me was nominal and they have charged me processing fee they have charged me which was nominal, the loan amount they have given me was sufficient according to the car price i got my loan, still this loan is running,overall service is good.
      Was this review helpful? 2
      , new delhi
      Reviewed on Jan 08, 2019
    • IOB Car Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been holding my car loan with Indian overseas bank, the loan amount they have given me was sufficient, they have charged nominal rate of interest they have charged me up to 9 % which was nominal and there is zero processing fee , so far there service is have experience was good, they have not taken any hidden charges ,there overall service is good.
      Was this review helpful? 1
      , mumbai
      Reviewed on Jan 08, 2019
    • HDFC Bank Car Loan
      "Good loan experience with HDFC"
      0.5 4.0/5 "Great!"
      My car loan running with HDFC bank, the customer service is super and the fast approval on the disbursement. They taken 15 days to deliver the car. The principal amount is Rs. 4 lakhs for the tenure of 5 years, the car model is baleno which is latest.
      Was this review helpful? 1
      , aligarh
      Reviewed on Jan 07, 2019
    • ICICI Bank Car Loan
      "Very Good Service"
      0.5 4.0/5 "Great!"
      The process in getting this loan was quite good and there hasn't been any hassle faced. The loan amount which they had provided has been sufficient and the interest rate with them has been nominal as well. There has not been any sort of additional charges which was made by them.
      Was this review helpful? 0
      , pune
      Reviewed on Jan 07, 2019
    • Axis Bank Car Loan
      "Good Car Loan"
      0.5 4.0/5 "Great!"
      Purchased my car loan 4 years back. I have chosen the Axis bank because the rate of interest was less when i compared with others. I have taken a loan amount of Rs. 3.50 lakhs and the tenure period for the loan is 5 years. I have been paying the EMI of Rs. 8000. I have got the loan as per they have promised time.
      Was this review helpful? 2
      , bangalore
      Reviewed on Jan 07, 2019
    • Bank of Baroda Car Loan
      "Good service"
      0.5 4.0/5 "Great!"
      It has been a good experience i had with this loan. The loan amount which they had provided has been sufficient and the interest rate with them has also been nominal, there has not been any sort of additional charges which they had made for this loan.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jan 07, 2019
    • HDFC Bank Car Loan
      "Average Loan Experience"
      0.5 3.0/5 "Satisfactory"
      I have taken my car loan in 2015 with HDFC. I have purchased the loan amount of Rs. 5 lakhs approximately. I have done a pre-closure. I have completed the loan in 2.5 years There is no pre-closure charges. They have given me a interest rate of 8% and the EMI amount has been deducted from my account automatically.
      Was this review helpful? 1
      , mumbai
      Reviewed on Jan 07, 2019
    • HDFC Bank Car Loan
      "Interest rates are high"
      0.5 3.0/5 "Satisfactory"
      My car loan was purchased from HDFC Bank in 3 months before. I have purchased a loan amount of Rs. 5.21 lakhs and i have received the loan within a month. They have given me a offer for taking the car loan and there is a lesser documentation for this loan since i have taken loan already with them. I am making the EMI of Rs. 12500
      Was this review helpful? 0
      , mumbai
      Reviewed on Jan 07, 2019
    • HDFC Bank Car Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been holding my car loan with HDFC bank for long time , the loan amount they have charged me was sufficient, the rate of interest they have charged me was nominal, and the processing fee they have not charged me it was zero processing fee,overall service was good.
      Was this review helpful? 2
      , bangalore
      Reviewed on Jan 06, 2019
    Common Loader Icon

    Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

    reTH65gcmBgCJ7k
    This Page is BLOCKED as it is using Iframes.