Used Car Loan Eligibility Calculator
For some, a car is just convenient transport, while for others, it’s a dream. Contemplating on a pre-owned vehicle can spring from many factors. Usually, learning drivers prefer a used car to get more confidence and then go in for a new car.
For some, a pre-owned car is all they can afford. Sometimes it could also be a good buy if the seller is disposing off a good car for a cheap price.
Whatever the reason, buying a pre-owned car these days is much easier. Banks and financial institutions devised car loan schemes dedicated to customers interested in used cars. Customers can avail of loans for 40% to 100% of the car's value.
Used Car Loan – Eligibility Criteria (2025)
- Residency: Indian residents; some banks accept NRIs
- Age: 21–60 years (salaried), up to 65 years (self-employed)
- Employment: Salaried, self-employed, professionals, firms, HUFs
- Work Experience: Minimum 1–3 years in current job/business
- Income: Minimum ₹1–4 lakh annual income (varies by bank)
- Banking Relationship: Some banks prefer existing customers
- Contact Requirement: A permanent landline may be needed
Key Factors Affecting Used Car Loan Eligibility
- Age Requirements
- Minimum: 21 years
- Maximum: 60 years (salaried) or 65 years (self-employed) at loan maturity
- Vehicle Conditions
- Maximum age: Typically 5 years (some lenders accept up to 7)
- Preferred: 1st or 2nd owner vehicles
- Lower depreciation models preferred
- Financial Factors
- Minimum income: ₹1 lakh/year (varies by lender)
- Debt-to-income ratio: Should be below 50-60%
- CIBIL score: 650+ preferred (better rates for 750+)
- Banking Relationship
- Existing customers often get better terms
- Salary account holders may get preferential treatment
- Loan Terms
- Typically cover 70-90% of car value
- Shorter tenure loans (3-5 years) often have better approval rates
How Credit Scores affect Used Car Loan Eligibility?
Credit scores are recorded and maintained by the Credit Information Bureau of India Limited or CIBIL. When you take out a loan, overdraft, or a credit card, your behaviour with regards to spending, repayment, and other related patterns are tracked.
If you default on your EMIs or cannot pay it back, your negligence on overspending all affect your CIBIL score negatively. But timely repayments, paying your credit card bills in full, holding well-organised debt will increase your score.
So, when you apply for a car loan, banks will enquire into your credit score to see what kind of customer you have been in the past. A low score will translate into rejection, or stricter terms on your loan, or higher interest rates.
A high score will increase your eligibility and even put you in a better position to ask for better interest rates and terms on your loan.
How to increase Used Car Loan Eligibility?
If you find that you are not eligible for a car loan, there are ways to increase your chances.
- If you fall short on income, add your spouse or immediate family member’s as a co-applicant in the loan. You can then add their income as well and make up the minimum requirements.
- If you cross the eligible age at the end of the tenure, banks might consider you if you can show steady flow of income where they have assurance that you can repay the loan.
- Choose a used car that is in good working condition. Cars will have to undergo inspections by a bank agent, and a car that is running well will get you a car loan easily.
- You can personally enquire into your CIBIL score to find out where you stand. A nominal fee is charged for this information but you can find out why your score is not up to the mark and take measures to fix it.
- Lastly, try to clear off as much current debt as you can. This will free up your debt-to-income space and you will be eligible for a larger loan quantum.
FAQs about Used Car Loan Eligibility
- How do I find out if I’m eligible for a used car loan?
There are ways to find out your car loan eligibility. As each bank has different criteria, you can contact the bank directly and give them your information. They will tell you if you are eligible to apply. You can also enquire about your eligibility on some of the banks’ websites. Alternatively, you can use the BankBazaar.com Eligiblity Calculator, enter your information, and a list of eligible car loans will be generated for you.
- Is it possible to get a loan to buy a car that is more than 5 years old?
Yes, you can avail of a car loan which is more than 5 years old. Many banks set the maximum age of the car as 5 years, but this is not necessarily the only factor that comes into play.
- What is the maximum loan amount I can get to purchase a used car?
The maximum loan amount depends on the rules of the bank and your net annual income. Banks generally provide funding of 40% to 90% of the value of the car.
- Do I need to have a salary account with the bank to avail of a used car loan?
Banks will definitely favor customers who have a salary account with them.
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