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  • Used Car Loan

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  • Used cars loans make it possible for you to own a second-hand car at affordable interest rates that range between 9.5% and 17%. You can also enjoy flexible repayment tenures up to 7 years and avail funding up to 100% of the car’s valuation. Salaried individuals as well as self-employed professionals can apply for used car loans.
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    We found 15 Used Car Loan
    Bank Name
    Interest Rate Range/Lease rental range
    Processing Fee Range
    Loan Amount
    Tenure Range
    9.10% - 15.50% Fixed
    Up to ₹5,310 One time fee
    75K Min
    1-7 Years
    100% PAPERLESS APPROVAL
    What you'll love
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    Perks
    Fees & Charges
    Good to Know
    9.40% - 13.35% Fixed
    Up to ₹ 5,000 One time fee
    1L Min
    1-7 Years
    What you'll love
    Documents
    Perks
    Fees & Charges
    Good to Know
    Eligibility Criteria
    9.8K - 58.6K LEASE RENTAL RANGE/MTH
    No Processing fee
    - Flexi-Lease offer
    1-4 Years
    Car Lease
    What you'll love
    Documents
    Perks
    Think about
    Fees and Penalties
    Eligibility Criteria
    9.05% - 11.30% Fixed
    ₹3,500 - ₹5,500
    1L Min
    Up to 8 years
    What you'll love
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    Perks
    Think about
    Fees & Charges
    Good to Know
    Eligibility Criteria
    9.15% Fixed
    1,500 to ₹2,500 One time fee
    Up to 100% (ex-showroom price)
    Up to 7 years
    What you'll love
    Documents
    Perks
    Think about
    Good to Know
    Eligibility Criteria
    8.80% - 11.05% Floating
    0.50% (Max. ₹8696)
    Up to 3 times monthly income/salary
    Up to 7 years
    What you'll love
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    Perks
    Think about
    Eligibility Criteria
    9.50% Floating
    ₹500
    Up to 100 L
    Up to 7 years
    Documents
    Perks
    Think about
    Eligibility Criteria
    9.10% - 11.10% Fixed
    As applicable
    Up to 36 months salary/pension
    Up to 7 years
    What you'll love
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    Perks
    Think about
    Eligibility Criteria
    9.00% - 9.65% Floating
    0.25% (₹1,000 - ₹5,000)
    Up to 90% of cars value
    Up to 7 years
    What you'll love
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    Perks
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    Eligibility Criteria
    8.95% Floating
    ₹500 to ₹20 L
    75L Max
    Up to 7 years
    What you'll love
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    Perks
    Think about
    Eligibility Criteria
    9.65% Fixed
    0.23% (Max. ₹10,236) One time fee
    Up to 200 L
    Up to 7 years
    What you'll love
    Documents
    Perks
    Think about
    Eligibility Criteria
    9.00% - 9.70% Floating
    ₹1,000 - ₹1,500 (+ GST)
    Up to 48 times monthly income
    Up to 7 years
    What you'll love
    Documents
    Perks
    Think about
    Eligibility Criteria

    Top Lenders Offering Pre-Owned Car Loans

    Name of the Bank Interest Rate (p.a.) Processing Fees Maximum Loan Amount Repayment Period
    ICICI Bank 14.25% 2% of the loan amount Up to 80% of the valuation of the car Up to 5 years
    State Bank of India 11% to 12.00% Rs.1,000 to Rs.1,500 Up to 80% - 85% of the on-road price of the car Up to 7 years
    Axis Bank 14.80% to 16.80% 1% of the loan amount or Rs.6,000 Up to 85% for the car’s valuation Up to 5 years
    Tata Capital 12.5% onwards - Up to Rs.50 lakh Up to 5 years
    Bajaj FinServ - Up to 4% of the loan amount (inclusive of taxes) Up to Rs.20 lakh Up to 5 years
    HDFC Bank 13.75% to 16% Rs.2,500 to Rs.5,000 Up to 100% funding Up to 7 years
    Mahindra Finance - - Depends on the age of the vehicle Up to 5 years
    United Bank of India 9.80% Rs.600 to Rs.11,800 Up to Rs.40 lakh Up to 5 years
    Indiabulls Dhani 11.99% onwards Up to 5% of the loan amount Up to Rs.15 lakh Up to 3 years
    Used car loan
    Used Car Loan

    Used Car Loans – Features and Benefits

    With the used car segment in India poised to become the world’s third largest market by the year 2021, the demand for pre-owned car loans is also expected to grow. Hence, many car financing companies, banks, and lending institutions are now offering used car loans that boast of the below-mentioned features and benefits:

    • Used car loans have made owning luxury cars affordable since pre-owned cars are much cheaper when compared to their new counterparts.
    • The interest rates on pre-owned car finance are competitive as compared to new car loans and range between 9.80% and 17.00%.
    • Flexible repayment tenures ranging from 1 year to 5 years are available.
    • Most pre-owned car loans are instantly approved.
    • Finance of up to 90% of the valuation of the car can be availed for purchasing second-hand cars.
    • The application process is simple and easy.
    • EMIs for used car loans can be paid online, through cheques, Electronic Clearing Service (ECS), etc.

    Eligibility Criteria for availing Used Car Loans

    To avail pre-owned car finance, you must fulfill the below-given car loan eligibility criteria:

    Particulars Salaried Applicants Businessmen/Self-employed Applicants
    Age of the Applicant Between 21 years and 60 years Between 25 years and 60 years
    Minimum Income Rs.15,000 per month Net profit of Rs.1.5 lakh p.a.
    Income Status At least 1 year of continuous employment Should have been in the same line of business for at least 3 years
    Age of the Vehicle Less than 10 years at the time of loan maturity

    Please note that the eligibility criteria may vary from lender to lender and hence, it is a good idea to check for the same with the respective lenders.

    Documents Required to avail Pre-Owned Car Finance

    Applicants of used car loans need to furnish the below-given documents:

    Application Form Filled and duly signed
    Proof of Identity Aadhar Card, Passport, Driving License, Voter’s ID, PAN Card, etc.
    Address Proof Passport, Ration Card, Driving License, Aadhar Card, Electricity Bill, LIC Policy, Voter’s ID, etc.
    Proof of Income Salary slip, Form 16, Audit sheet, Profit and Loss account, etc.
    Photograph Passport size
    Car Valuation Report

    How to Apply for Used Car Loan

    Lending institutions across the country offer online and offline methods to apply for a pre-owned car loans. Here is a brief description of both the processes.

    Easy steps to apply for a Used Car Loan Online

    1. Visit the official website of the lending institution you plan to get your loan from.
    2. Apply for the loan by entering the details requested. Usually, lenders ask for your basic contact details as well as details about the car you wish to buy.
    3. Once you apply, a customer car executive will get back to you with further instructions.
    4. Submit the documents requested for a hassle-free process.
    5. The lender will verify your documents and approve the loan, after which you can use the funds disbursed to buy the car.

    Easy steps to apply for a Used Car Loan Offline

    1. Visit the branch office of the bank or lender from which you plan to take the used car loan from.
    2. Fill in the application form by providing details about the loan you wish to get.
    3. Discuss details about the loan such as the eligibility, loan amount, car loan interest rate, etc. with a bank executive.
    4. Once you decide the details of the loan, you can submit the necessary documents requested by the lender.
    5. The loan amount will be credited to your account after the bank provides its approval.

    Tips to Make the Loan Application Process Easy

    • Do a thorough research online to find a lender that offers attractive interest rates and an easy application process. Many banks these days need minimal or no documentation for approval.
    • Choose the online application process to save time on visiting the bank branch and waiting in the queue.
    • Use a Car Loan EMI calculator to estimate the EMI amount you will have to pay. This will help you decide if you have to reduce the loan amount, increase the loan tenure, or make any other changes to make the EMI affordable. The online EMI calculator makes it easy for you to calculate, without the help of a bank executive.
    • Keep your documents ready when you have to make submissions. Any delay in submission of even one important document will lead to further delay.
    • Pick a well-established lender so that the application and approval processes are quick.

    Important things to do when buying a used car

    Some of the important things that you must complete when buying a new car are mentioned below:

    • Check the car and papers thoroughly: It is vital that you check the car thoroughly. You can take the help of a mechanic to inspect the car. In case there are any issues, you can negotiate on the price or ask the owner to repair the car before purchase. You can also drive the car at a place where there is less traffic to check for any vibrations as well.
    • It is vital that all relevant documents such as the registration certificate and insurance copy are checked thoroughly. Check if the chassis number and engine number is the same as the ones mentioned on the registration copy. It is also important to check the insurance papers carefully to see if the car has had any accidents.

    • Research and vehicle history: It is important that you do thorough research about the car before buying it. Various details of the car can be found online. It is important to check the vehicle history as well. This will help in checking if the car has had any accidents. You can also check the service history to see if the car has undergone any major repairs.
    • Registration Certificate transfer: Once you have purchased the car, ensure that the Registration Certificate (RC) is transferred to your name. The form for the transfer of RC must be signed by you as well the previous owner. In case the car is registered at a different state, a No Objection Certificate (NOC) is required. A NOC is also required if the previous owner has purchased the car on finance.
    • Transfer of insurance: It is vital that the car has valid insurance. In case you buy the car, the insurance must be transferred to your name immediately. The insurance policy becomes void if it’s in the previous owner’s name, even if the RC is in your name.
    • No Claim Bonus transfer: The insured always receives the No Claim Bonus (NCB). NCB is never provided to the insured vehicle. Only transfer of the insurance policy to your name is possible. You will not be able to transfer the NCB to your name. Therefore, you will have to pay the difference amount for the remainder of the policy period.
    • Service the car before use: It is important that the car is completely checked and serviced before initial use. Changing the required fluids, clean up, and required fixes must be completed before the first use. In case of any cracks or rust, you must get it fixed.

    Frequently Asked Questions on Used Car Loans

    Can I apply for a used car loan with a co-applicant?

    Yes, you can apply for a loan to purchase a second-hand car with a co-applicant, but this is necessary only when your income does not meet the minimum income eligibility criteria. In such instances, your spouse or a relative who resides in the same address as you can be the co-applicant.

    Do I have to make a down payment to avail a pre-owned car loan?

    Some lenders will ask you to make a down payment when you avail a used car loan. However, many lenders will offer up to 100% financing which means you do not need to make any down payment.

    Will I be charged for prepaying a used car loan?

    Yes, many lenders will charge you a penalty fee for prepaying your loan except for a few such as Indiabulls, United Bank of India, and Tata Capital who do not levy any penalty on prepayment.

    Can I avail a pre-owned car loan on my existing car?

    Yes. There are some lenders who will allow you to avail a used car loan on your existing car. One such lender is Tata Capital which will offer up to 120% of your car’s current value as cash. You can avail up to Rs.20 lakh under this facility.

    How do I repay the used car loan I availed?

    There are various ways through which you can repay your used car loan. They are direct debit, Electronic Clearing Service (ECS), and post-dated cheques (PDCs). Almost all lenders will allow repayment through any one of these ways.

    Will registration charges and insurance be included in the pre-owned car loan?

    Some loan offerings may include registration charges, but not the insurance charges. Insurance charges will need to be paid by the borrower upfront.

    Can I avail a used car loan if my credit score is low?

    Before any lender offers you a loan, they will first look at your credit history to evaluate your repayment capabilities. Most lenders will offer you a loan only when your credit score is 750 and above. So, if you feel that your credit score is low, first confirm it by checking your score on the BankBazaar website. Once you check your score, you can take corrective measures to enhance it and then apply for a loan.

    Do I have to provide collateral or security to avail pre-owned car finance?

    No, you do not have to provide any security or collateral to avail a pre-owned car loan as the vehicle itself will be considered as a security. In the event of you defaulting on your EMI payments, the lender has the right to seize your vehicle and recover the loan amount.

    Is there a restriction on the type of cars that I can purchase with the used car loan?

    You can buy any kind of car such as sedans, hatchbacks, sports utility vehicles (SUVs), etc., with used car financing. However, lenders will check for the age of the car before offering you a used car loan.

    What is the maximum repayment tenure I can opt for my used car loan?

    The maximum repayment tenure offered on pre-owned car loans is 84 months or 7 years which is offered by the State Bank of India (SBI). However, it is always recommended that you choose shorter repayment tenures because you will end up paying higher interest over the loan tenure. Shorter repayment tenures would mean higher EMIs but in the long run, it will help you cut down on the interest payable towards your car loan.

    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.

    Used Car Loan Reviews

    • Axis Bank Car Loan
      "They should decrease the charges"
      0.5 4.0/5 "Great!"
      I have selected the car loan from Axis bank since i got the offer. I bought the loan amount of Rs. 2.40 lakhs and the processing fee was a nominal one because its only Rs. 5000. There is no down payment because they cut the one month down payment. The process was smooth when i get the loan.
      Was this review helpful? 4
      , bangalore
      Reviewed on Oct 17, 2019
    • Axis Bank
      Axis Bank Car Loan
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I have a car loan with Axis Bank, it was processed by the dealer. The moment, I give the documents they have finished all the process within couple of days and there was no hassle. The interest rate is competitive at that point of time. The loan duration is 5years.
      Was this review helpful? 4
      , chennai
      Reviewed on Oct 17, 2019
    • Axis Bank Car Loan
      "Best Service"
      0.5 4.0/5 "Great!"
      I have applied for Axis Bank car loan directly through Online .The car model is 2013 it was Maruti Alto 800.I have availed for the loan amount of 2.35 lakhs for the tenure of 5year,The rate of interest was 10.375% it was really nominal and the loan amount on time . I am really satisfied with the service so far .
      Was this review helpful? 5
      , bangalore
      Reviewed on Oct 16, 2019
    • ICICI Bank Car Loan
      "Good Loan Service"
      0.5 5.0/5 "Blown Away!"
      From ICICI, i got the car loan. From the showroom side, they have processed the loan with a good offer. The interest rate is 9.75% and there was no processing fee and i had made the down payment of Rs. 3 lakhs and the loan amount is Rs. 5 lakhs. Overall, the loan process was smooth.
      Was this review helpful? 6
      , bangalore
      Reviewed on Oct 14, 2019
    • Axis Bank Car Loan
      "Good"
      0.5 4.0/5 "Great!"
      I have taken a car loan with AXIS bank on 2 months before which I got a chance through showroom to apply for a loan. For the amount of 4 lakhs for the tenure period of 5 years. The rate of interest high 11%. They have sanctioned a loan by 10 days. There was processing fee detected for 6 thousands. The car name is Hyundai Centro.
      Was this review helpful? 5
      , saharsa
      Reviewed on Oct 14, 2019
    • HDFC Bank Car Loan
      "Excellent Loan Service"
      0.5 5.0/5 "Blown Away!"
      My car loan was purchased from HDFC. In TATA motors only HDFC loan service available. After i given all the papers, they have sanctioned the loan immediately. I took the loan amount of Rs. 6 lakhs and Through ECS i'm paying the ECS. I pay the down payment of Rs. 1.75 lakhs.
      Was this review helpful? 3
      , dindigul
      Reviewed on Oct 14, 2019
    • HDFC Bank Car Loan
      "Fine Loan Service"
      0.5 5.0/5 "Blown Away!"
      For my car loan, already 19 months got over by paying EMI still 31 months are pending. I took the car loan amount of Rs. 2.95 lakhs and they have offered me interest rate of 8%. I have been paying the EMI amount of Rs. 6430. Totally i have chosen the tenure period of 5 years.
      Was this review helpful? 2
      , hyderabad
      Reviewed on Oct 13, 2019
    • Axis Bank Car Loan
      "Excellent"
      0.5 4.0/5 "Great!"
      I made down payment directly to the showroom and the balance amount was borrowed with Axis Bank to purchase the car. The customer service is very good. The rate of interest is lowest among all the banks when I took the loan. Its been 5 to 6 years ago and the experience was very smooth.
      Was this review helpful? 1
      , kanpur
      Reviewed on Oct 12, 2019
    • SBI Car Loan
      "Cheap and best"
      0.5 5.0/5 "Blown Away!"
      SBI has provided me a cheap and best loan service so i bought the car loan with them. They sanctioned the loan in 3 days. The interest rates are 8.9% which is a nominal one. SBI car loan was closed 2 years before. I have fore-closure the loan for that they have not taken any charges.
      Was this review helpful? 9
      , agra
      Reviewed on Oct 11, 2019
    • Kotak Car Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I have taken Car Loan directly through Kotak Mahindra Bank .The model of the vehicle is Hyundai I 10,I have got the loan amount on time ,I have got all the details about the loan process very clearly .I have got this loan on paperless approval.I am really satisfied with the service .
      Was this review helpful? 4
      , hyderabad
      Reviewed on Oct 10, 2019
    • SBI Car Loan
      "Floating interest rates"
      0.5 5.0/5 "Blown Away!"
      My car loan was taken from SBI its because of the floating interest rates. They have sanctioned the loan in 4 to 5 days. I took the loan 7 years back hence i have no idea about the processing fee and down payment. The interest rate was convenient for me. I have received the NOC letter as well once i closed the loan.
      Was this review helpful? 14
      , bangalore
      Reviewed on Oct 08, 2019
    • HDFC Bank Car Loan
      "Very Good Loan service"
      0.5 5.0/5 "Blown Away!"
      Purchased the car loan from HDFC and they have approved the immediately. I got the loan amount of Rs. 6.5 lakhs and they have offered me a interest rate of 9% and I'm paying the EMI amount of Rs. 11000 for the duration of 7 years. The EMI amount is automatically deducted from my account every month.
      Was this review helpful? 5
      , hyderabad
      Reviewed on Oct 06, 2019
    • Sundaram Finance Car Loan
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I have taken a car loan with SUNDARAM FINANCE through a showroom. An executive came and collected all the documents from my end and they have sanctioned a loan for 1 lakh 60 thousands for the tenure period of 3 years. The rate of interest was 18%. The car model is alto 2014 model.
      Was this review helpful? 1
      , erode
      Reviewed on Oct 05, 2019
    • SBI Car Loan
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      From SBI I have taken a car loan on 5 months before which was processed through showroom. I have provided some required documents and they have sanctioned a loan within 2 days. The amount was sufficient for the tenure period of 5 years. The rate of interest and processing fee are nominal. The car model is Mahindra CUV300 it is around 12 lakhs.
      Was this review helpful? 13
      , itanagar
      Reviewed on Oct 04, 2019
    • YES Bank Car Loan
      "Good"
      0.5 5.0/5 "Blown Away!"
      I have a four wheeler loan from Yes Bank. I have already paid 18 months emi. Rate of interest is nominal as comparison to other banks. Yes Bank customer service is very good. Emi payment is very easy. Their charges are very good. I had so pay 1200 penalty for late payment.
      Was this review helpful? 5
      , kolkata
      Reviewed on Oct 04, 2019
    • ICICI Bank Car Loan
      "Good Experience"
      0.5 5.0/5 "Blown Away!"
      Purchased the car loan from ICICI and i applied in the month of April. HDFC is not disbursing the car loan and since i have salary account with ICICI, i have chosen them. They have disbursed the loan in 24 hours. The given interest rate is 9.5% approximately. I have been paying the EMI amount of Rs. 12000 and i select the tenure period of 60 months.
      Was this review helpful? 5
      , bhopal
      Reviewed on Oct 04, 2019
    • HDFC Bank Car Loan
      "Good "
      0.5 5.0/5 "Blown Away!"
      I am using HDFC BANK credit card since 2 years. I have a limit of 1.04L and am completely happy with that. I never converted the payments into EMI. The annual fee is applicable. I have been using the card for shopping and getting good reward points but have not redeemed till now.
      Was this review helpful? 8
      , hyderabad
      Reviewed on Oct 01, 2019
    • SBI Car Loan
      "Good"
      0.5 5.0/5 "Blown Away!"
      The services and rate of interest is good with State Bank of India interms of car loan. I have purchased Grand i10 in 2015, the loan process was very simple. They have provided me 80% funding and made down payment of 1L. The loan duration is 7years for 7L.
      Was this review helpful? 14
      , visakhapatnam
      Reviewed on Sep 28, 2019
    • review Car Loan
      "Good Experience"
      0.5 5.0/5 "Blown Away!"
      I took the car loan from Tata Motor Finance, per month I used to pay the emi amount around Rs.13,000. I have taken Rs.4 lakhs of loan for the duration of four years, that experience was good. Through dealer I completed the process, the documentation was easy through their field executives.
      Was this review helpful? 7
      , hyderabad
      Reviewed on Sep 27, 2019
    • HDFC Bank Car Loan
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I have taken a car loan with HDFC bank on 2 years before which was processed through a showroom. The amount was sufficient of 3 lakhs for the tenure period of 3 years. The rate of interest was nominal. The car model was Ertiga. On monthly payment is 7 thousands.
      Was this review helpful? 6
      , hyderabad
      Reviewed on Sep 26, 2019
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