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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
    Documents
    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

    • Toyota Finance Car Loan
      "Really cool loan"
      0.5 5.0/5 "Blown Away!"
      My car loan was taken from Toyoto finance because the interest rate is very less and the process is very easy. They have provided the loan within two days. Interest rate was 9.99% and the processing fee was nil. I have chosen the tenure period of 5 years. I have made the down payment of Rs. 10 lakhs. Total cost of the car is Rs. 23 lakhs in that i got the loan amount of Rs. 13 lakhs. I'm paying the EMI amount of Rs. 28000.
      Was this review helpful? 0
      , bangalore
      Reviewed on Nov 18, 2019
    • ICICI Bank
      ICICI Bank Car Loan
      "Very much happy"
      0.5 5.0/5 "Blown Away!"
      I have gone for a car loan in ICICI BANK, they have approved and sanctioned the loan within 24hours based on my savings account experience. So far, I have completed 9months and the total tenure is 3years. The interest rate is reasonable. They waived off the processing fee since a Privilege customer.
      Was this review helpful? 3
      , chennai
      Reviewed on Nov 15, 2019
    • Cholamandalam Finance Car Loan
      "Best Service"
      0.5 5.0/5 "Blown Away!"
      I have taken car loan which was taken through cholamandalam finance .This was referred by car showroom dealer and the car model was Maruti Suzuki Swift.The rate of interest and the processing fee was nominal .The agent gave all the information about the loan process and within 4 days got the loan amount.
      Was this review helpful? 6
      , pune
      Reviewed on Nov 12, 2019
    • SBI Car Loan
      "Fast approval loan"
      0.5 5.0/5 "Blown Away!"
      Taken my car loan 4 months back. I have bought the loan amount of Rs. 10 lakhs and they have sanctioned the loan immediately and the documentation process was simple and good. Within 1 day, they have processed the loan. They have provided me a interest rate of 8% and i have chosen the duration of 120 months.
      Was this review helpful? 6
      , hyderabad
      Reviewed on Nov 12, 2019
    • SBI Car Loan
      "Low Interest rates"
      0.5 5.0/5 "Blown Away!"
      Bought my car loan from State bank of India its because of less interest rate when i compared with others. I got the loan amount of Rs. 3 lakhs and i haven't paid any down payment. I have paid the EMI amount of Rs. 10000 per month. I have selected the tenure period of 3 years.
      Was this review helpful? 4
      , new delhi
      Reviewed on Nov 10, 2019
    • Kotak Car Loan
      "Good Loan Service"
      0.5 5.0/5 "Blown Away!"
      My car loan was taken from Kotak Mahindra and i never had a chance to speak with their customer care because the amount is auto deducted from my account. Based on the eligibility, kotak mahindra bank has given me a car loan. The provided interest rate is nominal for me.
      Was this review helpful? 1
      , bangalore
      Reviewed on Nov 10, 2019
    • SBI Car Loan
      "Good Service"
      0.5 4.0/5 "Great!"
      I have state Bank Of India car loan,the rate of interest was very nominal .I have got the loan amount sanctioned on time without any delay .Each and every details was clearly shared by the agent .I have submitted the required documents and i am comfortable with the service.
      Was this review helpful? 1
      , chennai
      Reviewed on Nov 09, 2019
    • HDFC Bank Car Loan
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I have taken car loan directly through HDFC Bank .The rate of interest and the processing fee was nominal .Each and every details about this loan was clearly shared by the agent.I have got the loan amount on time without any hassle .This was a paperless approval and i am comfortable with the service so far.
      Was this review helpful? 1
      , gurgaon
      Reviewed on Nov 09, 2019
    • IDBI Car Loan
      "Reliable and affordable"
      0.5 5.0/5 "Blown Away!"
      I have taken a car loan from IDBI bank and from the day one , I didn't face any issue and they are very responsive. Earlier my friend used their services and he recommended me and i tried it then it work it out. Within 1 day, they have sanctioned the loan and the interest rate is affordable.
      Was this review helpful? 4
      , nellore
      Reviewed on Nov 07, 2019
    • Kotak Car Loan
      "Good bank to apply for a car loan "
      0.5 5.0/5 "Blown Away!"
      On 5 years before I was taken a car loan with KOTAK MAHINDRA BANK, I got a chance to apply through showroom. The amount which was provided 2L tenure period of 2 years. Rate of interest was nominal and processing fee of 3K. I use to get a remainder message on time. Now I closed the loan and received NOC letter as well. For an EMI paid for 7890 rupees.
      Was this review helpful? 6
      , chittoor
      Reviewed on Nov 04, 2019
    • Axis Bank Car Loan
      "Best Service"
      0.5 4.0/5 "Great!"
      I am using Axis Bank car loan which was directly taken through Bank.Still this loan is active,The card model was of 2019 and it was Maruti Wagon R,I have got this car loan on exact time frame .Each details about this loan process was clearly shared by the agent.The rate of interest was nominal and so far completed 6 EMI.
      Was this review helpful? 8
      , kochi
      Reviewed on Nov 04, 2019
    • HDFC Bank Car Loan
      "Excellent "
      0.5 5.0/5 "Blown Away!"
      Recently, I availed a car loan from HDFC BANK because I like this bank and all transactions are done with them. They have given me so many options on the net banking for the pre approved loan which is good but this time, have approached the executive directly and I bought a MARUTI SWIFT new car. I have paid nearly 2L as down payment. The interest rate is 9.25%.
      Was this review helpful? 4
      , visakhapatnam
      Reviewed on Nov 03, 2019
    • IndusInd Bank Car Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      One year before I have taken a car loan from INDUSIND BANK which was applied through showroom. The loan amount was sufficient and tenure period of 5 years. Once all verification done they have sanctioned the amount within one week. The rate of interest was nominal only. The car model which I bought is HYUNDAI.
      Was this review helpful? 4
      , coimbatore
      Reviewed on Oct 31, 2019
    • HDFC Bank Car Loan
      "Good bank"
      0.5 5.0/5 "Blown Away!"
      I had chosen my car loan from HDFC. When i was bought the car, my friend is working in HDFC so he only recommended me and the showroom people also had a tie up with HDFC only. One of my friend already took HDFC car loan so i took it from them. They have offered me a interest rate which is nominal. I pay the EMI amount of Rs. 8000.
      Was this review helpful? 3
      , bangalore
      Reviewed on Oct 30, 2019
    • HDFC Bank Car Loan
      "Interest rates can be reduced"
      0.5 5.0/5 "Blown Away!"
      HDFC people are transparent on the loan service and whatever they said, they have sanctioned the same. There is no hidden charges. They explained about the processing fee, interest rates everything at the initial stage very clearly. I did a little survey and i found that HDFC people are genuine so i got the car loan from HDFC. The process was well managed right from the day 1 and end of the loan. They were behaved very professionally.
      Was this review helpful? 4
      , pune
      Reviewed on Oct 29, 2019
    • SBI Car Loan
      "Good Service"
      0.5 4.0/5 "Great!"
      I have taken a car loan with SBI on 11 months before which was suggested by my friend who he is an agent. EMI paying for 11,600 rupees. They have given for 7 lakhs and 13 thousands tenure of 7 years. Within one week loan got sanctioned. The car model is TATA Nexon.
      Was this review helpful? 12
      , goalpara
      Reviewed on Oct 28, 2019
    • Axis Bank Car Loan
      "Best service"
      0.5 5.0/5 "Blown Away!"
      I had a Pre-approved car loan with AXIS Bank, according to my salary I was eligible for Rs. 7 lakhs and rate of interest is 10% but I took only Rs.3.5 lakhs with the interest rate of 9.5% after insisting them to reduce. I took loan before 1 year and opted for the model Maruthi suzuki Celerio. The documents required was only 3 months salary slip and the Aadhar copy.
      Was this review helpful? 6
      , imphal
      Reviewed on Oct 26, 2019
    • SBI Car Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      From SBI taken a car loan on 2 months before, through showroom suggested for this loan. With interest of 9.5% nominal. They have given for 5 lakhs tenure period of 7 years. IDV of 5.5 lakhs with some discounts given for 5 lakhs. For a processing fee of 2 thousands.
      Was this review helpful? 11
      , hyderabad
      Reviewed on Oct 23, 2019
    • Sundaram Finance Car Loan
      "Good Loan Service"
      0.5 4.0/5 "Great!"
      Purchased the car loan from Sundaram Finance. In the year of 2016, i took this loan. Interest rates are nominal in Sundaram. I got the loan amount of Rs. 5 lakhs and i have done the down payment of Rs. 2 lakhs. I have already closed the loan because the tenure period is only 2 years.
      Was this review helpful? 8
      , hyderabad
      Reviewed on Oct 23, 2019
    • HDFC Bank Car Loan
      "Good Response from HDFC"
      0.5 5.0/5 "Blown Away!"
      HDFC car loan was actually referred by my friend. I purchased the loan amount of Rs. 6.5 lakhs in that i made a down payment of Rs. 2 lakhs. Processing fee was Rs. 2000 approximately. I have chosen the tenure period of 7 years. I have been paying the EMI amount of Rs. 10500 per month.
      Was this review helpful? 7
      , bangalore
      Reviewed on Oct 23, 2019
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