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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
    PA PL OTP
    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
    9.10% - 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
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    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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    Eligibility Criteria
    8.95% Floating
    ₹500 to ₹20 L
    75L Max
    Up to 7 years
    What you'll love
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    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.

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    Used Car Loan Reviews

    • HDFC Bank Car Loan
      "Best Service"
      0.5 5.0/5 "Blown Away!"
      I have taken car loan through HDFC Bank .I am not sure about rate of interest since taken long back .The vehicle variant is Hyundai I 10.The loan was successfully closed and i have paid the loan through EMI basis only .There was no drawbacks faced so far .I am satisfied with the service.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jan 17, 2020
    • review
      review Car Loan
      "Excellent Loan Service"
      0.5 5.0/5 "Blown Away!"
      From TATA Finance, i bought my car loan because the dealer convinced me where i took the car. They have sanctioned my loan immediately and i have made the down payment of Rs. 1.2 lakhs and i got the loan amount of Rs. 10.7 lakhs. I have been paying the EMI amount of Rs. 18000 on a monthly basis and i need to pay this EMI for 5 years. They do have part payment and pre-closure facility without any extra charges.
      Was this review helpful? 0
      , pune
      Reviewed on Jan 17, 2020
    • review Car Loan
      "Good service"
      0.5 3.0/5 "Satisfactory"
      I have taken a car loan from TATA MOTORS FINANCE on 7 years back. I got an offer through showroom with the amount of 1.30L tenure period of 5 years. The rate of interest was nominal. EMI is nominal to pay. I had done down payment of 50K. I am not aware about pre closure. The car model is NANO. Once I had closed the loan received NOC letter on time.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jan 16, 2020
    • HDFC Bank Car Loan
      "Good Loan Service"
      0.5 5.0/5 "Blown Away!"
      From HDFC, i have taken my car loan because the documentation process was smooth and they approved my loan easily. Loan process was speed and they will complete all the process in 2 days. Interest rates was on a higher side. I made the down payment of Rs, 1 lakhs and i pay the EMI amount of Rs. 14000 every month. I took the loan amount of Rs. 8 lakhs with the duration of 7 years.
      Was this review helpful? 0
      , coimbatore
      Reviewed on Jan 16, 2020
    • Sundaram Finance Car Loan
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      My sister was working in SUNDARAM FINANCE company, so she has suggested to take car loan on 11 years before. The amount of 2.5L with tenure period of 3 years. They have sanctioned the loan within 1 week. Rate of interest was 12.6% nominal at that time. I had done some down payment of 1.3L. EMI I used to pay of 6500 rupees. The car model is Wagon R. But I have pre closed this loan within 1.5 years and I had received NOC letter on time.
      Was this review helpful? 0
      , alleppey
      Reviewed on Jan 14, 2020
    • HDFC Bank Car Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I have taken car loan through HDFC Bank.I am not remembering rate of interest and the processing fee .I have taken this loan long back and successfully closed as well.The name of the vehicle is Ford Figo and loan got sanctioned on time as well .The loan process was very smooth and satisfied.
      Was this review helpful? 1
      , srikakulam
      Reviewed on Jan 13, 2020
    • Syndicate Bank Car Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I had a best offer in Syndicate bank for Car loan. Its been completed almost 4 years. I have purchased Volkswagen polo on exchanging my old card so it took 4 days to process my loan. I have opted for 5L loan amount with 6.5% interest rate. I approached the dealer further bank executive came to my office and completed all the formalities.
      Was this review helpful? 0
      , kochi
      Reviewed on Jan 13, 2020
    • SBI Car Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I haven taken car loan from SBI. Everything was done on time and car was delivered on time .The rate of interest was bit high and the car model was MARUTI Suzuki Baleno .The loan amount got sanctioned on time .The loan process was clearly shared by the agent .I am satisfied with the service so far.
      Was this review helpful? 1
      , mumbai
      Reviewed on Jan 12, 2020
    • HDFC Bank Car Loan
      "Excellent service "
      0.5 5.0/5 "Blown Away!"
      I have taken a car loan with HDFC bank on 1.3 years. I got an offer directly from them. The loan amount of 6.90L which is sufficient with tenure period of 7 years. Rate of interest of 10.5% and processing fee is not aware. I had done the down payment of 1L. There is an option of pre closure after 6 months. I use to get remainder message on time to pay EMI of 10,240 rupees.
      Was this review helpful? 2
      , kochi
      Reviewed on Jan 11, 2020
    • SBI Car Loan
      "Documentation process can be improved"
      0.5 5.0/5 "Blown Away!"
      I went to SBI branch directly to apply the car loan and I have done all the paper work as well. I can make the part payment through online because of this reason i have selected this bank. I don't find any issue so far and the overall process got completed in a single day. I took the loan 2 to 3 years before and the loan is still going on.
      Was this review helpful? 1
      , chennai
      Reviewed on Jan 08, 2020
    • SBI Car Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      The interest rate is low, no part payment or fore closure charges. It is very flexible so I have taken a loan from SBI. Bank offered me with 13L, complete price of the car, but i have opted only for 10L with the rate of interest 9.1%. It took only 3 days to process the loan.
      Was this review helpful? 3
      , bangalore
      Reviewed on Jan 08, 2020
    • HDFC Bank Car Loan
      "Need to stand on commitment"
      0.5 5.0/5 "Blown Away!"
      I purchased Maruthi suzuki swift Dzire last month. The price of my car is 8.95L, I have opted thid loan with HDFC. I made a down payment around 2 lakhs and the remaining amount was converted as loan. The loan got processed within 2 days. They committed with 8.1% rate of interest, at last they provided the interest of 8.5%.
      Was this review helpful? 0
      , faizabad
      Reviewed on Jan 08, 2020
    • Kotak Car Loan
      "Excellent Loan Service"
      0.5 5.0/5 "Blown Away!"
      I was an employee of Kotak Mahindra bank so that i got the car loan from the same bank. Interest rate are more competitive. Since i was a employee i got a good discounts on interest rate when i took the car loan. Its going to be over by next year since tenure period is 22 years. They have sanctioned my immediately and i have made some down payment also.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jan 08, 2020
    • YES Bank Car Loan
      "h"
      0.5 0.5/5 "Unacceptable"
      baseless staff behaviour.., hrassing calls before emi due date............. . ........ ......................... .............................!.....................................................................
      Was this review helpful? 0
      , ludhiana
      Reviewed on Jan 08, 2020
    • HDFC Bank Car Loan
      "Good Service"
      0.5 4.0/5 "Great!"
      I have applied for HDFC Bank car loan and chosen the car model of Maruti Dzire 2018.The rate of interest and the processing fee was very high since had a requirement availed this loan. I am planning to change the financial institution of this loan .
      Was this review helpful? 1
      , hyderabad
      Reviewed on Jan 06, 2020
    • HDFC Bank Car Loan
      "Speedy process"
      0.5 4.0/5 "Great!"
      I have applied for the car loan directly with HDFC BANK and submitted my documents and quotation. The loan was processed with in 5 days. I have purchased i20, on road price is 9.5L. I made a down payment of Rs. 6 L and the remaining amount was loan with the interest rate 9.5%.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jan 05, 2020
    • Cholamandalam Finance Car Loan
      "Good Car Loan Services"
      0.5 5.0/5 "Blown Away!"
      I have taken the car loan from Cholamandalam. I got it 7 years back Actually my friend was working in Cholamandalam company so that i have selected the same. I took the loan amount of Rs. 1 lakh and i have paid the down payment of Rs. 3.5 lakhs when the total cost of the car is Rs. 4.5 lakhs. I have paid the EMI amount of Rs. 5000 per month.
      Was this review helpful? 0
      , dehradun
      Reviewed on Jan 03, 2020
    • HDFC Bank Car Loan
      "Best Service"
      0.5 5.0/5 "Blown Away!"
      I have taken car loan directly through HDFC Bank.The car model was Tata Figo .I have got the loan amount on time without any hassle.The rate of interest and the processing fee was very nominal.Each and every update about this loan was clearly explained by the agent .I am sastisfied with the overall service .
      Was this review helpful? 0
      , agartala
      Reviewed on Jan 02, 2020
    • ICICI Bank Car Loan
      "Need to reduce the charges."
      0.5 4.0/5 "Great!"
      I have taken a car loan from ICICI BANK. There is no specific reason for it as all the banks are providing with the similar rate of interest. I purchase Honda i20 sports model and the price is around 7 lakhs. I done a down payment of 3 lakhs and the remaining is loan with the interest of 12%. Loan got processed with a week of time.
      Was this review helpful? 2
      , ghaziabad
      Reviewed on Dec 31, 2019
    • ICICI Bank Car Loan
      "Best service"
      0.5 5.0/5 "Blown Away!"
      I have taken a car loan recently from ICICI before two months. I have purchased Maruti Suzuki Eeco, on road price is Rs.5,08,000. I have done a down payment of Rs.1 lakh and the remaining was the loan amount. Interest rate is normal and the tenure of 3 years. I pay the monthly EMI of Rs.8500. It was processed through the bank executive with the help of showroom and loan was disbursed with in few days.
      Was this review helpful? 1
      , chennai
      Reviewed on Dec 27, 2019
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