A good second-hand car can be bought with the help of a used car loan. Used car loans are provided at attractive interest rates and come with a repayment tenure of up to 7 years. Certain lenders provide loans of up to 100% of the car’s value. Most banks and NBFCs provide used car loans. Self-employed individuals and salaried employees can avail a used car loan.
Top Lenders Offering Pre-Owned Car Loans
12.00% - 14.50%
State Bank of India
9.75% - 13.25%
Starts from 15%
13.75% - 16.00% (Rack Interest)
Punjab National Bank
Starts from 7.90%
14.40% - 16.40%
Contact the bank
Published On : 2021-06-18
Used Car Loans – Features and Benefits
The main benefits and features of a used car loan are mentioned below:
The loan amount that is being availed may be less when compared to a new car loan. Therefore, your monthly EMIs will be low.
Long repayment tenure.
Up to 100% financing is provided by certain banks and NBFCs.
The process to apply for the loan is simple and can be completed online.
The insurance costs and depreciation rates are lower when compared to a new car.
Minimum paperwork needs to be submitted.
Certain banks and NBFCs offer flexible repayment terms.
Things to Keep in Mind While Applying for a Used Car Loan
Given below are some of the important points that must be considered when availing a used car loan:
The interest rates for a used car loan are higher when compared to a new car loan.
Certain NBFCs and banks do not provide a loan if the car is more than 3 years old.
The insurance cost will not be covered in the loan amount.
The eligibility criteria that must be met for salaried employees and self-employed individuals will vary and are mentioned below:
Age Limit: 21-65 years
Income: At least Rs.15,000 per month
Income Status: You must be working in the current organisation for at least a year
Age Limit: 25-65 years
Income: Must make a profit of at least Rs.1.5 lakh in a year
Income Status: Must be in the same line of business for at least 3 years
The list of documents that must be submitted when applying for a used car loan is mentioned below:
Car valuation report
Identity Proof: Any of the below-mentioned documents can be submitted as proof of identity:
Address Proof: Any of the below-mentioned documents can be submitted as proof of address:
Income Proof: The below-mentioned documents must be submitted as proof of income:
Profit and loss account
How to Apply for a Used Car Loan
Visit the bank branch or NBFC office where you would like to avail a loan.
Fill the application form.
Submit the necessary documents to check if you are eligible for the loan.
Discuss the interest rates, processing fee, etc., with the lender to process the loan.
Tips to Make the Loan Application Process Easy
Do a thorough research online to check for a lender that provides a used car loan at low interest rates and a suitable tenure. Various banks and NBFCs offer used car loans at attractive interest rates.
Opt for an online application process. This helps in saving time.
You can use the car loan EMI calculator offered by BankBazaar to check the monthly payments. The calculator is simple to use and basic details such as the tenure, loan amount, processing fee, and interest rate must be entered.
Keep the relevant documents ready. Any delay in submitting the documents will lead to a longer time for the loan to be processed.
Choose an established lender so that the loan process is quick.
Important Things to do When Buying a Used Car
Some of the important things that you must do when you buy a used car are mentioned below:
Check the car: Ensure that the car is checked thoroughly. You can take the help of a mechanic to check the car. If there are any issues with the car you can negotiate the price. Drive the car where the traffic is less, to check for any vibrations.
Check the papers thoroughly: It is vital that the insurance papers and the registration certificate are checked thoroughly. Check if the engine number and chassis number on the car match the ones mentioned on the copies. It is also important to check if the car has had any accidents.
Vehicle history: It is vital that the vehicle history is checked before buying it. Various details of the car can be found online. Checking the vehicle history helps to see if the car has had any accidents and if there have been any service issues.
Transfer the Registration Certificate: Once the car has been purchased, ensure the Registration Certificate (RC) is transferred to your name. If the car is registered in another state, a NOC is required. If the car has been purchased on a loan by the previous owner, a NOC is required as well.
Transfer the Insurance: The car insurance policy must be transferred to your name immediately. The insurance policy is void in case it is in the name of the previous owner even if the RC is in your name.
Service the car: It is vital that the car is serviced before you start using it. In case of any rusts, it must be fixed. Change the fluids and clean up the car before it is used for the first time.
Frequently Asked Questions on Used Car Loans
Should I make a down payment for a used car loan?
Certain lenders require a down payment to be made when you avail a used car loan.
Do I have to provide security or collateral when I avail a used car loan?
No, security or collateral need not be provided when you avail a used car loan. The car acts as security.
Can I avail a used car loan if I have a low credit score?
In case of a low credit score, the application form will be rejected, or the interest rates will be high.
Can I avail a used car loan with a co-applicant?
Yes, you can avail a used car loan with a co-applicant.
Will there be any foreclosure charges?
Yes, many lenders charge a penalty in case of foreclosure.
Skoda relaunches the Rapid Rider in India starting at an ex-showroom price of Rs.7.79 lakh
Skoda has relaunched the base variant of the Skoda Rapid, the Rapid Rider, at an ex-showroom price starting from Rs.7.79 lakh. The car is available in two colours, Carbon Steel and Candy White. Some of the main features of the car are 2 airbags, ABS, stainless steel scuff plates, steel wheels, power windows, climate control, and rear parking sensors. The car vehicle is powered by a 1.0-litre petrol engine. Even though the car is similar in size to the Hyundai Verna and Honda City, the price of the car is closer to the premium hatchback segment.
27 January 2020
Honda launches the Amaze and WR-V Exclusive Editions in India
Japanese automaker Honda has recently launched the Exclusive Editions of the Honda Amaze and Honda WR-V is India. The former has been priced at Rs.7.96 lakh while the latter starts at Rs.9.70 lakh. Both prices are for the base models (ex-showroom, Delhi).
The cars will be available in both petrol and diesel variants. The petrol trim is powered by a 1.2-litre petrol engine which churns out 90 hp of max power and 110 Nm of peak torque. The diesel variant, on the other hand, is powered by a 1.5-litre which produces 100 hp of max power and 200 Nm of peak torque. The diesel variant also comes in an automatic transmission version and produces about 80 hp of max power and 160 Nm of peak torque. The auto transmission version is available in CVT variant. The Exclusive Edition of the cars come with added chrome detailing and a host of other cosmetic addtions.
3 November 2020
CRR regulations for home loans, car loans and MSME loans eased by RBI
The Reserve Bank of India made an announcement on Monday, asserting the exemption of incremental MSME loans, car loans and home loans from maintaining Cash Reserve Ratio. According to the announcement, these loans need not maintain CRR for a period of 5 years or the loan tenure, whichever is lower. What this basically means is that the costs for banks will be lower and liquidity can improve. At the monetary policy committee meeting, the central bank had announced that home loans, MSME loans and car loans will be subtracted from the overall amount of deposits at the time of calculating Cash Reserve Ratio. Majority of the bankers are satisfied with the new announcement as a lower exemption time period would have meant that the prices would have to be different.
26 April 2019
CarDekho's used car loan vertical hits cumulative volume of Rs.1,500 crore
According to a press release, auto-tech giant, CarDekho.com mentioned that they have reached the Rs.100 crore milestone for a run rate of their used car loans. The vertical of the company which deals in used car loans have processed a cumulative volume of Rs.1,500 crore until December 2019. The company has also become the largest fintech automobile website in the country.
The used car loan business of the company has grown by 180% in the past year. The business closed at Rs.107 crore in December 2019 and the growth was majorly led by the Tier-1 cities.
The country has one of the largest used car markets globally but in the last year, the penetration of loan was low in India. The CEO and co-founder, Amit Jain, the used car loan business has seen a growth rate of phenomenal proportions of 180% in 2019. An integral part of the used car industry is the discovery of the loan and processing part of it. Hence, the company is in the process of getting a license as an NBFC which will help them further better the consumer experience in the used car loan.
10 February 2020
Hyundai launches the Aura in India, priced at Rs.5.80 lakh onwards
South Korean car manufacturer Hyundai has launched an all-new subcompact sedan Aura in India. The price of the Hyundai Aura will range between Rs.5.80 lakh and Rs.9.22 lakh (ex-showroom price) and will be based on the Hyundai Grand i10 Nios. The Aura can be called the new-gen model avatar of the Xcent and will co-exist with Xcent like the old-gen Grand i10 and Grand i10 Nios. The Aura will be offered in 6 color options and 5 main variants. The Aura will compete with the likes of the Honda Amaze and Maruti Suzuki DZire. The Hyundai will come with 2 engine options – petrol and diesel under the hood and both the engines will be BS6 compliant. 82 bhp of power will be produced by the 1.2-litre naturally aspirated petrol engine while the maximum torque produced will be 114 Nm. On the other hand, the 1.2-litre diesel engine of the Hyundai Aura will churn out 74 bhp of power and peak torque of 190 Nm. Both the engines will be mated to a 5-speed manual and an optional AMT transmission.
22 January 2020
Capital infusion for PSU banks unlikely to be announced in the budget
Capital infusion for Public Sector Banks (PSUs) is unlikely to be announced by the government in the upcoming Budget. The government will encourage PSUs to raise money from the market and recover bad loans faster.
According to various sources, banks may sell their non-core businesses in order to raise funds. The second budget of the Modi 2.0 government is expected to be presented by the Finance Minister Nirmala Sitharaman on 1 February 2020. According to various sources, banks will have a robust pipeline in order to recover from both NCLT and non-NCLT resolution cases this year. A headroom will also be provided in order to raise capital from the market. In the case of assets that are non-performing, according to various sources, 100% provisions have been done by banks. The sources further added that recovery from such accounts will be part of the bottom line immediately. State Bank of India (SBI) has already started the process of diluting its stake in UTI Mutual Fund and SBI Cards and Payment Services Ltd. Similarly, various state-owned lenders have also started this process in order to raise capital. Oriental Bank of Commerce and the United Bank of India will merge with Punjab National Bank to become the second largest bank in India. Similarly, Syndicate bank will merge with Canara Bank and Allahabad Bank will merge with Indian Bank. Corporation Bank and Andhra Bank will merge with Union Bank of India.
8 January 2020
Toyota – Suzuki global alliance formalised
Toyota Motor Corporation and Suzuki Motor Corporation, two of the biggest Japanese carmakers have recently signed an agreement in regard to their capital alliance. The agreement will establish a long-term alliance and promote collaboration in new sectors of the industry such as autonomous driving.
As per the terms of the alliance, the 2 automakers will be acquiring each other’s shares. Toyota will be owning around 4.94% of the shares of common stock in Suzuki. Similarly, Suzuki is planning to acquire some market shares of Toyota worth JPY 48 billion. The two companies have begun considering business partnership on 12 October 2016. Ever since, they have considered specific details. On 20 March this year, the companies announced that they would be taking specific considerations in order to engage in the joint product collaboration and development, mutual supply of products, and so on. The partnership has already launched the Toyota Glanza which is basically a rebadged Maruti Suzuki Baleno. Reports suggest that the Vitara Brezza, the Ertiga, and the Ciaz will also be supplied by Maruti Suzuki to Toyota. Both the automakers will be pushing hard for hybrid electric vehicles in the country. Toyota will be supplying its hybrid system to Suzuki for the same. In addition to that, the companies will also tie up to introduce a new Toyota C-segment MPV which will be supplied to Suzuki as well.
10 September 2019
Three new models to be launched by Tata Motors by 2021
Three new models will be launched by Tata Motors based on their design philosophy, Impact 2.0. The Nexon, Tigor, and Tiago will also get facelifts based on Impact 2.0. The current design philosophy is already a hit and Impact 2.0 will be its successor.
The first product to come with the new design philosophy was the Tata Harrier. Due to the success of the Harrier, Tata Motors is planning to launch three new models by 2020. The Altroz, which was shown at the 2019 Geneva Motor Show, is a premium hatchback and is likely to be launched during the festive season. Another car that is likely to be launched in the first three months of 2020 is the Buzzard or H7X. The car is similar to the Harrier but is a seven-seater and has been spotted testing in India several times. The Hornbill or H2X is a subcompact SUV that is expected to be launched by the end of 2020. The H2X will be the youngest of all cars to come with the Impact 2.0 design philosophy. However, the car is still in its concept stage and is expected to hit markets only by 2021. The facelift versions of the Tigor and Tiago are expected to be launched this year, while the Nexon facelift will be launched next year.
31 July 2019
New Hyundai Santro to cost Rs.25,000 more
For those who wish to buy the new Hyundai Santro, the car manufacturer has now hiked the prices of their base model to Rs. 4.15 lakh. With the roll out of the new Hyundai Santro, the Era and the D-Lite variants are now discontinued. Previously, the Hyundai Santro costed Rs.3.90 lakh. The new Hyundai Santro will be rolled out with features such as colored bumpers, AC vents for the front and back, ower windows, airbags for the passengers as well, and a multi-function steering wheel. Under the bonnet, the petrol variant of the Hyundai Santro will be powered by 68 bhp with a 1.1 litre three-cylinder engibe, while the CNG model of the Hyundai Santro will be powered by 58 bhp. Having sold 4,000 units every month across the country, the new Hyundai Santro which will be launched later this year in October will be competing with the Maruti Suzuki Wagon R and the Tata Tiago.
30 July 2019
Top startups in India which offer pre-owned vehicles
When it comes to buying pre-owned vehicles, there are a number of startups in India which are offering the facility. At present, the price difference between a used car and a new car, especially the bigger cars are likely to attract more people. Essentially, this means that people have easier access to cars which are as good as new at a much lower premium.
Some of the top startups which are offering this facility in India are Droom, CarDekho, Cars24, and Carwale. Droom is the pioneer in this sector. It is the first mobile marketplace in India to start the buying and selling of new and pre-owned vehicles. It is also the 3rd largest e-commerce company in the nation. CarsDekho is a car searching platform which helps people to understand and purchase the perfect vehicle for themselves. Cars24 and Carwake also offer an easy and fast experience, when it comes to finding out the perfect car.
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Through showroom got suggestion to take a car loan from AXIS bank. I taken this loan on 3 years back. I got the loan amount of 4L with tenure period of 4 years. The rate of interest was okay. I done the down payment of around 1.5L. EMI need to pay of 10,500 rupees. The car model is Swift Dzire. I taken for commercial purpose based on amount which I get on monthly doing the EMI payment.
I have taken car loan directly through Kotak Mahindra Bank. The car is secondhand and the model was INNOVA 2015 and the loan is still active and paying the premium on EMI basis .The rate of interest and the processing fee was nominal and they given a good service.
I have taken car loan directly through HDFC bank.The car model was TATA Nixon and still this loan is active. The rate of interest and the processing fee are medium it was 10.99% and this loan was sanctioned immediately within 2 to 3 days got the loan. Everything was fine so far until this loan was sanctioned .
I have chosen car loan from HDFC Bank on 3 years back. I made the down payment of Rs. 1.50L and the loan amount was Rs. 4.80L. The rate of interest was normal and i am paying EMI amount of Rs. 12,157 and i have purchased Swift BSI. I given my documents to the showroom itself without any difficulty.
I have taken car loan through Tata Capital Ltd directly .The vehicle name is Hyundai Eon and this loan was sanctioned on proper time frame .This loan is still active and paid the premium on Emi basis.Customer service was good to me so far .The rate of interest and the processing fee was medium.
I have taken car loan directly through Tamilnad Mercantile Bank.The rate of interest was very high, it was 14%.This loan was sanctioned on time without any delay .The car model was Maruti Suzuki Alto k10 vxi and there was no difficulties faced so far .This loan is still active and everything was good.
From ICICI Bank, i applied a car loan and the loan amount was Rs. 3.50L. I made a down payment of Rs. 90k and the rate of interest was normal. I have given my documents to the showroom and am planning to close the loan with in 2-3 months. I have purchased a Maruthi car.
I chosen ICICI car loan offer through showroom. I taken this loan on 2 years back for the amount of 8L which is sufficient with tenure period of 5 years. On that time rate of interest was lower when compared to other bank. The processing fee is less. The car model is TATA Nexon. I done the down payment of 2.8L. EMI need to pay of 17K. For pre closure is applicable with huge charge. So I didn't go for that option.
My car loan journey started with Axis bank which was availed directly.The vehicle name is Maruti Ertiga and this loan is still active .The rate of interest and the processing fee was nominal .This loan was sanctioned on time without anydelay .I am paying the premium on EMI basis and there is no delay charges .
Maruti showroom suggested to take car loan from HDFC on few months back. They have sanctioned the loan within one week.The amount got 6L with tenure period of 7 years. An interest rate of 9%. I done down payment of 1L. EMI need to pay of 9637 rupees. The car model is Maruti new swift. Their service is good.
I have availed car loan through YES bank directly.still this loan is active .The car model was Hyundai Creta and the rate of interest was quite nominal it was 9.60%and processing fee was very high. This loan was sanctioned on faster basis ,the loan process was clearly shared by the agent . I am paying the premium on EMI basis which will be done on time.
I have taken car loan directly through ICICI bank .The rate of interest and the processing fee are pretty nominal and the car name is Maruti Suzuki Swift. I am paying the premium on EMI basis and need to pay the amount of 10,000.The loan was sanctioned on time without any drawbacks.
My car loan is going to be completed in this November. My salary goes into HDFC bank hence the guy keep on calling me to take the loan hence I have selected the car loan from same bank. In 2013, I have purchased the car loan by paying the down payment of Rs. 3.5L. Took the loan amount of Rs. 3.8L. I pay EMI amount of Rs. 6948 every month.
I chosen car loan from ICICI on 4 years back. I bought this loan because one of my friends was working as a bank manager. I made the down payment of Rs. 2.5L and I bought the loan amount of Rs. 4.5L. I have no idea about the interest rate. I was paying EMI amount of Rs. 7,000 when I purchase the card and it keeps on in ascending order just because of my increment amount I can close at early.
My car loan was taken from Kotak Mahindra bank because an interest rate is less. I have taken the loan amount of Rs. 7L and I made the down payment of Rs. 5L. I have selected the duration of 5 years. I have been paying EMI amount of Rs. 14,000 per month. Documentation process was hassle free.
I have taken car loan through ICICI bank directly .The vehicle name is Hyundai Creta and this model was of 2018 this loan was a joint loan with my wife and still this loan is active ,premium on emi basis and there is no ppenalty for delay emi and the loan process was clearly shared by the agent .without any hassle got the loan .
I have purchased my car loan with HDFC bank which i have taken in the month of December. There is no interest rate on fast approval so that reason i have availed this loan. I have taken the loan amount of Rs. 12.34 lakhs and i made the down payment of Rs. 50000. They have sanctioned my loan in 1 day.
I have taken car loan directly through Bank Of India .The car model was 2018 and the name is Mahindra XUV and this loan is still active and paying the premium on EMI basis .The rate of interest and the processing fee was nominal .This was a joint loan with my father.
From INDUSIND Bank, i have taken a car loan and the loan amount was Rs. 4.50L and i made down payment Rs. 1.80L. Pre closure is there and the rate interest was normal , emi of Rs.9600 i am paying for the tenure of 5 years. Recently done a top up on this loan for personal use.
I got car loan offer from SBI which showroom suggested to apply. The rate of interest is 9.7% is fine. I taken this loan on 3.5 years back. The amount was sanctioned of 6L was sufficient with tenure period of 5 years. The car model Mahindra E2O. I have not any down payment. There are pre closure and part payment are applicable.