• Used Car Loan

    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.
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    Top Lenders Offering Pre-Owned Car Loans

    Lender Interest Rate Repayment Tenure
    ICICI Bank 10.20% - 17.51% 5 years
    State Bank of India 9.90% - 10.90% (CIC based rates will be applicable) 5 years
    Tata Capital Starts from 15% 5 years
    HDFC Bank 13.75% - 16.00% (Rack Interest) 7 years
    Punjab National Bank Starts from 7.80% 5 years
    Bajaj FinServ Contact the bank 5 years
    Axis Bank 14.80% - 16.80% 5 years
    Kotak Mahindra Bank Contact the bank 5 years
    Mahindra Finance Contact the bank 5 years
    Used car loan
    Used Car Loan

    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.

    Eligibility Criteria

    The eligibility criteria that must be met for salaried employees and self-employed individuals will vary and are mentioned below:

    Salaried Employees

    • 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

    Self-employed Individuals

    • 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

    Documents Required

    The list of documents that must be submitted when applying for a used car loan is mentioned below:

    • Application form
    • Passport-size photographs
    • Car valuation report
    • Identity Proof: Any of the below-mentioned documents can be submitted as proof of identity:
      • Aadhaar Card
      • Passport
      • Driving License
      • Voter’s ID
      • PAN Card
    • Address Proof: Any of the below-mentioned documents can be submitted as proof of address:
      • Voter’s ID
      • LIC Policy
      • Electricity Bill
      • Aadhaar Card
      • Driving License
      • Ration Card
      • Passport
    • Income Proof: The below-mentioned documents must be submitted as proof of income:
      • Profit and loss account
      • Balance sheet
      • Audit sheet
      • Form 16
      • Salary slip
      • Bank statements

    How to Apply for a Used Car Loan

    Offline

    • 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.

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    Used Car Loan Reviews

    • Axis Bank Car Loan
      "Average"
      0.5 4.0/5 "Great!"
      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.
      Was this review helpful? 39
      , kolkata
      Reviewed on Mar 21, 2020
    • Kotak
      Kotak Car Loan
      "Good "
      0.5 4.0/5 "Great!"
      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.
      Was this review helpful? 28
      , tirupur
      Reviewed on Mar 20, 2020
    • HDFC Bank Car Loan
      "Good service"
      0.5 4.5/5 "Excellent!"
      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 .
      Was this review helpful? 34
      , chennai
      Reviewed on Mar 19, 2020
    • HDFC Bank Car Loan
      "Easy loan approval"
      0.5 4.5/5 "Excellent!"
      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.
      Was this review helpful? 25
      , jaipur
      Reviewed on Mar 18, 2020
    • review Car Loan
      "Best Service"
      0.5 4.0/5 "Great!"
      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.
      Was this review helpful? 21
      , jaipur
      Reviewed on Mar 16, 2020
    • Tamilnad Mercantile Bank Car Loan
      "Average Service"
      0.5 2.0/5 "Expected more"
      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.
      Was this review helpful? 15
      , surat
      Reviewed on Mar 15, 2020
    • ICICI Bank Car Loan
      "Good"
      0.5 5.0/5 "Blown Away!"
      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.
      Was this review helpful? 22
      , chennai
      Reviewed on Mar 15, 2020
    • ICICI Bank Car Loan
      "Need to be zero for pre closure charge "
      0.5 3.0/5 "Satisfactory"
      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.
      Was this review helpful? 19
      , hyderabad
      Reviewed on Mar 11, 2020
    • Axis Bank Car Loan
      "Excellent service "
      0.5 5.0/5 "Blown Away!"
      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 .
      Was this review helpful? 31
      , bangalore
      Reviewed on Mar 10, 2020
    • HDFC Bank Car Loan
      "Quick process"
      0.5 5.0/5 "Blown Away!"
      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.
      Was this review helpful? 36
      , kanchipuram
      Reviewed on Mar 09, 2020
    • YES Bank Car Loan
      "Good Service"
      0.5 3.0/5 "Satisfactory"
      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.
      Was this review helpful? 22
      , agra
      Reviewed on Mar 06, 2020
    • ICICI Bank Car Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      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.
      Was this review helpful? 22
      , bangalore
      Reviewed on Mar 05, 2020
    • HDFC Bank Car Loan
      "Good Loan Service"
      0.5 4.0/5 "Great!"
      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.
      Was this review helpful? 31
      , jammu
      Reviewed on Mar 05, 2020
    • ICICI Bank Car Loan
      "Good Loan Service"
      0.5 5.0/5 "Blown Away!"
      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.
      Was this review helpful? 21
      , rajkot
      Reviewed on Mar 05, 2020
    • Kotak Car Loan
      "Less interest rate loan"
      0.5 5.0/5 "Blown Away!"
      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.
      Was this review helpful? 34
      , bangalore
      Reviewed on Mar 05, 2020
    • ICICI Bank Car Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      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 .
      Was this review helpful? 27
      , ahmedabad
      Reviewed on Mar 05, 2020
    • HDFC Bank Car Loan
      "Fast approval loan"
      0.5 5.0/5 "Blown Away!"
      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.
      Was this review helpful? 48
      , vadodara
      Reviewed on Mar 05, 2020
    • Bank of India Car Loan
      "Good Service"
      0.5 4.0/5 "Great!"
      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.
      Was this review helpful? 26
      , indore
      Reviewed on Mar 04, 2020
    • IndusInd Bank Car Loan
      "Best service "
      0.5 5.0/5 "Blown Away!"
      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.
      Was this review helpful? 40
      , tirunelveli
      Reviewed on Mar 04, 2020
    • SBI Car Loan
      "Good loan offer"
      0.5 5.0/5 "Blown Away!"
      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.
      Was this review helpful? 73
      , bangalore
      Reviewed on Mar 04, 2020
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