Unlock the door to your next car with a hassle-free Used Car Loan.
In today's fast-paced world, owning a car is more of a necessity than a luxury. However, buying a brand-new car isn't always feasible, especially when you're on a budget. That's where a used car loan comes into play. With rising demand for pre-owned vehicles, financial institutions in India now offer attractive loan options to make buying a used car easier and more affordable than ever.
In this guide, we'll cover all aspects of a used car loan — from eligibility and documentation to interest rates and the application process — to help you make an informed financial decision.
A used car loan is a type of auto loan provided by banks, NBFCs (Non-Banking Financial Companies), and digital lenders to help individuals purchase pre-owned cars. Much like a new car loan, the borrowed amount is repaid in monthly installments (EMIs) over a fixed period, with interest.
With the rise in organized used car dealerships and certified pre-owned programs, buying a used car through financing has become increasingly safe and transparent.
Here are a few reasons why opting for a used car loan might be the smart move:
Eligibility criteria vary from lender to lender. However, the general requirements include:
| Criteria | Details |
|---|---|
| Age | 21–65 years |
| Employment Type | Salaried or self-employed |
| Minimum Monthly Income | ₹15,000 to ₹25,000 (varies by lender) |
| Credit Score | Preferably 700+ |
| Vehicle Age | Not older than 10 years |
Here is a list of commonly required documents when applying for a used car loan:
Interest rates for used car loans in India generally range between 9% to 16% per annum. The actual rate depends on multiple factors:
Here's a comparison of some popular lenders in India:
| Lender | Interest Rate (p.a.) | Processing Fee |
|---|---|---|
| HDFC Bank | 11.25% – 14.50% | Up to ₹5,000 |
| SBI (State Bank of India) | 11.15% onwards | ₹500 to ₹5,000 |
| ICICI Bank | 10.75% – 13.75% | Up to ₹4,999 |
| Axis Bank | 13.30% – 15.00% | 1% of loan amount |
| Kotak Mahindra Bank | 14% – 16% | 1% to 2% |
A used car loan EMI calculator helps you calculate your monthly EMI based on:
Formula:
EMI = [P x R x (1+R)^N] / [(1+R)^N – 1]
Where:
You can adjust the sliders on the calculator to try out different combinations and choose the best plan for your budget.
Thanks to digital platforms like Bankstore.in, applying for a used car loan has become quick and easy.
If you're wondering which is the best bank for used car loan in India, here are some top options:
Q1. Can I get a used car loan without income proof?
Some lenders offer loans based on alternative documentation, especially if you have a good credit history or a co-applicant.
Q2. What is the maximum tenure for a used car loan?
Most banks offer a tenure of up to 5 years.
Q3. Can I prepay or foreclose a used car loan?
Yes, but check if your lender charges a foreclosure fee.
Q4. Is a co-applicant mandatory?
Not mandatory, but having a co-applicant can boost your loan eligibility and improve approval chances.
A used car loan is a great way to own your dream vehicle without draining your savings. With competitive used car loan interest rates, easy eligibility, and minimal documentation, financing a second-hand car has never been more accessible.
Bankstore.in helps you compare offers from top banks and NBFCs so you can apply for used car loan online quickly and confidently. Use our used car loan EMI calculator to plan your budget and drive home your perfect car with ease.