Buying a car is an extremely significant financial step for most of us. But it is a big-ticket purchase that needs proper planning, especially in these times of heightened uncertainties. One of the most popular ways to cut car-buying costs is to go for a pre-owned car instead of a brand new one. This could ensure you get the vehicle and model of your choice at a lower price. To make things easier, you can also avail of a used car loan which is offered by most lenders in the country.
So, if you’re planning to take a used car loan, make sure to compare all the loan offers to find the one with the best repayment terms. Check for things like maximum loan amount and tenure, applicable interest rate, processing fee and pre-closure charges, EMI amount, eligibility requirements, documentation requirements, etc.
Do note, used car loan interest rates could be slightly higher than new car loan rates in some cases. Also, the associated terms and conditions could be slightly different. For example, some lenders might offer these loans only on cars that are less than three-year old or with a maximum tenure of 5 years. Plus, many lenders would finance only up to 60% of the pre-owned car’s value and the remaining amount needs to be borne out of pocket. You’ll be well-advised to get complete clarity on these factors before finalising your decision, according to BankBazaar.
You might also want to check whether you’re eligible for any pre-approved bank offers or whether there are any concessions to be enjoyed on your used car loan if you’re already servicing a home loan with a particular lender.
To help you make informed decisions, here’s a list of the current interest rates on used car loans being offered by 20 leading banks in the country. We’ve also provided indicative EMIs for Rs 10 lakh used car loan taken for a tenure of 5 years for each of the banks mentioned in the table below.
Do note we have only considered the lowest advertised rate for loans up to Rs 10 lakh for each bank, have not included the processing fee or any other charges in our indicative EMI calculations and the interest rate applicable to you could be higher based on your loan amount, credit score or any terms and conditions of your chosen lender.
Interest Rates and Indicative EMIs for Rs 10 lakh Used Car Loans (5-year Tenure)
Disclaimer: Interest rates on used car loans for all listed (BSE) public and private banks have been considered for data compilation. Banks for which data is not available on their website have not been considered. Data collected from respective bank’s websites on June 8, 2021. Banks are listed in ascending order on the basis of lowest advertised interest rate on used car loans. The lowest advertised interest rate offered by the banks on used car loans of up to Rs.10 lakh and tenure up to 5 years have been shown in the table. The indicative EMIs have been calculated on the basis of the lowest interest rate mentioned in the table for Rs.10 lakh loan with tenure of 5 years (processing fee and other charges are assumed to be zero for EMI calculation). All interest rates mentioned in the table are indicative and may vary depending on the bank’s T&Cs. *According to HDFC Bank’s rack interest rate.
Data compiled by BankBazaar.com, an online marketplace for loans, credit cards and more.