Used Car Loan with Eligibility Criteria

When it comes to used car market Indian Used Car market valued at USD 24.24 billion in 2019, and it is expected to register a CAGR of 15.12% during the forecast period (2020-2025). Used car market share is far more than new car market. A used car can also be bought on loan similar to new car but for that eligibility criteria is different as compared to new car.

Eligibility Criteria for Used Car loan

Eligibility criteria depends upon whether you are a salaried person or self-employed.

Salaried EmployeesSelf-Employed Individuals
Age21-65 years25-65 years
IncomeAt least Rs.15,000 per month SalaryProfit of minimum 1.5 L per year
Income StatusCurrent organization tenure must be min 1 Year.Must be in the same line of business for at least 3 years

Documents Required for Used Car Loan

Salaried Individuals:

For age and identity proof you have to share any one of the documents listed below :-

  • Aadhar Card
  • Passport
  • PAN Card (
  • Voters ID Card
  • Photo Driving License with DOB (recent, legible, laminated)
  • Photo Ration Card with DOB
  • Employer Certificate/ID
  • School/College Leaving Certificate

For Income proof you have to share all the following documents:-

  • Latest Salary Slip
  • Latest Form 16/Latest ITR
  • Bank corporate salary account statement for salary credits above Rs. 80,000 for the previous 3 months

for Address proof you can share any of the documents below :-

  • Photo Ration Card with DOB
  • Photo Driving License with DOB (recent, legible, laminated)
  • Passport Copy
  • Telephone Bill
  • Electricity Bill
  • Credit Card Statement with Credit Card Copy
  • Employer Certificate/ID

Self Employed Individuals (Sole Proprietorship):

For age and identity proof you have to share any one of the documents listed below :-

  • Aadhar Card
  • Passport
  • PAN Card (
  • Voters ID Card
  • Photo Driving License with DOB (recent, legible, laminated)
  • Photo Ration Card with DOB
  • Employer Certificate/ID
  • School/College Leaving Certificate

For Income proof you have to share latest ITR / previous ITR with Adv. Tax paid Challan / latest IT assessment order as proof of income

Self Employed Individuals (Private/Public Limited Companies)

Memorandum and Articles of Association/Certificate of Incorporation as age proof, Identity proof and latest ITR and audit balance sheet with profit and loss account proof is required.

Any of the following documents as address proof:

  • Memorandum and Articles of Association
  • Certification of Incorporation
  • Telephone Bill
  • Electricity Bill

Any of the following as sign verification proof:

  • Passport Copy
  • Photo Driving License with DOB (recent, legible, laminated)
  • Credit Card Statement with Credit Card Copy
  • Banker’s Verification
  • Copy of Margin Money Paid to the Bank

List Of Banks Providing Used Car Loan

HDFC Bank Used Car Loan

HDFC Bank used car loan interest rates starts from 13.75%, its a fixed rate loans and rate of interest vary by borrower occupation, loan amount and loan tenure.

BankHDFC Bank Car Loan
Car Loan Interest Rates13.75% Fixed
Lowest EMI per lakh for Max Tenure₹ 1,860 for 7 years
Maximum Loan Amount100% of market value
Processing Fee2.00% Min Rs. 5,000
Loan TenureUpto 7 years
Lowest EMI₹ 1,622 per lakh
Loan AmountUpto 100% of market value
Prepayment ChargesNot allowed for 6 months; 6% fee from 7-12 months, 5% from 13-24 months, 3% after 24 months

SBI Used Car Loan

SBI used car loan interest rates starts from 9.75% its a floating rate loans and rate of interest vary by borrower occupation, loan amount and loan tenure.

BankSBI Car Loan
Car Loan Interest Rates9.75% Floating
Lowest EMI per lakh for Max Tenure₹ 2,112 for 5 years
Maximum Loan Amount85% of on-road price
Processing Fee0.51%
Loan TenureUpto 5 years
Lowest EMI₹ 2,028 per lakh
Loan AmountUpto 85% of on-road price
Prepayment Charges2%

ICICI Bank Used Car Loan

ICICI Bank used car loan interest rates starts from 14.25%, its a fixed rate loans and rate of interest vary by borrower occupation, loan amount and loan tenure.

BankICICI Bank Car Loan
Car Loan Interest Rates14.25% Fixed
Lowest EMI per lakh for Max Tenure₹ 2,340 for 5 years
Maximum Loan Amount80% of market value
Processing Fee2.00% Min Rs. 2,500 Max Rs. 6,000
Loan TenureUpto 5 years
Lowest EMI₹ 2,090 per lakh
Loan AmountUpto 80% of market value
Prepayment Charges5%

Kotak Bank Used Car Loan

Kotak Bank used car loan interest rates starts from 17.00%, its a fixed rate loans and rate of interest vary by borrower occupation, loan amount and loan tenure.

BankKotak Bank
Car Loan Interest Rates17.00% Fixed
Lowest EMI per lakh for Max Tenure₹ 2,485 for 5 years
Maximum Loan Amount90% of market value
Loan TenureUpto 5 years
Lowest EMI₹ 2,199 per lakh
Loan AmountUpto 90% of market value
Prepayment ChargesNot allowed for 6 months; 5.21% charges after 6 months

PNB Used Car Loan

PNB used car loan interest rates starts from 11.20%, its a floating rate loans and rate of interest vary by borrower occupation, loan amount and loan tenure

BankPNB
Car Loan Interest Rates11.20% Floating
Lowest EMI per lakh for Max Tenure₹ 2,184 for 5 years
Maximum Loan Amount70% of market value
Processing Fee1.00% Max Rs. 6,000
Loan TenureUpto 5 years
Lowest EMI₹ 2,064 per lakh
Loan AmountUpto 70% of market value
Prepayment ChargesNil

Union Bank of India Used Car Loan

Union Bank Used Car Loan interest rates starts from 11.60%, its a floating rate loans and rate of interest vary by borrower occupation, loan amount and loan tenure

BankUnion Bank of India
Car Loan Interest Rates11.60% Floating
Lowest EMI per lakh for Max Tenure₹ 2,204 for 5 years
Maximum Loan Amount50% of market value
Loan TenureUpto 5 years
Lowest EMI₹ 2,056 per lakh
Loan AmountUpto 50% of market value
Prepayment ChargesNil from own sources; 2% in case of loan takeover

Central Bank of India Used Car Loan

Central Bank of India Used Car Loan interest rates starts from 9.95%, its a floating rate loans and rate of interest vary by borrower occupation, loan amount and loan tenure

BankCentral Bank of India
Car Loan Interest Rates9.95% Floating
Lowest EMI per lakh for Max Tenure₹ 2,122 for 5 years
Maximum Loan Amount75% of market value
Processing Fee0.50% Min Rs. 2,000 Max Rs. 20,000
Loan TenureUpto 5 years
Lowest EMI₹ 2,076 per lakh
Loan AmountUpto 75% of market value
Prepayment ChargesNil from own sources; 1% in case of loan takeover

Andhra Bank Used Car Loan

Andhra Bank Used Car Loan interest rates starts from 11.85%, its a fixed rate loans and rate of interest vary by borrower occupation, loan amount and loan tenure

BankAndhra Bank
Car Loan Interest Rates11.85% Fixed
Lowest EMI per lakh for Max Tenure₹ 2,217 for 5 years
Maximum Loan Amount60% of market value
Loan TenureUpto 5 years
Lowest EMI₹ 2,095 per lakh
Loan AmountUpto 60% of market value
Prepayment Charges1%

Federal Bank Used Car Loan

Federal Bank Used Car Loan interest rates starts from 11.15%, its a fixed rate loans and rate of interest vary by borrower occupation, loan amount and loan tenure

BankFederal Bank
Car Loan Interest Rates11.15% Fixed
Lowest EMI per lakh for Max Tenure₹ 2,182 for 5 years
Maximum Loan Amount75% of depreciated value
Loan TenureUpto 5 years
Lowest EMI₹ 2,083 per lakh
Loan AmountUpto 75% of depreciated value
Prepayment Charges2%

Bank of India Used Car Loan

Bank of India Used Car Loan interest rates starts from 8.90%, its a floating rate loans and rate of interest vary by borrower occupation, loan amount and loan tenure

BankBank of India
Car Loan Interest Rates8.90% Floating
Lowest EMI per lakh for Max Tenure₹ 3,175 for 3 years
Maximum Loan Amount70% of market value
Processing Fee1.00% Min Rs. 500 Max Rs. 10,000
Loan TenureUpto 3 years
Lowest EMI₹ 3,203 per lakh
Loan AmountUpto 70% of market value
Prepayment ChargesNil

Bank of Maharashtra Used Car Loan

Bank of Maharashtra Used Car Loan interest rates starts from 9.40%, its a floating rate loans and rate of interest vary by borrower occupation, loan amount and loan tenure

BankBank of Maharashtra
Car Loan Interest Rates9.40% Floating
Lowest EMI per lakh for Max Tenure₹ 2,095 for 5 years
Maximum Loan Amount50% of market value
Processing Fee0.25% Min Rs. 500
Loan TenureUpto 5 years
Lowest EMI₹ 2,088 per lakh
Loan AmountUpto 50% of market value
Prepayment ChargesNot Available

Indian Bank Used Car Loan

Indian Bank Used Car Loan interest rates starts from 12.25%, its a floating rate loans and rate of interest vary by borrower occupation, loan amount and loan tenure

BankIndian Bank
Car Loan Interest Rates12.25% Floating
Lowest EMI per lakh for Max Tenure₹ 2,237 for 5 years
Maximum Loan Amount60% of market value
Processing Fee0.22% Max Rs. 10,000
Loan TenureUpto 5 years
Lowest EMI₹ 2,108 per lakh
Loan AmountUpto 60% of market value
Prepayment ChargesNot allowed

OBC Used Car Loan

OBC has merged into Punjab National Bank on April 1, 2020. The interest rates of Punjab National Bank will now be applicable on OBC Car Loan.

Bank of Baroda Used Car Loan

Bank of Baroda Used Car Loan interest rates starts from 10.45%, its a floating rate loans and rate of interest vary by borrower occupation, loan amount and loan tenure

BankBank of Baroda
Car Loan Interest Rates10.45% Floating
Lowest EMI per lakh for Max Tenure₹ 3,248 for 3 years
Maximum Loan Amount80%
Processing Fee0.75% Max Rs. 10,000
Loan TenureUpto 3 years
Lowest EMI₹ 3,175 per lakh
Loan AmountUpto 80%
Prepayment ChargesNil

How to Apply for a Used Car Loan ?

Offline Procedure

  • Visit any of the branch listed above in your city
  • Fill the application form.
  • Submit all the list of documents that are mentioned above and also if any specific documents requested to check the eligibility.
  • Discuss the rate of interest with processing processing fee, etc with the bank representative and proceed.

Online Procedure

  • For online procedure visit any of the bank site providing Used Car Loan.
  • Click on Apply Online Loan for Used Car or Pre-Owned Car and follow the procedure.

Frequently Asked Questions on Used Car Loans

Does a guarantor required for the used car loans?

It varies with the bank but in most cases its not required but if the person’s income is not meeting the minimum eligible criterion, the bank may ask for the guarantor.

Is interest on car loan tax-exempted?

No, interest on used car financing is not tax free

Can the EMI on my Used Car Loan be reduced or changed?

No, the EMI is fixed for the life of the loan. However, banks offer flexible solutions to fit your requirement.

Can I get 100% car loan?

No. there is a certain amount that you have to pay initially which vary bank to bank.

Can I avail a used car loan if I have a low credit score?

Well in this case most of the application forms gets rejected but yes there are some cases loan is given at a high interest rate.

Will there be any foreclosure charges?

Yes, Many bank charge a penalty in case of foreclosure.

How long will it take for loan approval?

Once you have submitted all your documents, it generally takes about min 30 Minutes to a week depend upon the bank to approve your loan request.

Will my car insurance and registration charges be included in the Used Car Loan?

Yes, registration is included in a few loan offerings, but insurance of the vehicle is not form part of this value and it need to be paid up-front.