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.
Table of Contents
Eligibility Criteria for Used Car loan
Eligibility criteria depends upon whether you are a salaried person or self-employed.
| Salaried Employees | Self-Employed Individuals | |
| Age | 21-65 years | 25-65 years |
| Income | At least Rs.15,000 per month Salary | Profit of minimum 1.5 L per year |
| Income Status | Current 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.
| Bank | HDFC Bank Car Loan |
| Car Loan Interest Rates | 13.75% Fixed |
| Lowest EMI per lakh for Max Tenure | ₹ 1,860 for 7 years |
| Maximum Loan Amount | 100% of market value |
| Processing Fee | 2.00% Min Rs. 5,000 |
| Loan Tenure | Upto 7 years |
| Lowest EMI | ₹ 1,622 per lakh |
| Loan Amount | Upto 100% of market value |
| Prepayment Charges | Not 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.
| Bank | SBI Car Loan |
| Car Loan Interest Rates | 9.75% Floating |
| Lowest EMI per lakh for Max Tenure | ₹ 2,112 for 5 years |
| Maximum Loan Amount | 85% of on-road price |
| Processing Fee | 0.51% |
| Loan Tenure | Upto 5 years |
| Lowest EMI | ₹ 2,028 per lakh |
| Loan Amount | Upto 85% of on-road price |
| Prepayment Charges | 2% |
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.
| Bank | ICICI Bank Car Loan |
| Car Loan Interest Rates | 14.25% Fixed |
| Lowest EMI per lakh for Max Tenure | ₹ 2,340 for 5 years |
| Maximum Loan Amount | 80% of market value |
| Processing Fee | 2.00% Min Rs. 2,500 Max Rs. 6,000 |
| Loan Tenure | Upto 5 years |
| Lowest EMI | ₹ 2,090 per lakh |
| Loan Amount | Upto 80% of market value |
| Prepayment Charges | 5% |
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.
| Bank | Kotak Bank |
| Car Loan Interest Rates | 17.00% Fixed |
| Lowest EMI per lakh for Max Tenure | ₹ 2,485 for 5 years |
| Maximum Loan Amount | 90% of market value |
| Loan Tenure | Upto 5 years |
| Lowest EMI | ₹ 2,199 per lakh |
| Loan Amount | Upto 90% of market value |
| Prepayment Charges | Not 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
| Bank | PNB |
| Car Loan Interest Rates | 11.20% Floating |
| Lowest EMI per lakh for Max Tenure | ₹ 2,184 for 5 years |
| Maximum Loan Amount | 70% of market value |
| Processing Fee | 1.00% Max Rs. 6,000 |
| Loan Tenure | Upto 5 years |
| Lowest EMI | ₹ 2,064 per lakh |
| Loan Amount | Upto 70% of market value |
| Prepayment Charges | Nil |
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
| Bank | Union Bank of India |
| Car Loan Interest Rates | 11.60% Floating |
| Lowest EMI per lakh for Max Tenure | ₹ 2,204 for 5 years |
| Maximum Loan Amount | 50% of market value |
| Loan Tenure | Upto 5 years |
| Lowest EMI | ₹ 2,056 per lakh |
| Loan Amount | Upto 50% of market value |
| Prepayment Charges | Nil 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
| Bank | Central Bank of India |
| Car Loan Interest Rates | 9.95% Floating |
| Lowest EMI per lakh for Max Tenure | ₹ 2,122 for 5 years |
| Maximum Loan Amount | 75% of market value |
| Processing Fee | 0.50% Min Rs. 2,000 Max Rs. 20,000 |
| Loan Tenure | Upto 5 years |
| Lowest EMI | ₹ 2,076 per lakh |
| Loan Amount | Upto 75% of market value |
| Prepayment Charges | Nil 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
| Bank | Andhra Bank |
| Car Loan Interest Rates | 11.85% Fixed |
| Lowest EMI per lakh for Max Tenure | ₹ 2,217 for 5 years |
| Maximum Loan Amount | 60% of market value |
| Loan Tenure | Upto 5 years |
| Lowest EMI | ₹ 2,095 per lakh |
| Loan Amount | Upto 60% of market value |
| Prepayment Charges | 1% |
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
| Bank | Federal Bank |
| Car Loan Interest Rates | 11.15% Fixed |
| Lowest EMI per lakh for Max Tenure | ₹ 2,182 for 5 years |
| Maximum Loan Amount | 75% of depreciated value |
| Loan Tenure | Upto 5 years |
| Lowest EMI | ₹ 2,083 per lakh |
| Loan Amount | Upto 75% of depreciated value |
| Prepayment Charges | 2% |
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
| Bank | Bank of India |
| Car Loan Interest Rates | 8.90% Floating |
| Lowest EMI per lakh for Max Tenure | ₹ 3,175 for 3 years |
| Maximum Loan Amount | 70% of market value |
| Processing Fee | 1.00% Min Rs. 500 Max Rs. 10,000 |
| Loan Tenure | Upto 3 years |
| Lowest EMI | ₹ 3,203 per lakh |
| Loan Amount | Upto 70% of market value |
| Prepayment Charges | Nil |
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
| Bank | Bank of Maharashtra |
| Car Loan Interest Rates | 9.40% Floating |
| Lowest EMI per lakh for Max Tenure | ₹ 2,095 for 5 years |
| Maximum Loan Amount | 50% of market value |
| Processing Fee | 0.25% Min Rs. 500 |
| Loan Tenure | Upto 5 years |
| Lowest EMI | ₹ 2,088 per lakh |
| Loan Amount | Upto 50% of market value |
| Prepayment Charges | Not 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
| Bank | Indian Bank |
| Car Loan Interest Rates | 12.25% Floating |
| Lowest EMI per lakh for Max Tenure | ₹ 2,237 for 5 years |
| Maximum Loan Amount | 60% of market value |
| Processing Fee | 0.22% Max Rs. 10,000 |
| Loan Tenure | Upto 5 years |
| Lowest EMI | ₹ 2,108 per lakh |
| Loan Amount | Upto 60% of market value |
| Prepayment Charges | Not 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
| Bank | Bank of Baroda |
| Car Loan Interest Rates | 10.45% Floating |
| Lowest EMI per lakh for Max Tenure | ₹ 3,248 for 3 years |
| Maximum Loan Amount | 80% |
| Processing Fee | 0.75% Max Rs. 10,000 |
| Loan Tenure | Upto 3 years |
| Lowest EMI | ₹ 3,175 per lakh |
| Loan Amount | Upto 80% |
| Prepayment Charges | Nil |
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
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.
No, interest on used car financing is not tax free
No, the EMI is fixed for the life of the loan. However, banks offer flexible solutions to fit your requirement.
No. there is a certain amount that you have to pay initially which vary bank to bank.
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.
Yes, Many bank charge a penalty in case of foreclosure.
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.
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.