The used car market is fast growing in India, especially when people are preferring private vehicles over public transport to avoid health risks due to the Covid-19 pandemic.
Festivals of Dussehra and Diwali bring in an auspicious period when people prefer a new purchase or investment. This is also a time when most companies — especially real estate and auto players — come up with discounts and offers to attract customers. Talking about the auto companies, many used-car dealers have come up with festive offers on pre-owned cars to fit the customer’s budget.
If you have been planning to buy a new car this festive season but find the price unaffordable, you may opt for a used car. The used car market is fast growing in India, especially when people are preferring private vehicles over public transport to avoid health risks due to the Covid-19 pandemic.
Buying a used car or second-hand car makes owning a four-wheeler convenient and affordable. But before you plan to buy a used car, ensure you have a budget in mind and you know how you are going to finance it. There are many banks and housing finance companies that offer loans for used cars.
Having said that, you must keep in mind that interest rates for a used car loan are higher than a new car loan. When you decide to go for a used car loan, do compare the loan offerings by different lenders to get the best deal for yourself. The loan tenure for such a loan would depend on the age of the car. Most banks may not lend for a car purchase which is older than 8-10 years. For instance, some banks may provide fund only for cars less than three-year old while others may lend for cars less than 5-year old. Lenders usually approve loans up to 75%-85% of the value of the car and the rest of the amount is paid by the borrower as a down payment, according to BankBazaar.
Additionally, also check other charges you will have to shell out for availing of a used car loan such as processing fees etc. Each lender has different eligibility criteria for loan sanctioning. So, make sure you give a good amount of thought to these crucial factors.
If you want to take a used car loan, the table below gives a list of the current interest rates on used car loans being offered by 19 leading banks in the country. The table also provides indicative EMIs for Rs 7-lakh used car loans taken for a tenure of 3 years.
Do note we have only considered the lowest-advertised rates 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 7-Lakh Used Car Loans (3-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 Oct 19, 2021. Banks are listed in ascending order based on the lowest advertised interest rate on used car loans. The lowest advertised interest rates offered by the banks are shown in the table (irrespective of the loan amount). The indicative EMIs have been calculated based on the lowest interest rate mentioned in the table for Rs. 7 lakh loan with a tenure of 3 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 terms and conditions. *According to HDFC Bank’s rack interest rate.
Data compiled by BankBazaar.com, an online marketplace for loans, credit cards and more.