Buying a car is always exciting. However, financially it is a daunting task that requires proper research and planning. When you decide to buy a car, you not only look for a top-end model with maximum features but also want a car that fits your budget. Besides, some may also find even the cheaper or mid-range new cars bypassing their budget.
The perfect solution in such a case could be going for a used car that fulfils your aspiration without straining your finances. Used car sales have amplified in India, especially after the current Covid-19 pandemic as many prefer to have private modes of transportation over public transports.
Moreover, with many lenders offering attractive deals and competitive interest rates, buying a used car has become convenient and simple. That being said, you should always remember to compare various loan offerings to bag the best deal for yourself. Do remember that each lender has different eligibility criteria for a used car loan. So, before applying for a used car loan, do check if you meet the lender’s requirements, according to BankBazaar.
For example, some lenders give loans only for cars less than three-year old while others may give a loan for cars less than 5-year old. Additionally, you must zero in the type of car you want to buy as the cost of the loan and its maintenance would have a bearing on your finances. Your approved loan would be up to 75%-85% of the value of the car and the rest of the amount will be paid as a down payment by you.
The interest rate influences your equated monthly instalments (EMIs). For a used car loan, interest rates range between 11% and 16% and the repayment tenure is up to 7 years. Besides this, you will shell out some amount as processing fees. Generally, interest rates of used car loans are higher than new car loans, so you may want to go for a shorter tenure. Therefore, before you go for a used car loan, ensure that you have clarity about crucial factors, including eligibility, loan amount, interest rate, processing fees etc, as per BankBazaar.
If you are planning to take a used car loan, the table below provides a list of the current interest rates on used car loans being offered by 20 leading banks in the country. The table also provides indicative EMIs for Rs 5-lakh used car loans taken for a tenure of 3 years.
Do note we have only considered the lowest advertised rate for loans up to Rs 5 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 5-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 Sept 7, 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 5 lakh and tenure up to 3 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 5 lakh loan with 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 T&Cs. *According to HDFC Bank’s rack interest rate.
Data compiled by BankBazaar.com, an online marketplace for loans, credit cards and more.