Mostly, when people think about driving a four-wheeler, they think about buying a used or second-hand car. And if the buyer is a beginner commuter, then a used car is the best possible option for them. Driving a car is associated with several risks like potential dents, scratches, hits, etc., that can lead to enormous bills to pay for your new wheels. Also, buying a second-hand car is comparatively less risky than driving a new vehicle while obtaining a license.
Buying a pre-owned car is not a complicated process anymore. You can buy it through direct cash payment or seek financing assistance. Many finance companies in India offer used-car loans to buyers at competitive interest rates. So, buying a pre-owned automobile with a loan from a well-known lender at low used car finance rateswould be most beneficial for a learner.
Used Car Loan: A Brief Sketch
The used or second-hand car loan is commonly the money or mortgages that private sources or an authorised lender provides to the purchaser to buy a used or pre-owned car. The loan amount usually covers 75% of the total value of the vehicle. Additionally, some finance companies also offer up to 90% rate upon the car value.
Used Car Finance Rates of Major Banks & Finance Companies (Government & Non-Government):
|Name of the Lender||Interest Rates||Max Repayment Tenure|
|HDFC||13.75% – 16% (Rack Interest)||7 Years|
|ICICI Bank||12% – 14.4%||5 Years|
|Axis Bank||14.25% – 16.25%||5 Years|
|Kotak Mahindra Bank||Contact the branch||5 Years|
|Canara Bank||7.3% – 9.9%||5 Years|
|Bank Of India (BOI)||7.45% – 8.55%||3 Years|
|Federal Bank||13.8%||5 Years|
|State Bank Of India (SBI)||9.50% – 10.5% (CIC based rates will be applicable)||5 Years|
|Union Bank Of India (UBI)||8.90% – 10.5%||5 Years|
|South Indian Bank||9.5% – 10.5%||5 Years|
|Punjab National Bank||8.3% (lowest)||5 Years|
|Tata Capital||Starts from 15%||5 Years|
|Mahindra Finance||Contact the branch||5 Years|
|Bajaj FinServ||Contact the branch||5 Years|
|Kotak Mahindra Bank||9.25% – 9.65%||3 Years|
How Can You Arrange a Second-Hand Car Loan in India?
While you think about owning a pre-owned car, there are several important factors that you should consider. The type of loan and basic requirements for the loan are main factors. Here are a few steps mentioned below that you can follow to arrange a loan for your second-hand car.
- Several financial institutions verify the car model type and age before approving the loan. So, it’ll be beneficial if you choose a comparatively new car model.
- You have to calculate the total value of your car to settle the deal. After that, you can calculate the total loan amount you are required to pay.
- You must decide the monthly instalment and tenure, and establish your loan requirement based on your income.
- Several financial institutions like SBI, BOI, HDFC, Bajaj FinServ, Tata Capital, etc., offer used-car loans. You can select the interest rate from the table above or contact the nearest branch and decide the institution that suits your requirements best.
The government financial institutions offer much lower used car finance rates compared to private banks. And if you’re already their previous customer, you can avail exciting offers and opportunities that the financing institutions give.
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