Used Car LoanInterest Rates
Lowest EMI per lakh for Max
Maximum Loan Amount
HDFC Bank Car Loan
₹ 2,275 for 5 years
SBI Car Loan
₹ 1,798 for 7 years
ICICI Bank Car Loan
₹ 2,149 for 5 years
₹ 2,485 for 5 years
₹ 2,184 for 5 years
Union Bank of India
₹ 2,217 for 5 years
Central Bank of India
₹ 2,122 for 5 years
₹ 2,217 for 5 years
₹ 2,182 for 5 years
Bank of India
₹ 3,175 for 3 years
Bank of Maharashtra
₹ 2,095 for 5 years
₹ 2,237 for 5 years
Bank of Baroda
₹ 3,248 for 3 years
₹ 3,269 for 3 years
Used Car loans is available for buy new car, a used car, an SUV or an MUV.SBI, ICICI, HDFC, Kotak, Bank of Baroda, Indian Bank, Bank of India and IndusInd Bank are among the many car loan options available.Car loan schemes of each bank different in terms of interest rates and other factors like maximum loan amount, loan tenure, EMI, processing fees and prepayment fees.EMI schemes available include 0 interest scheme, advance EMI scheme, reducing balance scheme, fixed rate scheme, floating rate scheme and zero interest schemes.So, compare the schemes as shown below and then select the one that suits you.
Used Car Loan Eligibility EMI
- Loan amount eligibility based on your income and the car or SUV or MUV model you are planning to buy?
- EMI amount and loan tenure per Rs. 1 lakh loan amount?
- Is the EMI payable in advance or at end of month?
- What are the processing charges payable?
- Can you make prepayment of the car loan? If yes, are there are charges and restrictions on when and how much you can pay?
You may be wondering why we haven’t listed car\ loan interest rate in the above list of questions regarding car loan? That’s
because many banks and car finance companies quote interest rates in a way so
as to make them look low when they are not. They may quote flat rates or
advance EMI rates.
Used Car Loan Queries
- Ex-showroom price is the price of the car including excise duty but excluding local duties and statutory charges.
- On road price is the price you pay for the car including the ex-showroom price and cost of registration, insurance, octroi, municipal entry tax, road tax and any accessories. The on road price tends to be 12-28% more than the ex-showroom price and may vary from city to city.
Caution – Note that a car loan of 85% of on road price is likely to be more than 95% of ex showroom price.
- EMI in arrears scheme –this is the standard method of paying EMI where the interest for a month (and principal repayment) is payable at or after the end of the month.
- Advance EMI scheme –you pay interest and EMI at the beginning of the month. So, each month, you pay interest on amount that you have already repaid to the bank at the beginning of the month.
Caution – In case your bank charges EMI in advance, the EMI amount should be about 1% lower than that in case of EMI in arrears. For those interested in more precise figures, EMI per Rs. one lakh loan amount on a 60 month car loan at 10% rate of interest as per EMI in arrears method comes to Rs. 2,125 while that as per EMI in advance method comes to Rs. 2,107.
Zero interest car loan scheme – This is one of those free lunches that actually doesn’t exist. So, beware of schemes that claim to offer zero interest. It is likely that the car company is offering a subvention scheme whereby the interest is paid by it to the bank upfront. Now, you could always ask the car dealer for the same amount as a cash discount. It’s like padding up the price of the car for the interest amount and marketing it under a nice name.
- Flat rate of interest car loan – In this method, you pay interest on the entire principal amount of car loan till maturity. So, on a Rs. four lakh car loan at 10% for 5 years, you would have to pay back a total of Rs. four lakhs plus interest of Rs. 40,000 a year, that is a sum total of Rs. 60,000. The EMI in this case would be Rs. 8,498.
- Reducing balance Used car loan schemein this method, you pay interest on the amount outstanding each month. With each EMI, the balance principal amount keeps reducing. So, on a Rs. four lakh loan at 10% for 5 years, you would have to pay back a total of Rs. four lakhs plus interest on reducing basis which comes to Rs. 1,9,928 or Rs. 5,9,928 including principal. The EMI in this case would be Rs. 8,498 a good 15% less than that for a flat rate scheme.
Caution – Never get fooled with the low rate of interest offered on a flat rate scheme. A flat rate of 10% is equal to an interest rate of 18.7% on reducing rate basis on a five year car loan.