Used Car Loan Interest Rate – Complete Guide & Best Deals

Key Insights 

1. Look at offers of used car loan interest rates from all banks before you decide. Start with PNB, which has rates from 8.65%, and SBI, starting at 8.70%. Use a calculator to compare these with HDFC, about 13.75%, or Axis, around 12.95%.
    
2. Work on your profile to qualify for better rates. Your income, credit score (SBI’s best rate needs 700 or higher), age, and your relationship with the bank all affect the interest rate you get.
    
3. Before you decide, check four key things: the car’s insurance, RC and taxes, service records, and overall condition. If you take these key actions, it will help protect both your loan and your investment.

Are you curious about what sets a used car loan apart? The main difference is the used car loan interest rate. Here’s a look at the used car loan interest rate all bank offer, which help you to choose the best deal for you. 

You can think of a used car loan interest rate as the 'mileage cost' for your loan. The higher the rate, the more money you spend each month. 

This rate is the percentage that banks charge when you borrow money for a pre-owned car. A used car loan interest rate calculator can help you figure out the total cost of your loan.

I used a used car loan interest rate calculator to compare offers. For a ₹5,00,000 loan over 5 years, HDFC’s 12% rate meant an EMI of ₹11,122. With SBI’s 11% rate, the EMI was ₹10,871, so I could save ₹251 each month.

Lowest Interest Rates for Used Car Loans

Get a better deal on your next car. Find out which lenders have the lowest interest rates for used car loans and save more money. Here is the list of the lowest car loan interest rates:
 

Check the tenure and interest rates offered by used car loan interest rate SBI, and top private banks, such as used car loan interest rate hdfc, to find the best deal and save money.

Bonus Tip: Do you know? Schedule your EMI payment right after you get your salary. Use what’s left to plan your other expenses. This way, you’ll pay your EMI on time and keep your budget organised.

Factors That Affect Used Car Loan Interest Rates in India

Find out what affects used car loan interest rates and how you can get the best possible rate.

Income: Earning a higher salary usually means you are more likely to repay your loan on time. People with higher incomes often get better lending rates from banks. Banks tend to prefer salaried employees because their income is steady, but self-employed professionals can sometimes have an advantage if they earn more overall.

Tenure: Loans with longer repayment periods usually have higher interest rates because they are riskier for the lender. Try to choose a loan term that helps you get the best possible interest rate.

Age: Your age is important when applying for a car loan. Younger borrowers have more time to repay their loans. Car loans are usually available to people over 21. Younger applicants often get lower loan amounts and better interest rates than older applicants.

Relationship with Bank: Banks often give special consideration to long-term customers because their credit history is easy to check. If you already have an account, the bank can review your account activity, recent credit or card use, and your overall finances. This can help you qualify for better interest rates on deposits.

Vehicle: The car itself is used as security for a car loan. If you miss your EMI payments, the bank or lender can take back the vehicle. When setting interest rates, banks look at the car’s model and age. New cars from well-known brands usually get lower interest rates, while used cars often have higher rates because they lose value over time.

You can get a lower rate by focusing on a few key factors: your income, loan term, age, relationship with the bank, the car you choose, and whether you have a co-applicant. Understanding these will help you get the best deal.

Important Information to Consider Before Applying for a Used Car Loan

Get a better deal on your car loan. Learn the five main things that affect your used car interest rate.

1. Car Insurance: Find out what type of insurance the car has. You can choose either third-party insurance or comprehensive insurance.
2. Registration Certificate: Make sure the registration certificate is valid. It should list the owner's name, chassis number, and engine number. Also, check the pollution certificate and road tax receipt.
3. Service Records: Look at the car’s service records. Note how many times it has been serviced and see if there were any major problems.
4. Condition: Check the car’s interior, exterior, frame, engine, tyres, and mileage. Always take the car for a test drive before buying.

Check the insurance, documents, history, and condition carefully. Taking the time to review these details helps protect both your purchase and your loan.

Conclusion

If you’re applying for a used car loan interest rate hdfc or used car loan interest rate SBI, try to compare all banks' interest rates to get the lowest interest rate you can and check the car carefully. Find out what can change your loan rate, and always look over the car’s documents and condition. Doing both will help you get a good loan and a reliable car.

FAQS

Is a car loan always bad? 

A car loan can be helpful or risky, depending on your situation. Whether it is a good choice depends on your finances, the interest rates, and how well you handle debt.

What used car loan interest rate did you get on your car, and what minimum down payment was required? 

Used car loan interest rates usually range from about 10% to 14% per year. The exact rate depends on the lender, your credit score, the car’s age, and the loan term. Most lenders require a down payment of 10-20%, but some may offer financing for 85-100% of the car’s value, depending on your profile. 

What is a good used car loan interest rate?  

In late 2025, a good interest rate for a used car loan is usually between 10% and 15%. The exact rate depends on factors like your credit score, the car’s age, the lender, and the market. If you have excellent credit, you might see rates closer to 9% or 10%, while others may pay more. Used car loans tend to have higher rates than new car loans because they are considered riskier.

Does the interest rate for a used car loan differ from that of a new car loan? 

Yes, interest rates for used car loans are usually higher than for new cars. Lenders consider used cars riskier because they lose value faster, may have hidden maintenance problems, and are worth less if resold.

Do I have to provide collateral or security when I avail a used car loan?

No, you do not need to provide any collateral or security for a used car loan. The car itself serves as the security.
 

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About the Author

LoansJagat Team

‘Simplify Finance for Everyone.’ This is the common goal of our team, as we try to explain any topic with relatable examples. From personal to business finance, managing EMIs to becoming debt-free, we do extensive research on each and every parameter, so you don’t have to. Scroll up and have a look at what 15+ years of experience in the BFSI sector looks like.