Often people think they can only get a loan to buy a new car, but that’s not true. Almost all banks offer loans to buy a used car if you meet the eligibility criteria.

Are you running out of money to buy a used car? Do not worry. You can quickly get a used or used car loan from public and private banks. Often people think they can only get a loan to buy a new car, but that’s not true. Almost all banks offer loans to buy a used car if you meet the eligibility criteria.

Salaried and self-employed individuals can apply for used car loans, but eligibility criteria may differ. The car’s valuation and your credit score, along with your income, are taken into consideration before banks accept your loan application.

Used car loans are disbursed instantly without hassle if you meet the eligibility criteria to apply for the loan. Most banks offer up to 95% loan on the total value of the car. However, some banks may even pay out 100% of the value of your vehicle if your credit score, income, and car condition meet the bank’s eligibility criteria. However, some banks may refuse to disburse loans for cars older than three years. So you need to check this with the lender before applying.

Two things are crucial when applying for a used car loan. The first concerns the applicant’s eligibility criteria and the second concerns the documents for the car you plan to buy. If these two things are in place, you can instantly get the loan. You can apply online or go to the nearest bank.
It’s a good idea to familiarize yourself with all the terms and conditions and to check the total interest you will pay for a particular term loan. You can compare interest rates from different financial institutions to ensure you get the best deal. If your credit is 750 or more, you can try to negotiate with the bank to offer you the best interest rates. You should also check the processing fees and other hidden fees before applying for the loan, according to Bankbazaar.

Also keep in mind that the loan interest rate for a used car is likely to be higher than the loan interest rate for a new car. In addition, the cost of insurance is not covered by the loan amount. Ensure that the relevant documents are ready as delays in submitting documents will lead to a longer delay in loan disbursement. It is advisable to choose an established lender so that the loan process is simple and takes less time. You should take the help of an auto mechanic whenever possible to avoid a problem later. It’s a good idea to check all the paperwork related to car registration and insurance to avoid any problems getting the loan.

To apply for the used car loan, you will need the loan application form, car appraisal report, ID, proof of address and income documents. Some banks may ask you to pay the down payment, so keep that money aside and check how much loan you need to buy the used car. Calculate EMI and interest by applying different mandates and choose the one you are comfortable with. If your credit rating is low or the car papers are not in order, the loan application may be rejected or the interest may be higher. Also, you should check the fees if you are canceling your used car loan or prepaying it.

Also, remember that you don’t need to provide collateral or collateral to get the used car loan because your car serves as collateral. Below are the interest rates and EMIs for used car loans of Rs 7 lakh for a term of 3 years.

Interest Rate and EMI on Used Car Loan of Rs 7 Lakh for 3 Years

Compiled by BankBazaar.com

Note: Used car loan interest rates for all listed public and private banks (ESB) considered for data compilation (excluding small finance banks); Banks whose data is not available on their website are not taken into account. Data collected from respective bank’s website as of 08 March 2022. Banks are listed in ascending order based on interest rate, i.e. the bank offering the lowest interest rate on the used car loan is placed at the top and the highest at the bottom. The lowest interest rate offered by banks is shown in the table (regardless of loan amount or term). The EMI is calculated on the basis of the interest rate mentioned in the table for the Rs 7 Lac loan with a duration of 3 years (processing fees and others are assumed to be zero for the calculation of the EMI); The interest mentioned in the table is indicative and may vary depending on the general conditions of the bank. *Rack interest rate