Used Car loan

Features and Benefits
Eligibility
Interest Rates
FAQs
Important Links
Related Product

Used Car Loan

A Car Loan for second-hand cars works similarly to a loan for a new car. In India, most banks and NBFCs offer financing options specifically designed for buying pre-owned cars.

The second-hand car loan market in India has grown significantly in the past few years. It is relatively easy to get budget-friendly pre-owned cars that are in great condition too.

Before providing approval for a Used Car Loan, banks check the chosen car model's age and discontinuation status. The combined total of the car's age and the loan repayment schedule should ideally not exceed 8 to 10 years. Select a relatively newer car model, not more than 2 to 3 years old, to improve your chances of obtaining the required financing.

Features & Benefits of Car Loan for Second-Hand Car

Loan amount

Many banks and financial institutions can provide up to 100% auto loans for used vehicles. You can request a callback by filling out this form and checking if you are eligible to take a second-hand car loan.

Unmatched service

Banks and financial institutions offer customer service if you are applying for second-hand car loans. Banks provide personalised assistance throughout the loan application process, helping you to understand the terms and conditions and guiding you through the necessary paperwork.

Flexible repayment tenure

You can select a repayment tenure that best fits your financial situation. Longer tenures can lead to lower monthly instalments, making managing your finances easier, while shorter tenures may result in higher monthly payments but faster loan repayment.

Quick and easy processing

Banks often have tie-ups with many vendors who sell second-hand cars and hence can provide assistance in this regard. With the advancement of online services, you can apply for loans, submit documents, and track the status of your applications online, saving time and effort.

Loan without income documents

Banks offer Car Loans for pre-owned cars without requiring extensive income documentation. Banks ask only for the insurance document and the vehicle's registration certificate. This is good for self-employed individuals or those with irregular income sources, as it simplifies the loan application process.

Buying assistance

Besides providing loans, many financial institutions offer to help you find the right second-hand car. It includes access to a network of dealerships or information on trustworthy sellers, ensuring you make informed purchasing decisions.

Applicable Charges

Here is a list of applicable charges when taking a loan for a second-hand car:

Sr No.	Types of Charges	Charges
1	Cheque/ECS/NACH Bounce/Instrument Return Charges	Rs 339/- per instance
2	Cheque/Instrument Swap Charges	Rs 500/- per instance
3	Duplicate Statement Issuance Charges	Rs 250/- per instance
4	Duplicate Repayment Schedule Issuance Charges	Rs 250/- per instance
5	Duplicate No Dues Certificate/NOC	Rs 50/- per instance
6	Penal interest	2% per month
7	Loan cancellation/Re-booking	Rs 550/- per case
8	Foreclosure/Part Payment Closure	5% of the Principal Outstanding
9	Stamp Duty	At actuals
10	Issuance of Credit Report	Rs 50/- per instance
11	Documentation Charge	Rs 700/-
12	Registration Certification Collection Charge	Rs 250/- per instance
13	Valuation Charges	Rs 590 (inclusive of GST)

* Goods and Services tax will be charged extra as per the applicable rates on all the charges and fees (wherever GST is applicable).

Check your eligibility

Eligibility Document

Understanding your Used Car Loan eligibility is the first turn in the journey toward acquiring a pre-owned vehicle. With financial solutions starting from ₹1 lakh and extending up to 95% of the vehicle's valuation, getting behind the wheel of a car that matches your dreams and budget is made accessible. Understand the Used Car Loan eligibility and gear up to make an informed decision.

Eligibility

Salaried individuals who are eligible for a Used Car Loan

Minimum 21 years of age
Maximum 60 years of age at maturity (conditions apply)
Minimum net annual salary of Rs 2,40,000 p.a. for certain models and Rs 3,00,000 p.a. for specific models
Income elgibility based on latest salary slip/form16/ last 3 months bank statements
Minimum 1 year of continuous employment

Self-employed individuals who are eligible for a Used Car Loan

Minimum 21 years of age
Maximum 65 years of age at loan maturity
Minimum Net Annual Business income of Rs. 2,00,000 p.a. for selected models and Rs. 3,50,000 p.a. for others.
Minimum 2 years of employment in the same line of business

Self-employed non-individuals who are eligible for a Used Car Loan (partnership/huf/pvt ltd/ ltd/ trust/ societies)

Minimum Net Annual Business income or Rs. 2,50,000 p.a. for selected models and Rs. 3,50,000 p.a. for others
Income eligibility based on latest 2 years Income Tax Returns and audited financials of 2 years along with computation of income
Minimum 2 years of employment in the same line of business

Car Loan Eligibility Calculator

Use the Car Loan eligibility calculator to find out whether you can avail of a pre-owned car loan.

Factors that affect used Car Loan eligibility

Credit score: Your credit score is a reflection of your financial trustworthiness. A higher score can open doors to better loan terms, lower interest rates, and a higher loan amount. Lenders use this as a key indicator to determine the risk involved in lending to you. A score above 750 often unlocks the best loan conditions, including competitive interest rates and a higher borrowing capacity.
Debt-to-income ratio: This ratio measures your monthly debt against your gross monthly income. Ideally, lenders like to see a debt-to-income ratio below 40%. This means your total monthly debts should be less than 40% of your monthly income. Staying under this threshold indicates you're not over-leveraged, making you a more appealing candidate for a loan.
Age and mileage of the car: The older a car or, the more miles it has clocked, the more its value depreciates. Lenders often have a cut-off for the age and mileage of the vehicle — typically not financing cars over 5 years old or with over 1,00,000 kilometres. This ensures the loan is backed by a car that's likely to remain reliable and valuable for the duration of your loan term.

General Documents:

Application Form
Registration Certificate of Vehicle.
KYC Documents

Documents Required	Individual Cases		Non-Individual Cases
Documents Required	Salaried	Self Employed	Partnership Firm/ Trust/ Society	Private Limited/ Limited Companies
Office / Business Proof	NA	Telephone Bill/ Electricity Bill/ Shop & Establishment act Certificate/ SSI or MSME Registration Certificate/ Sales Tax or VAT Certificate/ Current A/c Statement/ Regd Lease with other Utility Bills	NA
Income Proof	Latest 2 Salary Slips & Latest Form 16	1. Latest ITR	Audited Balance Sheet/ P&L Account & ITR for latest 2 years
Bank Statement	Latest 3 months Bank Statement		Latest 3 months Bank Statement
Age Proof	PAN / Driving Licence/ Passport/ Birth Certificate		NA
Sign Verification Proof	PAN / Passport/ Bankers Verification		NA
Employement / Business Continuity Proof	Copy of Appointment Letter/ Date of Joining on Salary Slip/ ITR of Form 16/ Work Experience Certificate/ Relieving letter	Shop & Establishment act Certificate/ SSI or MSME Registration Certificate/ Sales Tax or VAT Certificate/ Current A/c Stateme	Shop & Establishment act Certificate/ SSI or MSME Registration Certificate/ Sales Tax or VAT Certificate/ Current A/c Stateme
Additional Documents	NA		PAN Cards/ Authority Letter by all partners & Board Resolution for Trust / Society	List of Directors & Shareholding Patter/ PAN Card/ Board Resolution/ Certificate of Commencement of Business for Ltd. Co.

Interest Rates and Charges

Car Loans for a used vehicle can offer you the financial flexibility to purchase your ideal car without the hefty price tag of a new one. Understanding the Interest Rate of a Used Car Loan is crucial to making an informed decision.With options aplenty, getting familiar with these rates and related charges can lead to substantial savings.

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Frequently Asked Questions

Axis Bank’s Used Car Loans provides easy financing to help you get the used car you want. Before applying for the Used Car Loan, make sure you read the Frequently Asked Questions (FAQs) below.

Banks or financial institutions offer financing options for individuals who want to buy a used or pre-owned vehicle. You'll need to repay the borrowed amount with interest over the loan tenor.

Yes, banks offer loans specifically designed for second-hand or used cars. These loans function similarly to those for new cars. You can contact your bank to apply for a Used Car Loan. Upon approval of your application, you can utilize the loan amount to buy the pre-owned vehicle you desire.

The amount you can get for a Used Car Loan depends on your creditworthiness, the lender's policies, and the age and value of the used car. Most banks offer 80-100% financing for used car loans.

A second-hand car loan provides good funding, enabling you to cover a part of the vehicle's purchase price. Buying a used car on loan can be a suitable option for many individuals, but you must assess your financial situation and choose a loan that aligns with your needs and preferences.

The maximum loan tenure for pre-owned car loans is 5 years.

You can avail of a pre-owned car loan funding of up to 95% of the valuation amount (Sale-purchase) and up to 85% of the valuation amount (Refinance)

The minimum age for applying for a used car loan is 21 years.

Any pre-payment/excess amount paid by you to the Bank; shall be appropriated in the loan account basis the below criteria/methodology in the absence of any specific instructions from you:

Excess amount greater than (>) EMI: If service request (SR) for part payment is not created/received within 2 days of receipt of funds, the excess funds will be adjusted towards principal outstanding as part payment.
Excess amount equal to (=) EMI: If service request (SR)/instructions for part payment is not created/received on same day of receipt of funds, excess amount will be refunded back to your operative account.
Excess amount less than (<) EMI: Excess amount will be kept unappropriated in the loan account for 15 days; post 15 days the excess funds shall be adjusted towards principal outstanding as a part payment.