Question 1

What is the highest loan amount I can borrow with a used car loan?

Accepted Answer

You can borrow up to Rs. 75 Lakhs or more in used car loans. But before that, do check if the lender gives you the following loan limit. The loan amount is decided based on the price of the used car, as well as other factors like credit score, income, and lender’s policy.

Question 2

What is the interest rate on my used car loan?

Accepted Answer

The lender determines the interest rate of a used car loan, factoring in your income, repayment history, and other factors. The starting rate is 9.80%, but the actual rate may vary depending on your lender.

Question 3

How much time will it take to approve my used car loan?

Accepted Answer

The approval process for a used car loan varies depending on your application. If the lender requires more time to verify the information you’ve provided, it could take a few days. If they find enough information and your application is satisfactory, then it will be approved within a few hours.

Question 4

Can I reduce my 2nd hand car loan interest rate?

Accepted Answer

A good CIBIL score of 750 or more can help you secure a used car loan at a lower rate. Lenders tend to prefer those applications where the applicant shows a good repayment track record. And this gives you the opportunity to negotiate for a lower interest rate.

Question 5

How to use the used car loan EMI calculator?

Accepted Answer

You can use our car loan EMI calculator. And estimate the amount you’ll be paying in EMIs. To use the calculator, enter the amount you need, choose the duration of repayment and the desired interest rate.

Question 6

Can you get 100% financing for a used car?

Accepted Answer

Yes, you can. When searching for a used car lender, check their terms and conditions. Our lending partner, HDFC Bank, provides 100% financing for used car loans. Get a loan quote to learn more.

Question 7

Does SBI Bank have the option of used car loans?

Accepted Answer

Yes, SBI offers the option of a used car loan application. The bank's loan has a 20% margin, so be prepared with your down payment amount if you’re borrowing from SBI to purchase a used car.

Question 8

What is the EMI of Rs. 5 Lakh used car?

Accepted Answer

Your EMI for a Rs. 5 Lakh used car loan will be Rs. 8,378 (interest rate is 10.3% p.a and tenure is 7 years). For a more accurate estimate on used car EMI, use our EMI calculator.

Question 9

Should I apply for a used car loan?

Accepted Answer

You should apply for a used car loan if you don’t have a lump sum and need to buy that specific used car. Borrowing a loan helps you access funds immediately and won’t burden you as you can pay it off in EMIs.

Question 10

How old should a car be to be eligible for loan financing?

Accepted Answer

Your car should be under 5 years old. If it is more than that, there are a few options available for you to finance your used car.

Question 11

What CIBIL score is required for a used car loan?

Accepted Answer

A CIBIL score of 750 and more is required for a used car loan. A higher score ensures a lower interest rate and instant approval.

Question 12

Does a low CIBIL impact the interest rate on a used car loan?

Accepted Answer

Yes, a lower score means a bad credit history and this makes you less likely to get approved for a loan. And even though you get approved, the rate of interest will be high.

Question 13

What is the maximum loan amount I can get for a used car?

Accepted Answer

The maximum loan amount you can get depends on the value of your used car. Banks and NBFCs finance 85-90% of the car value.

Question 14

What are the eligibility criteria for a used car loan?

Accepted Answer

To apply for a used car loan you need to meet the following requirements:
Age - 21-60 years
Annual income - Rs. 2,40,000 - Rs. 3,50,000
1 year of work experience in the current organization

Question 15

What documents are needed to avail a used car loan?

Accepted Answer

Banks ask for certain information to proceed with your loan application:
ID proof: Driving license, PAN, Aadhaar
Income proof: Bank statement, salary slip

Question 16

How long does it take for a used car loan to be approved?

Accepted Answer

With HDFC Bank you can get approval for a used car loan in just 30 minutes.

Question 17

How much down payment is required for a used car loan?

Accepted Answer

A minimum 20% of down payment is required to avail of the used car loan. But this margin may vary depending on your lender.

Question 18

Can self-employed individuals get a used car loan?

Accepted Answer

Yes, self-employed people can get used car loans. Instead of salary slips, they need to provide the latest ITR.

Question 19

What is the maximum tenure for a used car loan?

Accepted Answer

The maximum repayment period for a used car loan is 7 years. Check with your bank before you proceed with the loan application.

Question 20

How does my credit score affect my used car loan eligibility?

Accepted Answer

A credit score is a vital part in your loan limit. With the help of your credit score, you can negotiate for a higher limit on your loan application.

Question 21

What are the foreclosure charges for a used car loan?

Accepted Answer

The foreclosure charges go from 3%-6% of the principal loan balance. If you close your used car loan within a year of EMI payment, the fee would be high. So ensure you plan it accordingly.

Question 22

What happens if I default on my used car loan?

Accepted Answer

Unpaid car loan EMIs may lead to repossession of your vehicle. The process will begin after 60-90 days of unpaid EMIs. The duration of repossession may vary.

Question 23

How does car repossession work in India?

Accepted Answer

In India, car repossession is governed by the SARFAESI Act, 2002, where if a borrower fails to pay installments for 90 days, the vehicle can be treated as a Non-Performing Asset. Financial institutions may use SARFAESI to recover loans.

Question 24

Is it beneficial to foreclose my used car loan early?

Accepted Answer

Yes, it is beneficial to close your used car loan early. With this you save a handsome amount of interest payout. But the foreclosure fee might be a little high compared to paying it off later.

Question 25

What are my rights if my used car is repossessed?

Accepted Answer

If your used car is repossessed, you can pay what you owe to keep it before it's sold. You might get paid if someone mishandled your case. You can also go to a special court to fix any problems with your lender.

Question 26

How do I calculate the outstanding loan amount for foreclosure?

Accepted Answer

To calculate the outstanding loan amount for foreclosure, first determine the remaining principal balance by referencing your loan statement. Next, add the foreclosure fee. Finally, subtract any payments made since the last statement to find the total amount owed.

Question 27

What are the lender's rights in case of a used car loan default?

Accepted Answer

If you default on a used car loan, the lender has the right to repossess the vehicle. They can then sell the repossessed car to recover the outstanding loan amount. The lender can also pursue legal action to recover any remaining debt.

Question 28

What is the process of foreclosing a used car loan?

Accepted Answer

First contact your loan provider, learn about the online/offline loan closing process. Ask about the total amount you’re required to pay. Once you pay the loan balance plus foreclosure fees, wait for a few days and collect the NOC document.

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