Check out used car loan interest rates starting from 10.50% p.a., with loans of up to ₹77 Lakhs and flexible terms of up to 6 years.
✓ Interest Rates Starting @ 10.50% ✓ Loan of up to ₹77 Lakhs ✓ Quick Disbursal
A used car loan is a smart way to buy a pre-owned car without paying everything at once. You can repay the amount in small monthly EMIs, based on your budget. Lenders may offer up to 100% of the car’s price, if you meet their rules. One of the most important things to check is the used car loan interest rate. Even a small difference in the rate can change your monthly EMI and total repayment.
That’s why it's helpful to compare car loan interest rates for used cars before making a decision. On Bajaj Markets, you can apply for a loan at rates starting from 10.50% per annum.
Before taking a loan, it’s smart to compare offers from different lenders. This includes both the used car finance interest rates and any extra charges. Doing this gives you a clear picture of how much you will repay in total.
Also, don’t forget to look at the amortisation details—this shows how your payments are split between interest and principal each month. It helps you plan your money better.
Here are some of the second-hand car loan interest rates & other charges offered by various lenders:
Lending Partner |
Minimum Interest Rate |
Repayment Tenure |
Loan Amount |
Processing Fee |
Bajaj Finserv* |
10.50% p.a. |
Up to 72 months |
Up to ₹77 Lakhs |
Up to 2.95% of the loan amount (inclusive of taxes) |
State Bank of India (SBI) |
11.75% p.a. |
Up to 60 months |
Up to 85% of the car's value |
1.25% of the loan amount (Minimum ₹3,750; Maximum ₹10,000) plus GST |
Axis Bank |
13.55% p.a. |
Up to 60 months |
Up to 85% of the car's value |
₹6,000 or 1% of the loan amount, whichever is higher |
HDFC Bank |
14.50% p.a. |
Up to 60 months |
Up to 100% of the car's value |
Up to 1% of the loan amount (Minimum ₹3,500; Maximum ₹8,000) |
Disclaimer: The mentioned rates are as of 27th May 2025 and are subject to change at the lender’s discretion. Those marked with ‘*’ are available on Bajaj Markets.
The interest rates on used car loans depend on several factors. These help to provide a clearer picture about the lender’s risk and the borrower’s repayment capability. Here are some of the crucial ones:
Credit Score
Lenders assess the borrower’s credit score to determine interest rates. A higher score (750 and above) indicates lower risk, leading to better loan terms and lower interest rates. A lower score may result in higher used car finance interest rates or reduced loan eligibility.
Debt-to-Income Ratio
A high debt-to-income ratio suggests financial strain and can signal higher risk for the lender. Borrowers with a lower DTI (less than 50%) are more likely to get favourable second hand car loan interest rates.
Loan Term
Longer tenures reduce monthly EMIs but increase the total interest paid over time. Shorter tenures may have higher EMIs but lower rates, making them more cost-effective in terms of used car loan interest rate management.
Loan Amount
Lenders often set interest rates based on the loan amount. Higher loan amounts might attract slightly lower rates, while smaller loans may come with higher car loan interest rates for used cars.
Down Payment
Making a higher down payment can help in reducing the lender’s risk as it lowers the loan amount. By paying 20% of the car’s value upfront or more, one might be eligible for better used car financing interest rates.
Age of the Car
Older cars depreciate faster, increasing risk for lenders. Interest rates tend to be higher for vehicles older than 5–7 years, while newer used cars may get more competitive rates.
Lender Type
Used car finance interest rates can vary depending on the type of lender chosen for the loan. Banks generally offer lower rates, while NBFCs provide more flexible eligibility criteria at slightly higher rates. Dealership financing may be convenient but could include additional charges.
Economic Factors
Wider economic conditions like inflation, RBI repo rates, and overall market liquidity can impact the interest rates on used car loans. When interest rates are low, borrowers might be able to find more affordable financing options.
Income
Showing proof of high income stability and regular earnings might help a borrower boost their eligibility for a lower interest rate on an old car loan. Lenders require salary slips, income tax returns, and bank statements to determine the applicant’s stability.
Occupation
Salaried individuals with stable jobs in reputed organisations with a steady income flow might receive better interest rates than self-employed applicants. However, self-employed individuals with a high business income and a good credit profile can also secure competitive used car finance interest rates.
Loyalty
Existing customers of a bank or NBFC may be eligible for exclusive offers like lower used car financing interest rates, pre-approved loans, discounted processing fees, etc. Borrowers with a history of timely repayments can also negotiate better loan terms with their lender.
There are several additional charges beyond the interest rate that can add to the overall cost of your loan. It is important to carefully understand these fees when considering a used car loan.
Lending Partner |
Documentation Fees |
Stamp Duty |
Payment Return Penalty |
Penal Interest |
Bajaj Finserv |
Up to ₹2,360 (inclusive of taxes) |
As per state laws, deducted upfront |
₹1,500 per instance |
Up to 24% p.a. per instalment from due date until payment |
State Bank of India (SBI) |
Not specified |
As per state laws |
₹250 per instance |
2% p.a. over and above applicable interest rate on overdue amount |
HDFC Bank |
₹650 per case |
At actuals |
₹450 per instance |
18% p.a. on overdue instalment amount |
Axis Bank |
₹700 |
At actuals |
₹339 per instance |
2% per month on overdue amount |
Disclaimer: The above details are based on the latest available information. Please refer to the respective lender’s official website for the most current terms and conditions.
Manually calculating your EMIs using a formula can be a tedious process and prone to mistakes. As a quicker alternative, you can use the Used Car Loan EMI Calculator on Bajaj Markets to save time as well as get precise results. Simply enter your loan amount, interest rate, and repayment tenure in the calculator and get your EMI details instantly. This can help you plan your car purchase costs more accurately.
Used car loan interest rates can be broadly classified into two main categories: fixed and floating. Each has its own way of affecting your EMIs and total repayment.
1. Fixed Interest Rates
These remain unchanged for the entire duration of the loan. While the initial rate is often a bit higher, the key advantage lies in predictability—you’ll know exactly how much to repay each month, with no surprises from market fluctuations.
2. Floating Interest Rates
These are tied to market dynamics, like changes in the RBI’s repo rate. They can start lower than fixed rates but may rise or fall over time, depending on broader economic trends. This, in turn, can influence your EMIs to increase or decrease over time.
Nowadays, some lenders offer hybrid or step-up models that blend the features of both types of rates. This can give you some flexibility upfront as well as protection later. Always remember to compare loan terms from multiple banks and NBFCs. This can help you find your suitable used car finance interest rates.
FAQs
Are interest rates higher on used cars?
Yes, interest rates on used car loans are usually higher than those for new cars. This is because used vehicles lose value faster and may need more maintenance. The higher rate protects lenders from risk, especially since older cars often don’t come with warranties and repairs can be expensive.
Can I negotiate the interest rate for a second-hand car loan?
Yes, if your credit score is above 750, your income is steady, and your past loans were paid on time, you can ask for a better old car loan interest rate. It also helps to compare lenders and use your existing relationship with a bank or NBFC.
Are old car loan rates fixed or variable?
Most second hand car loan interest rates are fixed, meaning your EMI stays the same throughout the loan period. However, some lenders offer floating rates too, which can change with market conditions. Fixed rates are more common as they make it easier to plan your monthly payments.
Is there a charge applicable on part prepayments?
Yes, many lenders charge a small fee if you pay part of your loan early. The amount depends on your agreement. While this won’t change your used car loan interest rate, it can reduce the total interest you pay, especially if done early in the loan tenure.
Are used car loan interest rates different across banks?
Yes, car loan interest rates for used cars vary across banks and NBFCs. Each lender has different rules, risk policies, and borrower assessment methods. It can be a smart choice to check rates from multiple lenders before choosing one, so you get a suitable deal.
What is the best interest rate for a used car loan?
Used car loan interest rates usually starts from around 10.50% p.a. However, the actual rate you get depends on your credit score, income, the car's age, and the lender's policies. It’s always a good idea to compare offers before finalising your loan.
Do used car loan interest rates vary by the car's age?
Yes, second hand car loan interest rates are usually higher for older vehicles, especially those more than 5–7 years old. This is because old cars lose value quicker and may have mechanical issues, which makes them riskier for lenders. Newer used cars generally get better rates.
Can my lender change the interest rate on my used car loan during the tenure?
If your loan has a floating interest rate, your used car loan rate of interest may change due to RBI policy updates or the lender’s rate revisions. If your loan has a fixed rate, it stays the same throughout the tenure, giving you consistent monthly payments.
What happens if I miss a payment? Will it affect my pre-owned car loan interest rate?
If you miss a payment, your lender may charge a penalty, and your credit score can drop. While it won’t change your current pre-owned car loan interest rate, it could make future loans harder to get or result in higher old car loan interest rates later.
Can I repay my pre-owned car loan early to save on interest?
Yes, repaying your loan early helps you save money on interest, especially if done during the early months. However, some lenders may charge prepayment fees, so check the terms. This can be a smart move to reduce your cost under used car finance interest rates.
Are interest rates the same for all types of used cars?
No, the interest rate on old car loans changes based on the car’s make, model, age, and condition. Newer or premium models often come with lower used car financing interest rates, while older or high-mileage cars may attract higher rates due to increased risk.
How does the loan tenure affect the interest rate on a second-hand car loan?
Longer tenures generally come with higher total interest payments, although monthly EMIs are lower. Choosing a shorter tenure can help secure a better second hand car loan interest rate and save on interest in the long run.
