Before finalising your decision, make sure to compare all the loan offers to find the one with the best repayment terms.The lockdowns necessitated by the Covid-19 outbreak proved detrimental for the automotive market in India during the first half of 2020. However, with the unlocking measures now in place and considering the fresh demand for personal vehicles amid the festive offers and new launches, carmakers are witnessing a revival of sorts.
In fact, Maruti Suzuki, Hyundai and Tata Motors saw 17.6%, 13.2% and 79% year-on-year growth, respectively, in domestic sales in October last, according to media reports. That being said, the Indian economy in general is yet to recover completely from the pandemic shock and many would, hence, continue cutting corners in whichever ways possible to conserve cash. One such cost-effective idea for those looking to buy a car would be to consider going for a pre-owned car instead of a brand new one, especially when most of the lenders offer loans on used cars, according to BankBazaar.
So, before finalising your decision, make sure to compare all the loan offers to find the one with the best repayment terms. Check for things like maximum loan amount and tenure, applicable interest rate, processing fee and pre-closure charges, EMI amount, documentation requirements, etc. Do note that some lenders might offer these loans only on cars that are less than three years old or with a maximum tenure of 5 years (a few lenders offer such loans for up to 7 years) while most would not finance 100% of the pre-owned car’s value and would, hence, ask for a down payment.
Also, check whether you’re eligible for any pre-approved bank offers or whether there are any concessions to be enjoyed on your used car loan if you’re already servicing a home loan with a particular lender. Lastly, don’t forget to factor in other costs like insurance, maintenance, parking, etc. in your calculations and ensure that all your loan EMIs combined should be less than 40% of your monthly household income, as per BankBazaar.
If you’re looking for a used car loan, here is a list of what India’s leading banks – including SBI, BoI, HDFC Bank, ICICI Bank, and Axis Bank – are currently offering. We have also provided the indicative EMIs for Rs 5 lakh loans for 5-year tenures for all the banks. Do note we have considered the lowest advertised rate for loans up to Rs 5 lakh, have not included the processing fee or any other charges in our calculations and the EMIs could be higher based on the interest applicable to you or because of any other terms and conditions laid down by your lender.
Interest Rate and EMIs on Used Car Loans of Rs. 5 lakh for 5-year tenure by India’s Leading Banks
Disclaimer: Data collected from respective banks’ websites as on 17 Nov 2020. Interest rates for used car loans for all listed (BSE) public & private banks have been considered for data compilation. Banks for which data is not available on their website are not considered. The lowest interest rate offered by the banks on loans of up to Rs.5 lakh and tenures up to 5 years is shown in the table. Processing fee and other charges are assumed to be zero for EMI calculation. The interest mentioned in the table is indicative and may vary depending on the bank’s T&C. Data compiled by BankBazaar.com
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