What are the used car financing interest rates?

Theold car finance interest rateis the interest you have to pay on the principal loan amount. It depends on multiple factors like the cost of funds, customer credentials, geography, asset, tenor, and discounts offered in the market. With Tata Capital, you get transparent and accuratepre-owned car interest rates, which are the lowest in the industry.

How can I repay the Used Car Loan?

You can easily repay your loan through ECS, Direct debit, and post-dated cheques drawn on "Tata Capital Limited".

Can I reduce or change the EMI on my Used Car Loan?

No, your EMI remains the same for the life of the loan. However, we offer flexible solutions that are specifically designed to fit your uniquesecond-hand car loan ratesrequirement.

How long does it take to process the Used Car Loan?

We take 24-36 hours to process your application, from the completion of documentation to sanctioning the loan.

What is the processing fee for a pre-owned car loan?

Besides theinterest rates, you'll also have to pay other charges like the processing fee. Lenders charge this one-time fee at the time of loan application processing. The processing fee is non-refundable even if the lender rejects your loan application. At Tata Capital, the Used Car Loan processing fee is charged at1.75% of loan amount or 4000 whichever is higher

What are the foreclosure charges applicable on used car loan repayment?

Interest ratesare one of the many charges that you need to pay for yourused car loan. If you want to repay the entire loan amount in a single payment, you will have to pay the penalty known as the foreclosure charge. Tata Capital charges foreclosure as follows: 7% of the principal outstanding at the time of foreclosure + GST if your loan is getting foreclosed within 6 months 6% of the principal outstanding at the time of foreclosure + GST if your loan is getting foreclosed within 6 to 12 months 5% of the principal outstanding at the time of foreclosure + GST if your loan is getting foreclosed after 12 months

Is interest on used car loan tax exempted?

Salaried individuals do not get any tax exemptions for a used car loan. However, Section 80 C of the Income Tax Act states that self-employed individuals who want to purchase a car for commercial purposes can get some relief from highused car loan interest rates. The interest you have to pay in a year is eligible for a tax deduction. Self-employed individuals can also file for tax benefits on the depreciation value of the car.

Is the used car loan processing fee refundable?

No, the used car loan processing fee is not refundable. Lenders use this money to take technical and legal action for the verification of your documents, your car’s age and make, etc. Therefore, even if they reject your loan application, you'll not receive a refund for the processing fee.

Is it mandatory to provide a guarantor when I avail of a pre-owned car loan?

Having a guarantor while applying for a pre-owned car loan with Tata Capital is not a mandate. However, if your income fails to meet the eligibility criteria, we suggest a guarantor or a co-applicant.For instance, you must fulfil the income criteria to get a used auto loan. This is Rs. 20,000 monthly or more for salaried individuals and a minimum of Rs. 2 lakhs per annum for self-employed individuals.So, if your income falls in this range, you need not provide a guarantor. On the other hand, if you fail to fulfil this income eligibility criteria, a guarantor can help you secure your second-hand car loan. Note that the guarantor can be your spouse, a blood relative or a close family member to help you improve your loan eligibility.Furthermore, a guarantor with a high CIBIL score (750 or above) and a healthy loan repayment pattern can significantly increase your chance of securing a used car loan with Tata Capital.

Do I have to provide collateral or security when I use a used car loan?

No, with Tata Capital, you don't need to provide additional collateral or security to avail of the pre-owned car loan. However, the car for which the loan is taken is the collateral. This car is hypothecated to Tata Capital documentation, making it the only collateral required to avail of used car financing.Along with being a secured loan, the Tata Capital used car loan also offers the following benefits-#1. The second-hand car loan rates & charges are competitive, starting at 12.99% onwards.#2. The loan tenure is flexible between 12-72 months.#3. We offer a loan covering up to 95% of your car's value.#4. We also require simple documentation and fast processing and quick disbursement of the loan amount. You can expect the amount disbursed directly within 24 to 36 hours of document submission to your bank account.#5. We offer a high principal loan amount that can go up to Rs. 50 lakhs.

How can I get the lowest used car financing interest rate?

Various factors determine the used car loan rates & charges at Tata Capital. These factors include-#1. Debt-to-Income Ratio - This ratio is important while determining your used auto loan rates & charges as it indicates if you can pay the loan EMIs on time. A high debt-to-income ratio can lead to high-interest rates or perhaps even the rejection of your application.#2. Increase the down payment for lower used car interest rates - Making a higher down payment reduces your second-hand car loan interest rates. This is because a high down payment highlights that you are financially responsible, given you don’t need the loan to finance a larger portion of your purchase. Often this can mean better interest rates.#3. Income - The second-hand car loan rates & charges can get lower if you have stable employment with a steady income.#4. Credit score - An excellent credit score (750 or above) can decrease your pre-owned car loan rates & charges at Tata Capital. After all, a higher credit score represents a good history of repayments signalling you are less likely to default on the loan. This can get you better interest rates.

How is your old car loan interest rate calculated?

You can calculate theused car loan interest rateusing a simple mathematical formula-[ P x R x ( 1 + R ) ^ N ] / [ ( 1 + R ) ^ N - 1 ]where :Pstands for the Principal AmountRstands for Rate of Interest, andNstands for the Tenure of the Loan in months.You can add the desired values in this formula to calculateused car interest ratesmanually. But this process can be time-consuming and complicated. For instant and accurate results, you can use aused car finance ratecalculator.

What is the Eligibility Criteria for a Used Car Loan?

You don't need hefty paperwork to be eligible for a used car loan. With Tata Capital, both salaried and self-employed individuals can easily meetused car loan eligibilityby maintaining agood CIBIL scoreof 750 or above. This will also reduce yoursecond-hand car loan interest. But other criteria will vary slightly.For example, salaried individuals must be between 21 and 60 years of age and have a monthly income of at least Rs. 20,000, and have work stability for a minimum of 1 year.Self-employed individuals must be between 21 and 65 years of age, have an annual business income of at least Rs. 2 lakhs, and have a stable business for a minimum of 3 years.

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Used Car Loan Interest Rates

Loan Up to ₹ 50 Lakhs* | Tenure Up to 72 months | Interest Rates Starting at 10.75%*

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Second Hand Car Loan Interest Rates

The used car loan interest rate depends on multiple factors, including the cost of funds, customer profile, location, type of vehicle, loan tenure, and prevailing market discounts. Lenders also assess your credit score, monthly income, and repayment capacity to determine the applicable second hand car loan interest rate, ensuring it aligns with your financial stability and risk profile.

Type of Fee	Application Charges
Processing Fee	Minimum 1.75% of loan amount or Rs 4000 whichever is higher (Term Loan)
LTV	We offer loans for a wide range of second-hand cars, so you don't have to compromise on your dream vehicle. You can avail a loan up to 95% for purchase of used car and upto 200% on your exisiting car. What's more? You get to enjoy flexible EMI repayment options and quick disbursal of funds which makes Tata Capital the best choice for taking car loans for used cars.

At Tata Capital, we understand that the requirement of each customer is unique. This is why our experts ensure you get a transparent and suitable deal at low-interest rates. We offer the most competitive interest rates in the industry, starting at just 10.75%.

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Penal Charges on Used Car Loan

Type of Fee	Applicable Charges
Default in payment of amounts due as per the Facility Documents	3% per month on overdue amount
Dishonour of any cheque/ payment instruments	These are those charges that are levied in case of an EMI bounce per instance. In other words, these charges are levied when you miss a Used Car loan EMI payment due to inadequate funds in your bank account. At Tata Capital, you’ll be required to pay ₹ 600 per instrument per instance.
Mandate Rejection Service Charge	Charges will be levied if EMI is due but valid instrument is not available for banking due to Mandate rejected by Borrower’s bank or EMI Post-dated cheques(wherever applicable) are not available. Tata Capital charges a nominal amount of ₹ 450 + GST

Other Charges On Second Hand Car Loan

Type of Fee	Applicable Charges
Prepayment Penalty/ Foreclosure charges	7% on Prepayment/ Foreclosure amount if the loan is being prepaid/ foreclosed within 6 months. 6% on Prepayment/ Foreclosure amount if the loan is being prepaid/ foreclosed after 6 months but within 12 months. 5% on Prepayment/ Foreclosure amount if the loan is being prepaid/foreclosed after 12 months.
Statement of Accounts	Customer portal – Nil Branch walk in – ₹ 250/-
Loan Cancellation Charge	₹ 6500/-
Instrument swap charges	₹ 550 each time PDC is swapped
Duplicate Repayment Schedule	₹ 550/-
Duplicate NOC	₹ 550/-
Valuation Charges	₹ 750/-(Per valuation)
NOC for Interstate Transfer	₹ 1000/-
Stamp Duty	As per actuals
Broken Period Interest	At Actuals
NACH / PDC Charges	₹ 500/-
Foreclosure Report	₹ 550/-
Documentation charges	₹ 1,500/-
NOC for conversion of private to commercial registration	₹ 5600/-
Charges for Repossession of Vehicle	₹ 22000 as applicable
PDD charges	₹ 450/-

Note: GST, other government taxes and levies as applicable, will be payable on all fees and charges.

Used Car Loan Interest Rate - Features & Benefits

Not only are used car auto rates and charges competitive, but they also offer a variety of additional benefits. These benefits make availing of a pre-owned car loan extremely attractive for several reasons.

Attractive Interest Rates

Tata Capital offers competitive used car loan interest rates, making it easier to finance a vehicle without high repayment burdens.

Flexible Loan Tenures

Loan terms range from 12 to 72 months, allowing borrowers to choose a repayment period that suits their financial situation.

Quick Loan Disbursement

Faster approval and disbursal ensure that funds are available quickly, helping you secure the best deals on a used car.

Minimal Documentation

The process requires basic documents like identity proof, income proof, salary slips, and residence proof for quick approval.

Multiple Ways to Apply

Apply online, visit a branch, connect via phone, or use Tata Capital’s virtual assistant or WhatsApp for a seamless application process.

Factors Affecting Second Hand Car Loan Interest Rates

While calculating interest rates, lenders consider multiple fixed and variable factors.

Some of the key factors that influence the used car loan interest rates are:

Debt-to-Income Ratio

This ratio reveals if you can pay the loan EMIs on time. A high debt-to-income ratio paints a poor picture and can lead to the rejection of your application or high-interest rates.

Repayment Tenure

The longer the loan tenure, the lower will be your interest rates. But this increases your overall interest payouts. For a shorter tenure, you'll have to pay high second-hand car loan interest rates, but the overall amount that you pay for the car will be low.

Increase the down payment for lower used car interest rates

Making a higher down payment reduces your second-hand car loan interest rates. It also lowers your EMIs as you borrow a lower principal amount. A high down payment also highlights that you are financially responsible and can repay the loan, reducing your pre-owned car loan interest rates.

Income

You can get low pre-owned car loan interest rates if you have stable employment with a steady income. If you're a salaried individual, lenders will also consider your company when determining the interest rates on a used car loan.

Credit score

An excellent credit score can help you avail of low pre-owned car loan interest rates. A poor credit score can lead to the rejection of your application or high-interest rates.

Avail of a used car loan from Tata Capital to enjoy affordable second-hand car loan interest, starting at just 10.75%.

How to lower used car Interest Rates

Maintain a Good Credit Score: Lenders trust borrowers with high creditworthiness, so the chances of getting favourable used vehicle interest rates go up with a good credit score.
Make a Higher Down Payment: You’ll need to borrow less if you make a higher down payment. This signals financial stability and low risk to the lender, and can help you secure better old car loan interest rates.
Choose a Shorter Loan Tenure: Shorter loan tenures often come with lower used auto finance rates. Quick repayment means you pay less interest overall on a pre-owned car loan.
Compare Offers from Multiple Lenders: Don’t just settle for the first loan offer you get. Compare used car loan interest rates India 2025 from top lenders to find the best deal.
Pick a Trusted Lender with Transparent Terms: Pick reputable lenders who offer competitive and fair used vehicle rates without hidden charges. Look for platforms known for offering the lowest used car loan interest rate India 2025 to save more.

Important things to consider before purchasing a used car

Before applying for a second-hand car loan, it’s important to evaluate key aspects like the following, to ensure a smooth ownership experience:

Insurance Details: Verify the type of insurance the car holds. Buyers can choose between third-party insurance or a more inclusive comprehensive policy based on their needs and budget.
Registration Certificate Verification: Be sure to check the car’s Registration Certificate (RC). It should be valid and must clearly mention the owner’s name, engine number, and chassis number. Additional documents may also be required.
Vehicle Service History: Go through the vehicle’s service records to understand how well it has been maintained, how often it’s been serviced or whether any major repairs were required.
Overall Condition of the Car: Inspect the car thoroughly, from its interiors and exteriors to its mileage and overall performance. Take a test drive before making your final decision.

Loan Terms and Interest Rates: Understand the terms of your loan thoroughly. Compare used auto interest rates, and pre owned car loan interest rates across lenders. Choosing the best offer can help you secure the lowest used car loan interest rate India 2025 and reduce your overall cost.

Used Car Loan EMI Calculator

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₹75,000 ₹35,00,000

Loan duration

1 Years 6 Years

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10% p.a 19% p.a

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Disclaimer:

The fees/charges stated above are subject to change at Tata Capital’s discretion from time to time.
Customers who have taken a loan before April 15th, 2019, need to refer to the loan agreement and schedule of charges for applicable interest rates.

For the definitions of the above charges, please refer to the Master Terms and Conditions sheet. We will provide soft copies of the documents mentioned in the table above, free of cost. For hard copies, please refer to the above table for the applicable fees and charges.