Buying a used car can save you money as compared to getting a brand-new one. With the right financing, it can be even easier to afford. In 2025, numerous banks and loan companies in India will have good deals for pre-owned car loans. This guide will let you know about the top loan providers for second-hand vehicles, benefits, and unique features to help you make an informed decision.
Best Used Car Loan Providers in India in 2025
State Bank of India
- Interest rate: 11.15% to 14.75% per annum
- Loan Tenure: Up to 5 years
- Processing Fee: As much as 1.5% of the loan amount
- Loan-To-Value Ratio: Maximum of 85% of the car’s value
- Down Payment: At least 15% of the vehicle’s value
Key Benefits:
- Special deals for existing home loan customers with good repayment history.
- Loans are available by using your fixed deposit with SBI as security.
- Repayment options are flexible.
- With extensive branches and customer-centric policies, it is a trustworthy choice to get a loan.
Axis Bank
- Rate of Interest: 13.55% to 15.80% per annum
- Repayment Period: 1 to 5 years
- Service Charge: Rs. 6000 or 1% of the loan amount (whichever is higher)
- LTV Ratio: Up to 95% of the vehicle’s valuation (for refinancing-
- Down Payment: As much as 15% of the car’s value
Perks:
- You do not need a guarantor.
- Fast loan process from approval to disbursal within 2-7 days.
- Different repayment options are available according to the customer’s suitability.
- They have a smooth digital application process, along with competitive interest rates.
ICICI Bank
- Finance Rate: Starting from 11.25% p.a.
- Loan duration: Up to 7 years
- Application Fee: 2% of the loan amount or Rs. 15,000 (whichever is lower)
- Loan-to-asset ratio (LTV): Up to 80% of the vehicle’s valuation
- Down Payment: Minimum 20% of the car’s valuation
Advantages:
- Provides higher loan amounts with longer and flexible tenures
- Fast approval, whether salaried or self-employed
- Special offers for existing customers
HDFC Bank
- Lending Rate: 10.16% – 16.95% p.a.
- Loan Tenure: Up to 7 years
- Processing Fee: 1.5% of the loan amount or a maximum of Rs. 5000
- LTV Ratio: Ranges from 70% to 90% of the car’s value (100% for eligible customers)
- Down Payment: Not less than 10% to 30% of the vehicle’s valuation (zero for qualified customers)
Benefits:
- For eligible customers, a used car loan can be approved without income proof
- Instant approval and less paperwork
- Options to include car insurance along with the loan
Kotak Mahindra Bank
- Rate of Interest: Starting from 9.55% per annum
- Repayment Tenure: Up to 5 years
- Application Fee: Usually 1% to 2%
- Loan-to-Value Ratio: Up to 90% of the vehicle’s value
- Down payment: Minimum 10% of the car’s value
Perks:
- For customers having good credit history, interest rates are lower and competitive
- Loan repayment tenure is quite flexible
- Fast loan process
Mahindra Finance
- Loan Rate: 10% to 15.55% per annum
- Tenure to pay loan: Up to 5 years
- Service Charge: Varies, good to check with lender
- LTV Ratio: Ranges from 10% to 100% of the vehicle’s valuation
- Down Payment: At least 10% to 20% of the car’s value
Benefits:
- Specializing in custom loan plans for new and used cars
- Available in semi-rural and urban areas
- Flexible eligibility criteria
- A popular NBFC (Non-Banking Financing Company), Mahindra Finance, also offers loans in areas that are not metropolitan cities.
Bajaj FinServ
- Interest Rate: 10% to 15.55% p.a.
- Loan Tenure: For 5 years
- Processing Fees: Variable
- Loan-to-Value Ratio: Up to 115%
- Down Payment: Can be Zero
Advantages:
- Quick approvals and minimal documentation
- Good EMI options and the possibility of top-up loans
- Wide network along with good customer support
- Offers flexible financing solutions for those looking to buy used cars.
Eligibility and Documentation to Get a Used Car Loan
The basic information about who can generally apply for pre-owned car loans and the basic documents required are listed below.
Who can apply:
- For salaried individuals:
- Age: 21 to 65
- Minimum monthly income of Rs. 15,000
- At least 1 year in current job
- For a self-employed person:
- Age: 21 to 65
- Minimum annual profit of Rs. 1.5 Lakhs
- At least 3 years in business
Documents Needed:
- Basic KYC such as Aadhar card, PAN card, Passport, Driver’s License
- Income proof
- Bank statements
- Car details, including RC and valuation report
Notably, the age of a vehicle also plays a critical role in the loan tenure. Generally, the older the car, the shorter the repayment period. For instance, if a car is 11 years old, then the maximum loan tenure may be 4 years. This is because the maximum vehicle age considered in most Indian states is 15 years. In contrast, in Delhi NCR, this maximum age is only 10 years.
To conclude, many options exist for used car loans in India. Compare interest rates, amounts, and repayment plans to find the best fit for your budget.
