What you need to know
Loans for pre-owned cars cost more than new-car loans — from about 9.45% at PNB (floating) to 12.50%+ at NBFCs — and come with shorter tenures, lower funding based on valuation, and rules on the car’s age.
Used car loan rates by lender
| Lender | Used car rate | Processing fee | Funding | Max tenure / car age |
|---|---|---|---|---|
| Punjab National Bank | 9.45% – 10.55% floating (fixed 10.45% – 11.55%) | 0.25% (₹1,000 – ₹1,500) | 75% | 5 years; car up to 3 years old |
| Indian Bank | 9.55% – 11.65% floating | As per fee schedule | 70% – 80%; up to ₹3 crore | 6 years |
| ICICI Bank | 9.75% onwards | 2%, max ₹20,000 + GST | Up to 100% (official) | 7 years |
| Bank of Baroda | 10.20% – 12.95% floating (fixed 11.90% – 14.65%) | 0.50% (₹2,500 – ₹10,000) + GST | Lowest of 75% of market / agreement value or 100% of IDV; up to ₹50 lakh | 5 years; car age + tenure ≤ 8 years |
| SBI | 10.45% – 15.60% | 1.50% (₹3,000 – ₹10,000) + GST | 85% of valuation; ₹2 lakh – ₹1.5 crore | 5 years; car age + tenure ≤ 10 years |
| Tata Capital | 10.49% onwards | Up to 2.95% | Up to 100% | 6 years; car ≤ 10 years old at maturity |
| HDFC Bank | 11.25% onwards (product page shows 10.49%) | — | — | 5 years |
| Sundaram Finance | 12.50% onwards | ₹2,500 (aggregator) | Up to 85% | 4 years; models up to 7 years old |
Rates from lender pages and BankBazaar, Aug – Sep 2026. Full comparison, calculators and guides on the used car loan page.
What is different for used cars
- Funding is based on the lender’s valuation or the insurance IDV, not the price you agree
- Car age + loan tenure is capped (e.g. 8 years at Bank of Baroda, 10 years at SBI)
- Processing fees are higher (SBI 1.5%, Bank of Baroda 0.5%, NBFCs up to 2.95%)
- Ownership must be transferred (Form 29/30) and the new hypothecation added (Form 34)
- If the seller’s car is still on loan, their lender’s NOC is needed first
New vs used
| Point | New car loan | Used car loan |
|---|---|---|
| Starting rate | 7.45% – 8.40% at major banks | About 9.45% (PNB floating) to 12.50%+ at NBFCs; SBI 10.45% – 15.60% |
| Funding | Up to 85% – 100% of on-road price | Usually 75% – 85% of valuation (PNB 75%, SBI 85%) |
| Tenure | Up to 7 years (8 at Axis, SBI Green) | Usually up to 5 years; car age + tenure capped (e.g. SBI 10 years) |
| Processing fee | Flat ₹500 – ₹8,500 or 0.25% – 0.5% | Higher — SBI 1.5% (max ₹10,000), BoB 0.5%, NBFCs up to 2.95% |
| Valuation | Invoice price | Lender’s valuer or IDV decides the value |
| Paperwork | Dealer invoice; new RC with hypothecation | RC transfer (Form 29/30) plus hypothecation (Form 34) |
A used car costs less upfront but the loan costs more per rupee. See used car loan rates and our new vs used guide.
Frequently asked questions
Which bank has the lowest used car loan rate?
Among lenders tracked, PNB (9.45% floating), Indian Bank (9.55%) and ICICI Bank (9.75% onwards) have the lowest starting rates.
For information and comparison only. Loan terms, rates and rules change — confirm with the lender and read the Key Facts Statement before borrowing.