Can I Get 100% of the Cost of the Car as Used Car Loan? Car Loan Blog - Tata Capital

Is It Possible to Get Used Car Loan for 100% Cost of the Car

Mar 06, 2017

Buying a car is an amazing experience in itself, irrespective of whether the car is new or old. After all, a car is a car. So if you are looking to buy even a used car and are slightly short of funds, then you can avail loans that are given specifically for purchase of used cars.

If you want to finances only a part of the cost of the car, then there is no problem. But if you want to get the entire amount to be financed, then that might not be possible.

Lenders always want borrowers to bring some money from their own sources when purchasing any asset. Same is the case with used car loans. As borrowers, you need to bring in atleast 10% of the cost of car as downpayment. This means that only 90% of the cost of car will be financed. So if you want to purchase a used car for Rs 3 lacs, you can only get about Rs 2.7 lacs as loan.

But do note that the actual amount will depend on the age of car, your income and debt servicing capability, credit history, etc. So it's possible that lender might assess and approve a loan even less than 90%.

Having said this, it does make sense for a buyer to borrow less. Even if the lender is ready to give you 90% and you are asking for just 70%, you have an upper hand can negotiate for a lower rate of interest.

So don't be disheartened if your lender approves an amount that is lesser than what you had asked for. It means that you can ask them to lower the interest rates. This will result in a lot of savings on interest cost during the course of entire loan tenure.