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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 Fees | The processing fee is a non-refundable fee levied by Tata Capital while processing your loan application. You are charged this one-time fee even if the loan does not get sanctioned. |
| 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 10.49%.
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.
To get a Tata Capital used car loan, applicants must meet the eligibility criteria. Here are a few eligibility criteria that you need to fulfill as a borrower:
For Salaried Employees:
You must be between 21 and 60 years of age.
Your minimum monthly salary must be ₹25,000.
You must have at least 1 year of work experience.
For Self-Employed Individuals:
You must be between 21 and 65 years of age.
The business must have been operating for at least the past 2 years.
You must have a minimum annual income of ₹3 lakh.
For Self-Employed (Partnership):
Self-employed individuals in a partnership must meet the following criteria-
Either the Firm or the Individual partner must have an income of ₹3,00,000 per annum
You must have the last 3 months' bank statements
ABB should be 0.5 times the EMI
For Self-Employed (Others):
For self-employed (others), here is the list to check eligibility for a car finance for a used car before applying.
Your income must be ₹3 lakhs per annum
You must have the last 3 months' bank statements
ABB should be 0.5 times EMI
The interest rate on a used car loan depends on factors such as the cost of funds, customer profile, location, vehicle type, loan tenure, and prevailing market discounts. Besides these, your monthly income, credit score, and repayment capacity are also taken into account. Tata Capital offers you a flexible, transparent, and suitable deal at the best possible interest rates, starting from just 10.49%.
If you want to estimate the overall repayment amount, you can calculate it by considering the associated charges and the total interest rate on the used car loan. Further, you can also use the interest rate calculator on the page. You simply need to enter a few details into the tool, including the loan amount, tenure, and interest rate. The calculator will tell you the EMI, total interest payable, and total interest payable. Thus, you can better control your finances.
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:
Avail of a used car loan from Tata Capital to enjoy affordable second-hand car loan interest, starting at just 10.75%.
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.
Used car loan interest rates are generally higher than new car loan rates, reflecting the greater credit risk and valuation uncertainty associated with pre-owned vehicles. A new car has a clearly defined on-road price, standardized depreciation, and manufacturer warranty — factors that reduce the lender's risk.
On the other hand, a pre-owned vehicle's value is harder to establish precisely; it may have undisclosed mechanical issues, and depreciation is less predictable. Consequently, used car loan interest rates are higher than comparable new car loan rates from the same lender. Borrowers can narrow this gap by choosing newer pre-owned vehicles (under 3 years old) and maintaining a strong credit profile.
Your credit score can play a major role in the pre-owned car loan. Although this numerical evaluation of your credit history does not determine the interest rate in isolation, it can still have a significant impact. Applicants with scores above 750 are typically considered safe; thus, the lender offers the best possible deals. While scores between 700 and 749 may attract a moderate risk for the lender. Scores below 700 significantly narrow lender options and may result in higher rates or even application rejection. Improving your credit score before applying — by clearing existing dues, reducing credit card balances, and ensuring no EMI defaults in the preceding 12 months — is the most effective way to lower the interest rate on your used car loan.
| Type of Fee | Applicable Charges |
|---|---|
| Documentation Charges | This fee covers the cost of verifying your documents, completing necessary compliance checks, and conducting due diligence before your loan is disbursed. |
| Foreclosure charges |
|
| Statement of Accounts Charges |
|
| Loan Cancellation Charge | This is a charge applied if you request loan cancellation after the cooling-off period. |
| Valuation Charges | This is a charge applied to assess the current market value of an asset for loan processing. |
| Stamp Duty | This is a government-mandated fee required for legally registering your loan agreement. |
| NACH/PDC Charges | This is a charge applied when you use post-dated cheques (PDCs) or physical NACH forms instead of setting up an electronic mandate for EMI payments. |
| NOC for conversion of private to commercial registration | This is a charge applied for issuing a No Objection Certificate (NOC) required to convert and register your vehicle at RTO from private to commercial use. |
| Charges for Repossession of Vehicle | This is a charge applied when an asset is repossessed due to non-repayment of the loan. |
| PDD charges | This charge is applied for managing the Registration Certificate (RC), including document storage, administrative handling, and record management. |
| Charges for delay in RC hypothecation | This is a monthly charge applied when you fail to submit the Registration Certificate (RC) for hypothecation to the Registering Authority within 120 days from the date of loan disbursement. |
| Part- Prepayment Charges | This is a charge applied if you choose to repay part of your loan before the end of your loan tenure. |
| Switch Fee without any Top Up | This is a charge applied if you request a change or reduction in the interest rate on your existing Loan. |
| Broken Period Interest (BPI) | This interest is charged for the period between the loan disbursal date and the first EMI due date. At Actuals |
Note: GST, other government taxes and levies as applicable, will be payable on all fees and charges.
| Type of Fee | Applicable Charges |
|---|---|
| Penal Charges, if any, in case of delayed payments | This is a charge for late EMI payments, calculated based on the number of days your EMI remains unpaid. |
| 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 Rs. 600 per instrument per instance |
| Mandate Rejection Service Charge | Charges will be levied if new mandate form is not registered within 30 days from the date of rejection of previous mandate form by borrower’s bank for any reasons whatsoever. Tata Capital charges a nominal amount of Rs. 450. |
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.
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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.
Yes, you can get pre-approved for a used car loan and lock in your interest rate before finalizing your car. This helps you know your loan eligibility in advance and simplifies the purchase process. To apply for pre-approval:
Check for pre-approved loan offers on Tata Capital’s website and click “Apply Now”
Enter details such as mobile number and name verified by PAN
Provide your loan requirements along with personal and banking details
Complete a one-time eMandate authorization for EMI payment
Apply for insurance to safeguard your loan liabilities
Accept the E-Agreement, verify details, and receive instant loan disbursal
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, make, etc. Therefore, even if they reject your loan application, you'll not receive a refund for the processing fee.
If you want to foreclose or 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:
Within 12 months of the date of first disbursement: 6% on the principal outstanding
Yes, part-pre-payment charges apply if you repay a portion of your loan before the tenure ends. If done within 12 months from the first disbursement, the charge is 6% of the prepaid amount, and after 12 months, it is 5%.
No, you cannot prepay your used car loan without charges. Tata Capital applies part-pre-payment fees as follows:
You can get the lowest used car financing interest rate by maintaining a strong credit score, as lenders reward borrowers with good repayment history. Having a stable income, a low debt-to-income ratio, and longer work or business stability also helps. Additionally, choosing a shorter tenure, providing a higher down payment, and comparing offers from multiple lenders can further improve your chances of securing a lower interest rate.
The processing fee for a pre-owned car loan is a one-time charge applied during loan approval to cover documentation and administrative costs. At Tata Capital, the processing or documentation charges for a used car loan can be up to Rs. 1,999, payable at the time of loan disbursement.
Here are the eligibility criteria for availing a used car loan with Tata Capital:
For salaried individuals, you must be between 21 and 60 years of age, earn a minimum monthly salary of Rs. 25,000, and have at least one year of work experience.
For self-employed individuals, you must be between 21 and 65 years of age, with your business operating for at least two years, and have a minimum annual income of Rs. 3 lakhs.
For self-employed individuals in partnerships or others, the firm or individual partner must have an annual income of at least Rs. 3 lakhs, provide the last three months’ bank statements, and maintain an average bank balance of 0.5 times the EMI.
Salaried individuals do not get any tax exemptions for a used car loan. However, Section 80C of the Income Tax Act states that self-employed individuals who want to purchase a car for commercial purposes can get some relief from high-interest used car loans. 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.
We take 24-36 hours to process your application, from the completion of documentation to sanctioning the loan.
You can repay a used car loan in easy monthly installments to avoid compromising your savings. The EMI amount is calculated using the formula:
[ P x R x ( 1 + R ) ^ N ] / [ ( 1 + R ) ^ N - 1 ]
Where:
P stands for the principal amount,
R stands for the rate of interest, and
N stands for the tenure of the loan in months.
You can add the desired values in this formula to calculate used car interest rates manually. But this process can be time-consuming and complicated. For instant and accurate results, you can use a used car finance rate calculator.
No, your EMI remains the same for the life of the loan. However, we offer flexible solutions that are specifically designed to fit your unique second-hand car loan rate requirements.
You can calculate the used car loan interest rate using a simple mathematical formula:
[ P x R x ( 1 + R ) ^ N ] / [ ( 1 + R ) ^ N - 1 ]
Where:
P stands for the principal amount,
R stands for the rate of interest, and
N stands for the tenure of the loan in months.
You can add the desired values in this formula to calculate used car interest rates manually. But this process can be time-consuming and complicated. For instant and accurate results, you can use a used car finance rate calculator.
Yes, you can refinance your used car loan later to get better terms or reduce your financial burden. Refinancing is especially helpful in the following situations:
When interest rates have dropped
When you want to reduce your monthly EMIs
When you need a longer repayment tenure
When you want to switch lenders for better benefits
No, it is not mandatory to provide a guarantor when availing of a pre-owned car loan. However, if your credit profile is weak or your documents are insufficient, the lender may request one as added security.
No, you do not have to provide separate collateral or security for a used car loan, as the car you purchase is hypothecated to the lender until the loan is repaid.
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