Used car loan interest ratesUnderstand the finer details

When it comes to financing a used car, understanding the interest rates and associated fees is crucial for making informed financial decisions. At Cars24, we offer competitive interest rates and transparent fee structures to help you get behind the wheel of your dream car.

We’ve broken down the pre- and post-sales charges you can expect when applying/availing of a used car loan.

Pre-sales charges

These are expenses and fees that are incurred before the actual sale or purchase of a vehicle. These charges typically include costs associated with the assessment, documentation, and processing of the transaction. Some common pre-sales charges in the context of buying a car or obtaining a car loan include:

ChargesDetails

Interest Rates 12% p.a onwards (reducing)

Processing Fees 2.5% of the loan amount onwards

Car Health Monitor (“CHM”) Charges ₹4,300 onwards

Documentation Fees & Stamp Duty Charges ₹2,500 onwards

Pre-Closure Charges 5% of the outstanding loan amount

Pre-Closure Letter Charges ₹500 per instance

Loan Insurance Charges As per actuals

Motor Insurance Charges As per actuals

Post-sales charges

These refer to the expenses and fees incurred after the sale or purchase of a vehicle has been completed. These charges may involve various aspects such as ongoing maintenance, taxes, and other costs that arise during or after the vehicle ownership period. Common post-sales charges typically include:

ChargesDetails

Penal/Default Interest Up to ₹5,000 per instance

Deal Cancellation Charges ₹5,000 (Post loan agreement is executed and pre-disbursal of the Loan)

Statement of Account Charges Free of cost once in a month, any additional SOA request would invite charges of ₹500 per instance

Loan Rescheduling/Rebooking Charges ₹1,000 per instance

Document/Information Default ₹500 per instance

Non Objection Certificate upon Loan Closure ₹1,000 per instance

No Objection Certificate for conversion from Petrol to LPG/CNG & vice-versa thereof ₹5,000 per instance

Any Duplicate NOC ₹1,000 per instance

Any car-related Value Added Service As per actuals

In case of the event of cancellation, interest charges will be borne by the customer. Processing fees, stamp duty, documentation, valuation, and RTO charges are non-refundable charges and would not be waived/refunded in case of loan cancellation. Loan cancellation is allowed within 15 days from the date of loan disbursal.

Collection and legal charges

ChargesDetails

Penal/Default Interest 0.1% per day of the outstanding loan amount i.e. EMI due but not paid (per instance)

Bounce/Swapping Charges in relation to Cheque/Standing Instruction/ECS/any other payment instruction provided by the Borrower ₹1,000 per instance

Late Payment Charges ₹250 per instance

Collection Visit Charges ₹500 per instance

Legal Notice Charge ₹5,000 per instance

Arbitration Charges ₹10,000

Repossession Charges ₹25,000

Note: Charges above are exclusive of GST wherever applicable (unless specified otherwise). The above schedule of charges is subject to revision as per the company's discretion.

Miscellaneous charges & fees

There are certain miscellaneous charges and fees that may apply during a used car loan process. Some of these charges have been listed below.

Credit report charges

Some lenders might charge a fee to obtain your credit report, which is used to assess your creditworthiness

Change in loan terms

Making changes to the loan terms, such as the tenure or interest rate, may incur administrative charges

EMI bounce charges

In case your Equated Monthly Instalment (EMI) payment bounces due to insufficient funds, you may incur a fee

Loan agreement charges

The preparation and notarization of the loan agreement can involve fees

Overdue EMI charges

If you miss an EMI payment, there may be a penalty charge applied for each day the payment is overdue

Late payment fees

EMI payments beyond the grace period may result in late payment fees

Foreclosure charges

If you decide to repay your loan before the agreed-upon tenure, you might face foreclosure charges. These charges are typically a percentage of the outstanding loan amount

It's crucial to thoroughly review the terms and conditions provided by your lender to understand any additional charges that may apply. Cars24 is committed to transparency and will provide you with a clear breakdown of all charges associated with your used car loan.

Features and benefits of Cars24's used car loans

When you choose Cars24 for your used car financing needs, you can expect a range of features and benefits, including:

Competitive interest rates

Cars24 offers competitive interest rates to make your used car loan more affordable

Transparent terms

We believe in transparency, and our loan terms are easy to understand, ensuring there are no hidden surprises

Customised loan options

We provide flexible loan options tailored to your financial situation, with varying tenures and repayment structures

No hidden charges

At Cars24, we are committed to providing you with a comprehensive understanding of all associated charges and fees, so you know exactly what you're getting into

Quick and easy application

Our online application process is straightforward and hassle-free, allowing you to apply for a loan from the comfort of your home

High Loan-to-Value ratio

We offer a high Loan-to-Value (LTV) ratio, which means you can finance a significant portion of your used car's cost

Fast loan approval

We understand the urgency of car purchases. That's why we strive for swift loan approval, so you can acquire your dream car without delay

Factors affecting used car loan interest rates

Several factors can influence the interest rates for a used car loan:

Credit score

Your credit score plays a significant role. A higher credit score often results in a lower interest rate

Economic conditions

The overall economic climate and market conditions can impact interest rates

Loan amount

The amount you borrow can affect the interest rate. Larger loans may have different rates

Lender's policies

Different lenders have different policies and may offer varying interest rates

Loan tenure

The length of your loan term can impact your interest rate. Shorter terms often come with lower rates

Loan-to-Value ratio

A higher Loan-to-Value (LTV) ratio may result in a higher interest rate

Type of car

The make and model of the used car you intend to purchase can influence your interest rate

Frequently asked questions

Frequently Asked Questions

Can I negotiate the interest rate?

Yes, you can often negotiate the interest rate on your used car loan. Your ability to negotiate may depend on factors such as your creditworthiness, the lender's policies, and current market conditions. It's advisable to compare offers from multiple lenders and leverage your credit history to secure the best possible interest rate.

Are there any additional fees associated with the interest rate?

While the interest rate is a significant component of your loan cost, there may be additional fees associated with it. These can include processing fees, documentation charges, and other miscellaneous fees. It's crucial to review the loan agreement carefully to understand the complete cost structure.

How can I estimate my monthly payments based on the interest rate?

You can easily estimate your monthly payments using an EMI calculator. Input the loan amount, tenure, and interest rate into the calculator, and it will provide you with the exact amount you need to pay each month. This tool is a handy resource to plan your finances effectively.

What is the average interest rate for a used car loan?

The average interest rate for a used car loan can vary depending on factors such as your credit score, the lender, and the prevailing economic conditions. On average, used car loan interest rates typically range from 10% to 15%, but they can be higher or lower based on individual circumstances.

What is the impact of the age of the car on the interest rate?

The age of the car can significantly affect the interest rate. Generally, older cars might come with higher interest rates as they are perceived as higher-risk investments for lenders. Newer cars often attract lower interest rates due to their lower depreciation and typically better condition.

Is it mandatory to provide a guarantor when I avail a used car loan?

Whether or not you need a guarantor for a used car loan depends on your individual financial situation and the lender's policies. You may require a guarantor if your credit history is not strong or if the loan amount is substantial.

Can we reduce the car loan interest rate?

You may have the opportunity to reduce your car loan interest rate by taking certain actions:

Improve Your Credit Score: Maintaining a good credit score can help you qualify for lower interest rates.
Leverage a Co-borrower: Adding a co-borrower with a strong credit history can improve your chances of securing a lower interest rate.

Pre-sales charges

ChargesDetails

Interest Rates 12% p.a onwards (reducing)

Processing Fees 2.5% of the loan amount onwards

Car Health Monitor (“CHM”) Charges ₹4,300 onwards

Documentation Fees & Stamp Duty Charges ₹2,500 onwards

Pre-Closure Charges 5% of the outstanding loan amount

Pre-Closure Letter Charges ₹500 per instance

Loan Insurance Charges As per actuals

Motor Insurance Charges As per actuals

Post-sales charges

ChargesDetails

Penal/Default Interest Up to ₹5,000 per instance

Deal Cancellation Charges ₹5,000 (Post loan agreement is executed and pre-disbursal of the Loan)

Statement of Account Charges Free of cost once in a month, any additional SOA request would invite charges of ₹500 per instance

Loan Rescheduling/Rebooking Charges ₹1,000 per instance

Document/Information Default ₹500 per instance

Non Objection Certificate upon Loan Closure ₹1,000 per instance

No Objection Certificate for conversion from Petrol to LPG/CNG & vice-versa thereof ₹5,000 per instance

Any Duplicate NOC ₹1,000 per instance

Any car-related Value Added Service As per actuals

Collection and legal charges

ChargesDetails

Penal/Default Interest 0.1% per day of the outstanding loan amount i.e. EMI due but not paid (per instance)

Bounce/Swapping Charges in relation to Cheque/Standing Instruction/ECS/any other payment instruction provided by the Borrower ₹1,000 per instance

Late Payment Charges ₹250 per instance

Collection Visit Charges ₹500 per instance

Legal Notice Charge ₹5,000 per instance

Arbitration Charges ₹10,000

Repossession Charges ₹25,000

Note: Charges above are exclusive of GST wherever applicable (unless specified otherwise). The above schedule of charges is subject to revision as per the company's discretion.

Miscellaneous charges & fees

There are certain miscellaneous charges and fees that may apply during a used car loan process. Some of these charges have been listed below.

Credit report charges

Some lenders might charge a fee to obtain your credit report, which is used to assess your creditworthiness

Change in loan terms

Making changes to the loan terms, such as the tenure or interest rate, may incur administrative charges

EMI bounce charges

In case your Equated Monthly Instalment (EMI) payment bounces due to insufficient funds, you may incur a fee

Loan agreement charges

The preparation and notarization of the loan agreement can involve fees

Overdue EMI charges

If you miss an EMI payment, there may be a penalty charge applied for each day the payment is overdue

Late payment fees

EMI payments beyond the grace period may result in late payment fees

Foreclosure charges

If you decide to repay your loan before the agreed-upon tenure, you might face foreclosure charges. These charges are typically a percentage of the outstanding loan amount

Features and benefits of Cars24's used car loans

When you choose Cars24 for your used car financing needs, you can expect a range of features and benefits, including:

Competitive interest rates

Cars24 offers competitive interest rates to make your used car loan more affordable

Transparent terms

We believe in transparency, and our loan terms are easy to understand, ensuring there are no hidden surprises

Customised loan options

We provide flexible loan options tailored to your financial situation, with varying tenures and repayment structures

No hidden charges

At Cars24, we are committed to providing you with a comprehensive understanding of all associated charges and fees, so you know exactly what you're getting into

Quick and easy application

Our online application process is straightforward and hassle-free, allowing you to apply for a loan from the comfort of your home

High Loan-to-Value ratio

We offer a high Loan-to-Value (LTV) ratio, which means you can finance a significant portion of your used car's cost

Fast loan approval

We understand the urgency of car purchases. That's why we strive for swift loan approval, so you can acquire your dream car without delay

Factors affecting used car loan interest rates

Several factors can influence the interest rates for a used car loan:

Credit score

Your credit score plays a significant role. A higher credit score often results in a lower interest rate

Economic conditions

The overall economic climate and market conditions can impact interest rates

Loan amount

The amount you borrow can affect the interest rate. Larger loans may have different rates

Lender's policies

Different lenders have different policies and may offer varying interest rates

Loan tenure

The length of your loan term can impact your interest rate. Shorter terms often come with lower rates

Loan-to-Value ratio

A higher Loan-to-Value (LTV) ratio may result in a higher interest rate

Type of car

The make and model of the used car you intend to purchase can influence your interest rate

Frequently Asked Questions

Can I negotiate the interest rate?

Are there any additional fees associated with the interest rate?

How can I estimate my monthly payments based on the interest rate?

What is the average interest rate for a used car loan?

What is the impact of the age of the car on the interest rate?

Is it mandatory to provide a guarantor when I avail a used car loan?

Can we reduce the car loan interest rate?

You may have the opportunity to reduce your car loan interest rate by taking certain actions:

Improve Your Credit Score: Maintaining a good credit score can help you qualify for lower interest rates.
Leverage a Co-borrower: Adding a co-borrower with a strong credit history can improve your chances of securing a lower interest rate.