Used Car Loan Interest Rate (July 2026)

Q: How do you calculate a Used Car Loan interest rate?

The rate can be calculated using an EMI calculator available on the lender's website, incorporating your loan amount, tenure and applicable interest rate.

Car Loans for a used vehicle can offer you the financial flexibility to purchase your ideal car without the hefty price tag of a new one. Understanding the Interest Rate of a Used Car Loan is crucial to making an informed decision. With options aplenty, getting familiar with these rates and related charges can lead to substantial savings.

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Used Car Loan Interest Rates & Charges

You can avail a loan for purchasing an used car, where Axis Bank offers up to 100% of the car’s valuation as loan. If you take a car loan, the car acts as collateral, and you need to make regular EMIs to repay the loan within tenure.

Loan Tenure	3 Yr MCLR	Spread over MCLR	Effective ROI Range	Reset	Processing Fee	Documentation Charges
Up to 36 months	8.85%	4.10% - 5.70%	12.95% -14.55%	No reset	1% + GST of loan amount or ₹6000, whichever is higher	₹700
Above 36 months	-	-	12.95% -14.55%	-	1% + GST of loan amount or ₹6000, whichever is higher	₹700

Used Car Loan Charges

Here is a summary of the charges associated with a used car loan:

Used Car Loan Charges

Here is a summary of the charges associated with a used car loan:

Sr. no	Type	Charges
1	Repayment Instruction/instrument Return Charges	₹500 per instance + GST as applicable
2	Duplicate Statement Issuance Charges	₹250 per instance + GST as applicable
3	Duplicate Repayment Schedule Issuance Charges	₹250 per instance + GST as applicable
4	Duplicate No Dues Certificate / NOC	₹250 per instance + GST as applicable
5	Loan Cancellation / Booking Charges	₹ 550/- per case + GST as applicable
6	Stamp Duty	At Actuals
7	Issuance of Credit Report	₹50/- per Instance + GST as applicable
8	Service Charge/ Processing fees	Up to 2% of the loan amount + GST as applicable
9	Penal Charges (No GST)	^Financial Default: 8% p.a. on the overdue amount (subject to aggregate penal charges not exceeding ₹1,00,000 (INR One lakh) per instance), subject to minimum of ₹300. There shall be no capitalisation of Penal Charges. In addition to the penal charge, the borrower will be required to pay the regular interest on overdue EMI / overdue interest/overdue principal which would be charged at contracted or applicable interest rate for the days it remains overdue.
10	Material Terms & Conditions	Financial Default: 1. Non-payment Of interest / installment on due date 2. Financial Default also includes all types of payment or financial defaults/irregularities with respect to the Loan Account
11	Cheque Swapping Charges	₹500 per instance + GST as applicable
12	Documentation Charges	₹700/- + GST as applicable
13	Registration Certificate Collection Charges	₹600/- per Instance + GST as applicable
14	ROC Charge Creation Fee	₹2500/- per Instance + GST as applicable
15	Foreclosure Charges	5% Of the Principal Outstanding + GST as applicable. Foreclosure charges are not applicable for fixed rate loans up to ₹ 50 lakhs to Micro and Small Enterprise (MSE). No Lock-in period for foreclosing the loan
16	Part-Payment Charges	5% on the amount being prepaid + GST as applicable. Part Payment charges are not applicable for fixed rate loans up to ₹ 50 lakhs to Micro and Small Enterprise (MSE). No Lock-in period for making part payment of the loan
17	Valuation Charges (Applicable for Used Car Only)	₹ 750/- per Instance + GST as applicable

Note: All of the above charges are subject to change as per the Bank's discretion from time to time

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Factors affecting Used Car Loan interest rates

CIBIL score

A robust CIBIL score, typically above 750, can position you as a low-risk borrower, potentially unlocking better Used Car Loan rate offers.

Debt-to-income ratio

Keeping this ratio low indicates that you're not over-leveraged, making you a more attractive candidate for lower second-hand car interest rates.

Income

Consistent and high income not only solidifies your ability to repay, but it could also give you the leverage to negotiate Used Car Auto Loan interest rates.

Occupation

Lenders often consider government and public sector employees as less risky, which could translate to more favourable Used Auto Loan interest rates.

Relationship with the lender

Long-term customers who have maintained good financial dealings can often enjoy reduced Used Car Auto Loan rates due to established trust.

How to apply for a Used Car Loan

Securing second hand car loan rates involves a few key steps:

01
Gather all required documentation, including proof of income, identity, and address.
02
Apply for the loan either through the Axis Bank's online portal or by visiting a branch in person.
03
Fill out the application form with accurate details to expedite the approval process.
04
Submit your application and wait for the lender to review it.
05
Once approved, review the loan agreement carefully before accepting the terms.
06
Upon acceptance, the loan amount will be disbursed to you so you can purchase your vehicle.

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Frequently Asked Questions

The processing fee is ₹6,000 or 1% of the loan amount, whichever is higher.

Yes, part-prepayment incurs a charge of 5% of the principal outstanding.

Foreclosure charges are also 5% of the principal outstanding.

The interest rate ranges from 12.95% to 14.55% p.a., depending on the loan tenure.

The rate can be calculated using an Car Loan EMI Calculator available on the lender's website, incorporating your loan amount, tenure and applicable interest rate.