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Used Car Loan Interest Rate (Jan 2026)
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.
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:
Here's what you have to pay:
| Sr. No. | Type | Charges |
|---|---|---|
| 1 | Cheque/ECS/NACH Bounce / Instrument Return | ₹339/- per instance |
| 2 | Cheque / Instrument Swap | ₹500/- per instance |
| 3 | Duplicate Statement Issuance | ₹250/- per instance |
| 4 | Duplicate Repayment Schedule Issuance | ₹250/- per instance |
| 5 | Duplicate No Dues Certificate / NOC | ₹50/- per instance |
| 6 | Penal Interest | 2% per month |
| 7 | Loan Cancellation / Re-booking | ₹550/- per case |
| 8 | Foreclosure Charges |
|
| 9 | Part-payment Charges |
|
| 10 | Stamp Duty | At actuals |
| 11 | Issuance of Credit Report | ₹50/- per instance |
| 12 | Documentation Charge | ₹700/- |
| 13 | Registration Certification Collection | ₹250/- per instance |
| 14 | Valuation Charges | ₹590/- (inclusive of GST) ₹1,180/- (inclusive of GST) if the loan amount is >=25 lacs |
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.
Already Applied? Track your application here
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Track NowFrequently 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.
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