So what if you can’t bring home the all-new car model. You have a bundle of used cars to pick from and drive your city crazy. And, if you think used cars do not attract a loan from the lenders, the growing second-hand vehicle finance from banks and other financial institutions would break the myth and bring a smile on your face.
Lenders from State Bank of India (SBI) to Bank of India (BOI) are all waiting for your used car loan application to reach their desk. Since it is a loan, you would need to compare the offers in terms of loan amount, interest rate and others.
SBI used car loan could well be a pick of the most because the lender has a massive presence across the country with a robust branch and ATM network of 24,000 and 59,000, respectively. However, it won’t be bad if you compare SBI with its competitors to get a feel of the used car finance market in general. Also, it would help you to choose the right option.
SBI Used Car Loan at a Glance
SBI provides a loan to buy a used car of not above 5 years of age. From passenger cars to sports utility vehicles (SUVs), SBI has a loan to buy a second-hand model of your choice. The loan, which can be granted for as long as 5 years, is ascertained at 80% of the valuation amount of the concerned vehicle. The remaining portion has to be paid upfront by a borrower. But where the hawk eye remains, is the interest rate charged by a lender. SBI disburses a loan for used models at 12.65%, which is 4.65% above 1-year MCLR of 8%. The loan offer can be availed by both salaried and self-employed.
Now as you got a brief of SBI used car loan, let’s find out the offers of others who are doing the rounds in the car finance space.
What to Expect from HDFC on Used Car Finance?
While applying for a used car loan at HDFC Bank, make sure the age of the vehicle won’t cross 10 years by the time the tenure gets over. The maximum loan tenure offered for a second-hand vehicle loan is 5 years at HDFC. What differentiates HDFC Bank from many in the group is its ability to pay as much as 100% of the value of the vehicle. Rarely you see a lender offering to that extent. The interest rate, on the other hand, stands at 11.50%-17.50% per annum.
Where Does ICICI Bank Stand in Second-hand Car Loan?
ICICI Bank, another top lender with a wide presence across the country, comes with a used car loan offer for a maximum period of 5 years. The loan amount can be upto 80% of the value of the second-hand model. The interest rate for the loan type stands at 15.50% per annum.
Does Axis Bank Throw Any Competition to SBI in Second-hand Car Finance?
With regards to the extent of finance, Axis Bank provides a loan of upto 90% of the valuation of the used model. The interest rate on a loan, which can be granted for a maximum of 5 years, ranges from 14.50%-16.25% p.a.
What About Kotak Mahindra Bank on Used Car Loan Front?
Kotak Mahindra Bank, one of the premier vehicle finance companies in India, offers a second-hand car loan at 15%-21% interest rate. The loan, which is limited to 90% of the valuation of the used vehicle, can be given for a maximum period of 5 years.
Does BOI Deserve to Stay in the Race of Top Used Car Loan Lenders in India?
Bank of India, like its contemporaries, also offer a loan for old cars. The loan, which is limited to 70% of the valuation of the used vehicle, comes at an interest rate of 9.25% per annum. But unlike most which offer the loan for a maximum of 5 years, BOI grants the same for only 3 years.
In our observation to used car loan offers, it is found that SBI beats all in terms of interest rates, barring BOI. The maximum loan amount also is a good one at 80% of the vehicle’s value. But it falls short of the private counterparts like HDFC Bank, Axis Bank and Kotak Mahindra Bank. So, if you need a less amount of loan to buy an old car, SBI could well be the bank you should look to apply at. But if the loan offer from SBI falls well short of the requirement, choosing another lender for a maximum finance at a reasonable interest rate should be your top consideration.
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