22 September, 2025 | 11:54 IST
Buying a car is no longer a luxury these days; it's a necessity for many. As a result, most people often look for budget-friendly options, such as buying a used car. With this growing trend, used car loan interest rates have become a major consideration for potential buyers.
The overall financing cost for a pre-owned car could be significantly affected by the used car loan interest rate in India. So, if you are looking forward to availing a used car loan, it’s important to evaluate several key factors before borrowing.
Table of Contents
When you are looking to purchase a used car but don't have enough funds, you often turn to loans for financial support. So, the annual percentage rates charged by banks or non-banking financial companies on loans are known as used car loan interest rates.
So, this is a crucial factor, as it is the amount you will be paying on top of the loan amount over time.
Moneycontrol, in collaboration with 8 top lending partners, is offering personal loans of up to Rs 50 lakh. The application process is completely online—simply choose your EMI plan, provide your details, and finish the e-KYC. Interest rates start as low as 10.5% per annum. You can avail affordable personal loans as an alternative to used car personal loan.
The average used car loan interest in India in 2025 ranges between 6% and 26%. It depends on various factors such as the type of lender, your credit profile, the car's age and the loan amount. The interest rates on used car loans are slightly higher than the new car loan rates.
The interest rates on used car loans are a little bit higher because of the depreciation risk. The value of the second-hand car decreases with time, so if the borrower fails to repay the amount on time, then the lender will be able to recover less money from the sale.
In addition to this, interest rates are also charged based on the car's condition, such as age and mileage.
State Bank of India: The interest rate ranges from 11.75% to 15.25% per annum.
HDFC Bank: The interest rate varies between 14.50% and 17.50% per annum.
Axis Bank: The interest rate ranges between 10% and 15.55% per annum.
ICICI Bank: The interest rate starts from 11.25% per annum.
Bajaj Finserv: The interest rate starts from 10.75% per annum.
Hero FinCorp: The interest ranges between 12.50% and 26% per annum.
Mahindra Finance: The interest rate ranges from 6% to 26% per annum.
The person should be an Indian resident.
An age between 21 and 60 years.
Salaried or self-employed with a minimum of 1-2 years of stable income.
Credit score preferably above 700.
You can check your eligibility for a loan to buy a used car at an affordable interest rate through Moneycontrol app and website. Moneycontrol offers access to multiple personal loans up to Rs 50 lakhs in partnership with 8 lenders. The process is quick and entirely online. You just need to set your EMI payment, fill in basic details and complete e-KYC. Interest rates start at just 10.5% per annum.
1. Compare loan offers, such as interest rates, processing fees, tenures, and repayment flexibility, by researching different loan providers.
2. Upload documents such as identity proof, address proof, and income proof.
3. Submit the application by filling out the form or by visiting in person.
4. The lender will verify the documents.
5. If the verification is successful, then the loan amount will be credited to your bank account.
Choosing a used car loan interest rate can be a smart and budget-friendly option. The interest rates vary across different banks and NBFCs and depend on your credit score, car age, mileage and repayment tenure. It is necessary for you to meet the eligibility criteria and have the necessary documents ready to avoid delays.
Share it in your circle
Table of Contents
Explore Top Lenders for Instant Loan upto
Get Instant Loan up to ₹50 Lakhs with Zero Paperwork from Top Lenders
100% Digital
Quick Disbursal
Low Interest Rates
