Used car loan rates, tenure, fees and prepayment by loan provider
Each row is taken from the loan provider's own website. A blank means the loan provider does not publish that figure on the page we checked.
| Loan provider | Published rate | Maximum tenure | Processing fee | Prepayment / foreclosure | Source |
|---|---|---|---|---|---|
| Axis BankPrivate bank | Not published | Up to 60 months (per Axis Bank calculator) | Not published | Not published | axis.bank.in |
| Bajaj FinanceNBFC | 10% - 18.25% p.a. | 12-84 months | Up to 2.95% of loan amount (incl. taxes) | Foreclosure up to 4.72% (incl. taxes) of outstanding; part-prepayment up to 4.72% of principal prepaid | bajajfinserv.in bajajfinserv.in |
| Bank of BarodaPublic sector bank | Floating 10.20% - 12.95%; fixed 11.90% - 14.65% | 60 months (vehicle age + tenure max 96 months) | 0.50% of loan + GST (min Rs 2,500, max Rs 10,000) | Floating: nil; fixed: 2% + GST within 2 years above Rs 40,000 | bankofbaroda.bank.in |
| Canara BankPublic sector bank | Not published | 60 months | 0.25% (min ₹1,000, max ₹5,000) + GST | No pre-payment penalty | canarabank.bank.in |
| CholaNBFC | 15% - 28% p.a. | 5 years | 0.5% - 3.25% + sourcing fee Rs 1,000 - 2,500 | Full closure: 5% of principal outstanding (7-12 months from agreement), 4% after 12 months, plus GST | cholamandalam.com files.cholamandalam.com |
| Federal BankPrivate bank | 10.15% - 14.00% | 60 months | 1% of loan (min ₹5,000, max ₹2,50,000) | Nil | federal.bank.in federal.bank.in |
| HDFC BankPrivate bank | 9.50% - 17.00% | Not published | Up to 1% of loan (min Rs 3,500, max Rs 9,000) | Full pre-closure: 6% within 1 year, 5% in months 13-24, 3% after 24 months | hdfc.bank.in |
| Hero FinCorpNBFC | 11.5% - 26% p.a. | 60 months | Up to 4% | 5% of principal outstanding, plus up to 6 months' interest if foreclosed within 6 months of disbursal | herofincorp.com herofincorp.com |
| ICICI BankPrivate bank | From 9.75%; Q1 FY27 disbursed range 9.75% - 16.90% | Up to 84 months | 2% of loan, max Rs 20,000 + GST | Same schedule as new car loan (per service-charges page) | icici.bank.in icici.bank.in |
| IDFC FIRST BankPrivate bank | From 11.99% | 7 years (repurchase) | Up to 5% of loan amount (incl. GST) | 5% of principal outstanding + GST; part-payment 5% + GST | idfcfirst.bank.in idfcfirst.bank.in |
| IndusInd BankPrivate bank | Not published | 84 months* | Not published | Not published | indusind.bank.in |
| Mahindra FinanceNBFC | 8% - 25% p.a. | 5 years | Up to 2% of sanction amount | 6% of principal outstanding in first 24 months, 3% thereafter; part-payment 5% (13-24 months) / 3% (after 24 months) | mahindrafinance.com media.mahindrafinance.com |
| Punjab National BankPublic sector bank | From 9.45% floating / 10.45% fixed | 60 months | Not published | Floating: nil; fixed: 2% on amount prepaid | pnb.bank.in pnb.bank.in |
| SBIPublic sector bank | 10.45% - 15.60% | Up to 5 years (10 years minus vehicle age) | 1.50% of loan + GST (min Rs 3,000, max Rs 10,000 + GST) | Not published | sbi.bank.in sbi.bank.in |
| Tata CapitalNBFC | From 10.49% p.a. | 72 months | Up to 2.95% of loan amount | 6% of principal outstanding within 12 months; 5% after 12 months (same for part-prepayment) | tatacapital.com tatacapital.com |
| TVS CreditNBFC | Up to 30% p.a. | 12-60 months | Up to 5.9% (schedule of charges) | 6.5% of principal outstanding up to 12 months; 6% for 12-24 months; 5.5% after 24 months | tvscredit.com tvscredit.com |
| Union Bank of IndiaPublic sector bank | 11.60% - 11.70% | Not published | Flat ₹1,000 | No foreclosure/prepayment penalty on floating-rate individual loans | unionbankofindia.bank.in unionbankofindia.bank.in |
| Yes BankPrivate bank | Not published | Not published | Not published | Not published | yes.bank.in |
Checked 4 October 2026 on each loan provider's own website. "Not published" means the loan provider does not show that figure on the page we checked. We never estimate one. A starting rate is the best case, not the rate you will necessarily be offered.
What decides the rate you get
The published rate is where a loan provider starts. Your rate is set by your credit score and history, income and job type, the loan amount and tenure, the age and make of the car, the loan provider's own cost of funds and appetite for used-car risk, and whether the rate is fixed or floating. Banks usually price lower than NBFCs, and NBFCs often approve profiles banks decline, at a higher price. A relationship with the bank, such as a salary account, can also help.
Fixed or floating rate
Most car loans are priced at a fixed rate, so the EMI stays the same for the whole tenure. A floating rate moves with the loan provider's benchmark. The difference matters at closing: RBI's directions that took effect on 1 January 2026 bar prepayment charges on floating-rate loans to individuals for non-business purposes, while fixed-rate loans fall under the loan provider's own policy. See closing a used car loan early.
Compare the APR, not just the rate
Two loans with the same interest rate can cost different amounts because of fees. The annual percentage rate (APR) folds the processing fee and other charges into one yearly figure. RBI requires loan providers to give you a Key Fact Statement before you sign, showing the rate, the fees, the APR and the total you will repay. Ask for it from every loan provider you are considering and compare those, not the advertised rates. Used car loan fees and charges lists what to expect.
Ways to pay less
- Check your credit report and fix errors before applying.
- Make a larger down payment so the loan provider finances less.
- Choose a shorter tenure if the EMI is comfortable. You pay less interest overall.
- Ask your own bank first. Existing customers sometimes get a better quote.
- Negotiate the processing fee, which is often more flexible than the rate.
- Compare two or three loan providers with the bank comparison tool or vehicle loan comparisons.
Frequently asked questions
Which bank has the lowest used car loan interest rate?
Among the loan providers on this page, Mahindra Finance publishes the lowest starting rate at 8%. That is a starting rate, not a guarantee. Your offered rate depends on your credit profile, the car and the loan provider. Checked 12 October 2026.
Is the used car loan rate higher than a new car loan rate?
Usually, yes. The loan provider is pricing the extra risk of an older car, so check the rate and the total cost in the Key Fact Statement rather than assuming.
Are used car loans fixed or floating rate?
Many are fixed-rate, which keeps the EMI constant. Floating-rate loans move with the loan provider's benchmark. Ask which applies to your offer.
Does the car's age change the rate?
It can. Older cars are riskier for the loan provider, so the rate can be higher and the tenure shorter. Ask for the rate for your specific car.
KhatuLoans is not a loan provider and is not paid by the loan providers named here to rank them. Rates, fees and eligibility change; always confirm with the loan provider. Read our editorial policy and how we make money.