New Delhi: In India, several banks and lending companies offer loans on cars, both new and second-hand. However, the difference in the interest rates of new and second-hand car loans is sometimes so huge that it becomes a differentiating factor.
In the case of Axis Bank, the private lender is offering an interest rate of 8.65%-10.9% for a new car while there’s a 14.4%-16.4% on loans on second-hand cars. The difference, in this case, is over 5%.
However, a few state-owned banks, including Canara Bank, Bank of India and Union Bank, are offering lower interest rates on pre-owned cars. The interest rates offered by these banks are quite attractive in comparison to other private and public sector banks. Also Read: 3 banks are offering unlimited free ATM transactions across India, check details
Banks offering the lowest interest rate on second-hand cars
- Canara Bank is offering the lowest interest rate of used car loans at 7.3%-9.9%.
- Bank of India is offering a loan on pre-owned cars at 7.35%-8.55%
- Union Bank is offering loan on used cars at an interest rate of 8.9%-10.5%
Private Banks: Lowest interest rates on pre-owned cars
- South Indian Bank is offering loans on a used car at an interest rate of 13.3%-13.75%.
- HDFC Bank is charging an interest rate of 13.75%-16%.
- Federal Bank is currently offering loans at a 13.8% interest rate.
In terms of time frames, most of the banks and lending companies offer a maximum tenure of five years on pre-owned cars. However, HDFC Bank is offering a maximum tenure of seven years while Bank of India’s loan comes with a minimum tenure of three years. Also Read: PF advance needed? Here’s how to check account balance via missed call or SMS