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Car & Vehicle Loan

Second-Hand Car Loan Interest Rates: Bank-Wise and by Credit Score

Used car loans at major banks cost about 9.45% to 15.60% in September 2026; HDFC Bank's borrowers paid 13.51% on average in Apr–Jun 2026.

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Written by Priya Nair

Updated on 17 September 2026·6 min read

On this page9 sections
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Used car loan interest rates at major Indian banks run from about 9.45% to 15.60% a year in September 2026, and your credit score decides where you land in that range. HDFC Bank says its used car borrowers actually paid between 9.50% and 17.00%, averaging 13.51%, in April–June 2026. Used cars cost more to finance than new ones: SBI’s new car loans start at 8.40%.

Key facts

Item Position on 17 September 2026
Lowest bank card rate found 9.45% floating, Punjab National Bank, CIBIL 750 or above
Typical rate actually charged 13.51% average at HDFC Bank, April–June 2026
Loan against value of the car 75% to 100% of valuation, by lender
Maximum tenure 5 years at SBI and Bank of Baroda; HDFC Bank lists up to 84 months
Processing fee 0.50% to 1% of the loan at these banks, with minimums and caps; up to 2% in Axis Bank’s general charges
Valuation fee ₹750 per case at HDFC Bank and Axis Bank
Foreclosure charge 5% of principal at Axis Bank, and at HDFC Bank for loans taken from 1 December 2025
RBI repo rate 5.25%; next policy meeting 5–7 October 2026

Second-hand car loan interest rates by bank

Bank Used car loan rate Rate type Processing fee
Punjab National Bank 9.45% to 10.55% Floating (fixed: 10.45% to 11.55%) Check with bank
Bank of Baroda 10.65% to 13.40% Floating (fixed: 11.90% to 14.65%) 0.50%, min ₹2,500, max ₹10,000 + GST
State Bank of India 10.45% to 15.60% Fixed, linked to 1-year MCLR of 8.70% See SBI fee schedule
HDFC Bank Rack rate 11.25% onwards; 9.50% to 17.00% charged in Apr–Jun 2026 Fixed Up to 1%, min ₹3,500, max ₹9,000
Axis Bank 12.95% to 14.55% Fixed, no reset 1% + GST or ₹6,000, whichever is higher

Rates are from each bank’s own page, checked 17 September 2026. Bank of Baroda adds 0.05% if you skip its group credit life insurance. HDFC Bank’s product page also advertises rates “starting @8.15%”, which is below the range its rate page reports for loans actually given, so ask for your own quote. For new car rates, see our car loan interest rates page.

Used car loan rates based on credit score

Two banks publish how the score moves the rate. PNB’s old car loan table is the clearest:

CIBIL score (PNB) Floating rate Fixed rate
750 and above 9.45% 10.45%
700 to 749 10.05% 11.05%
681 to 699 10.55% 11.55%

PNB gives women borrowers and PNB Pride customers (government, defence and PSU employees and pensioners) the 9.45% rate whatever their score. SBI says its 10.45% to 15.60% range for certified pre-owned cars is based on credit bureau scores, without publishing the bands. A score of 750 or more usually gets you near the bottom of a bank’s range. Our page on the credit score needed for a car loan explains how lenders read it.

What a used car loan costs

On a ₹5 lakh loan over 5 years, the rate changes the total interest by more than ₹1 lakh:

Rate Monthly EMI Total interest
9.45% ₹10,489 ₹1,29,323
10.45% ₹10,735 ₹1,44,074
13.51% ₹11,507 ₹1,90,450
17.00% ₹12,426 ₹2,45,577

A longer term cuts the EMI but adds interest. At 13.51%, stretching ₹5 lakh to 72 months lowers the EMI to ₹10,172 but raises total interest to ₹2,32,394. Few banks lend that long on a used car: SBI and Bank of Baroda cap the term at 5 years. Run your own numbers in the EMI calculator.

Used car finance fees

ItemDetails
Processing feeHDFC Bank up to 1% (₹3,500 to ₹9,000); Axis Bank 1% + GST or ₹6,000, whichever is higher; Bank of Baroda 0.50% (₹2,500 to ₹10,000 + GST).
Valuation₹750 per case at HDFC Bank and Axis Bank (plus GST at Axis).
Documentation₹700 at both HDFC Bank and Axis Bank.
RC collection₹600 per case at both.
Bounced EMI₹450 at HDFC Bank; ₹500 + GST at Axis Bank.
Stamp duty and RTO transferat actuals, as set by your state.
ForeclosureAxis Bank 5% of principal outstanding. HDFC Bank charges 5% on loans taken from 1 December 2025; older loans pay 6%, 5% or 3% depending on how long the loan has run.
Late paymentAxis Bank charges a penal 8% a year on the overdue amount, minimum ₹300. HDFC Bank charges interest at the loan rate for the days an EMI is late.

RBI’s rule against prepayment charges covers floating-rate loans to individuals. Most used car loans are fixed-rate, so the charges above apply; a floating-rate loan such as PNB’s or Bank of Baroda’s is worth asking about if you plan to repay early.

Eligibility and limits at a glance

Bank Loan against car value Term and car age Borrower age
SBI 85% of valuation; ₹2 lakh to ₹150 lakh 10 years minus the car’s age, maximum 5 years 21 to 67; repaid before 70
Bank of Baroda 75% of market or agreement value, or 100% of IDV, whichever is less; ₹2 lakh to ₹50 lakh Up to 60 months; term plus car age not over 96 months 21 to 70 at loan end
HDFC Bank Up to 100% of the car’s value; up to ₹2.5 crore Car no older than 10 years at loan end Check with bank

SBI asks for a net annual income of ₹3 lakh or more. For more on the product, see our used car loans guide.

How to get a lower rate

  1. Check your CIBIL score and fix any errors before you apply.
  2. Ask your own bank first; HDFC Bank, for one, offers preferential pricing to existing customers.
  3. Choose a newer car, since age limits cut the term you can get.
  4. Pay a larger down payment to borrow less.
  5. Get written quotes from two or three lenders and compare them with all fees added, not the headline rate alone.

Frequently asked questions

What is the interest rate on a second-hand car loan?

At major banks in September 2026, from 9.45% (PNB, floating, score 750+) to 15.60% (top of SBI’s range). HDFC Bank’s borrowers paid 9.50% to 17.00% in April–June 2026.

What is the usual interest rate for used cars?

HDFC Bank reports an average of 13.51% on used car loans it gave in April–June 2026, with an average annual percentage rate of 13.93% once fees are counted.

How does my credit score change the used car loan rate?

At PNB, a score of 750 or more gets 9.45% floating, 700–749 gets 10.05% and 681–699 gets 10.55%. SBI also prices its used car loans on bureau scores.

Can I get a used car loan for 72 months?

SBI and Bank of Baroda cap used car loans at 5 years. HDFC Bank lists terms of 18 to 84 months, subject to the car being no older than 10 years when the loan ends.

What fees come with used car finance?

Expect a processing fee (0.50% to 1% with limits at the banks above), a valuation fee of about ₹750, documentation of ₹700, stamp duty and RTO transfer charges, and foreclosure charges on fixed-rate loans.

Are used car loan rates fixed or floating?

Most are fixed. PNB and Bank of Baroda offer both, and their floating rates are linked to the RBI repo rate, which is 5.25%.

Sources

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