Used Car Loan

It takes 1 day to sanction the loan and additional 2 days to process the payment after all the relevant documents have been submitted.

You can get a loan up to 100% of the valuation of your desired pre-owned car basis your credit score and the bank’s internal assessment criteria.

You can get a loan of up to 200% of the valuation of your pre-owned car basis your credit score and the bank’s internal assessment criteria.

For re-purchase:

• Rate of Interest: Starting as low as 11.99%* per annum

• Tenure: up to 7 years

• Loan Amount: From ₹1 Lakh up to ₹2 Cr

• Funding: Up to 100% of the valuation of the car

For re-finance/loan against car:

• Rate of Interest: Starting as low as 13.99%* per annum

• Tenure: Up to 5 years

• Loan Amount: From ₹1 Lakh up to ₹50 lakhs

• Funding: Up to 200% of the valuation of the car

The maximum amount you can avail is ₹2 crore and the maximum tenure can go up to 7 years depending on your credit score and the bank’s internal policies.

You can click here to apply online or apply through mobile app of IDFC FIRST Bank or give us a missed call at 1800 10 888 and our representative will get in touch with you.

Choosing IDFC FIRST Bank for your pre-owned car purchase can be a wise decision for the following reasons:

Repurchase loans

• 100% Loan-to-Value ratio: Enjoy the flexibility of financing the entire value of your chosen pre-owned car

• Same-day disbursal (up to ₹15 lakh): Swift and hassle-free loan processing ensures you can drive your dream car on the same day

• Attractive rate of interest starting at 11.99%: Benefit from competitive interest rates, making your car ownership journey affordable

• Wide selection of certified cars: Choose from a diverse selection of certified and verified cars available through our trusted partner dealerships across India

• Flexible loan terms: Tenure of up to 7 years, offering extended flexibility for budget-friendly repayments on your used car purchase

Refinance loans

• Funding up to 200% of car value: Obtain the financial support you need by refinancing up to 200% of your existing car's value

• Same day disbursal (up to ₹15 lakh): Experience quick and seamless loan disbursal, allowing you to address your financial requirements promptly

• Attractive rate of interest starting at 13.99%: Our refinance loans come with competitive interest rates, ensuring a cost-effective solution for your financial needs

• Flexible tenure: Tenures of up to 5 years, ensuring a seamless and manageable repayment plan for your refinanced car loan

Considering a pre-owned car loan with IDFC FIRST Bank? Here's a breakdown of the eligibility criteria and documents you'll need:

Eligibility criteria

• Indian citizenship: Applicants must be Indian citizens.

• Age requirement: 21 years or above

Income criteria

• Salaried individuals: A minimum monthly income of Rs. ₹25,000

• Self-employed individuals: An annual income of ₹1.5 lakh or more

Vehicle and ownership documents

• Driving license and vehicle registration: When it comes to vehicle documents, you need a valid driving license and the registration certificate of the vehicle you're purchasing or using as collateral.

Identity proof

• You can choose from the multiple identify proof options and provide either your PAN card, Aadhaar card, passport, or voter ID.

Address proof

• You can choose from multiple address proof options and submit either a bank statement, electricity bill, telephone bill, or rent agreement as your address proof.

Income proof

• Choose from the diverse income proof options and furnish a salary slip, income tax return, or bank statement as proof of income.

A used car loan, also known as a pre-owned car loan, is a financing option specifically designed to help you purchase a second-hand vehicle. It differs from a loan against car, which allows you to borrow funds using a car you already own as collateral. With a pre-owned car loan, you receive a lump sum amount to buy the vehicle, which you repay in instalments along with interest over a chosen tenure. While the terms and conditions of second-hand car loans may vary from those of new car loans, they offer greater flexibility and affordability, making it easier to own a quality pre-owned car without a heavy financial burden.

IDFC FIRST Bank offers lenient criteria for salaried, self-employed, HUF, and businessowners who are eligible to apply for a used car loan. Here are the basic eligibility requirements for pre-owned car loans for 2^nd hand cars.

For self-employed individuals:

• Resident Indians only

• Aged between 21-70 years

• Minimum 2 years of business continuity

• Must earn minimum ₹1.5 lakh per annum

For salaried individuals:

• Resident & non-resident Indians

• Aged between 21-60 years

• Minimum 1 years of experience

• Must earn minimum ₹1.8 lakh per annum

• HUF/Proprietorship/Partnership/Private Limited

• Minimum income of ₹1.50 lakh

Yes. While most lenders offer 80%–90% of the car’s value, IDFC FIRST Bank offers up to 100% Loan-to-Value, meaning you can buy your car without any upfront cost.

Second-hand car loans from IDFC FIRST Bank come with flexible tenures going up to 84 months for a convenient and burden-free loan repayment. You can opt for a suitable loan tenure based on your monthly budget and repayment capacity.

Used car loan interest rates can vary depending on several factors such as your credit score, loan amount, and repayment tenure. IDFC FIRST Bank offers among of the lowest interest rates on pre-owned car loans starting at just 11.99% per annum.

A used car loan is specifically designed to finance the purchase of pre-owned vehicles. Since used cars have already depreciated in value, the principal loan amount is lower compared to a new car loan.

On the other hand, a new car loan is tailored for financing the purchase of brand-new vehicles. Typically, new car loans offer lower interest rates since new cars have a higher resale value and are perceived as less risky.

With used car loans from IDFC FIRST Bank, you get several options to pay your EMIs including:

• Auto-debit via NACH/e-NACH

• Net banking

• Debit card

• UPI

Note: Part payments are not allowed on used car loans.

Tax benefits on a pre-owned car loan are not available to the general public, salaried employees, or unemployed individuals. However, business owners can claim tax benefits on interest payments if the purchased vehicle is used for business purposes.

IDFC FIRST Bank offers extended tenures on pre-owned car loans for easy repayments. You can choose from tenures ranging from 12 to 84 months, based on your repayment capacity.

The interest rate on a pre-owned car loan depends on several factors, including:

1. Debt-to-Income (DTI) Ratio
   This ratio compares your total monthly debt payments to your gross monthly income. It helps lenders assess your ability to manage additional loan repayments. A lower DTI ratio indicates fewer existing financial obligations relative to your income, making you more likely to qualify for a lower interest rate.

2. Credit Score and Credit History
   Your credit score and history reflect your past financial behaviour, such as repayment patterns, credit utilization, length of credit history, and the types of credit accounts you hold. A strong credit score and a clean repayment record suggest lower risk to the lender, often resulting in better interest rates.

3. Income Bracket
   Your annual income bracket gives insight into your repayment capacity and overall financial stability. Higher income levels generally increase your eligibility for favourable interest rates.

4. Age and Model of the Vehicle
   o Certain car makes and models retain their value better, which can influence the interest rate offered.

   o Newer used cars typically attract lower interest rates than older ones, as they are more reliable, have fewer maintenance issues, and may still be under warranty, reducing the lender’s risk.

5. Loan Tenure
   Shorter loan tenures usually come with lower interest rates because they reduce the lender’s risk and result in lower total interest paid. Conversely, longer tenures may attract higher interest rates due to the extended repayment period and increased exposure to default risk.

A processing fee is a one-time charge levied by the bank to cover administrative costs associated with processing your loan application. IDFC FIRST Bank offers one of the lowest processing fees on used car loans, starting at just 1% of the principal loan amount or ₹5,000, whichever is higher.

No, part prepayments are not allowed on pre-owned car loans from IDFC FIRST Bank. However, you can choose to foreclose your loan by paying the applicable foreclosure charges.

You can reduce your financial liabilities anytime by foreclosing your pre-owned loan before the maturity date. When foreclosing your pre-owned car loan by IDFC FIRST Bank, a charge of 5% of the outstanding loan amount along with the applicable GST charges is applicable. In certain cases, a lower foreclosure charge may be applicable if pre-approved before disbursement.

No, a guarantor is not required to apply for a used car loan with IDFC FIRST Bank. However, if you do not meet certain eligibility criteria, the bank may request a co-applicant to approve the loan.

Part prepayments are not allowed on used car loans. However, you can foreclose your loan anytime by paying the outstanding amount in full. To close the loan before maturity, you need to pay a foreclosure charge of 5% of the outstanding amount along with the GST.

Used car loans from IDFC FIRST Bank are collateral-free, meaning you don’t need to provide any security when applying for a second-hand car loan.

The loan can be repaid using multiple convenient methods. The most common option is through automated EMIs via NACH, eNACH, or e-mandate, set up during the loan application process. Additionally, you can use net banking or a debit card for manual payments.

No, IDFC FIRST Bank's used car loans are collateral-free. This means you are not required to pledge any additional security or assets when applying for a second-hand car loan. However, if you do not meet specific eligibility criteria, the bank may require a co-applicant to approve the loan amount.

The interest rates for IDFC FIRST Bank's used car loans vary based on the type of loan:

• Repurchase loans: Interest rates start from 11.99% per annum.

• Refinance loans: Interest rates start from 13.99% per annum.

These rates are subject to change based on the bank's policies and your credit profile.

The EMI (Equated Monthly Instalment) for a used car loan is calculated based on the loan amount, interest rates and the tenure for which the car is financed. The used car loan EMI is calculated using the formula:

EMI = [P × r × (1 + r)^n] / [(1 + r)^n – 1]

Where:

• P = Principal loan amount

• r = Monthly interest rate (annual rate divided by 12)

• n = Loan tenure in months

To simplify this calculation, you can use IDFC FIRST Bank's online EMI calculator, which provides instant results based on your input values.

To lower your EMI for a used car loan, consider the following strategies:

• Opt for a longer tenure: Extending the loan tenure reduces the monthly EMI, though it may increase the total interest paid overtime.

• Make a higher down payment: Paying a larger upfront amount decreases the loan principal, thereby reducing the EMI.

• Refinance your loan: If you have an existing loan, consider transferring to a lender offering a lower interest rate.

• Improve your credit score: A better credit score may help you qualify for loans with lower interest rates, thus decreasing your EMI.

It's advisable to assess your financial situation and consult with the bank to choose the best option for reducing your EMI.