Banks charge higher interest rates on used car loans
than they do on a new car loan. The difference for the same bank can range from 150 basis points to as high as 575 basis points in some cases.
Interest rates on used car loans
range from 9.9 per cent to as high as 17.50 per cent.
There is considerable variation in processing fee charged by different players. For some, it is capped at Rs 1,500 while for others the upper limit goes as high as Rs 15,000.
Some banks do not charge anything at all for pre-paying the loan. In the case of others, it is higher in the initial days and reduces in later days of the loan. A similar pattern is seen for foreclosing the loan.
Do collect the down payment. Most banks will not offer more than 80-85 per cent of the loan amount.
Check your credit score. If it is above 750, it will help you get this loan with more favourable conditions.
Make sure that the sum total of all your EMIs does not exceed 40 per cent of your take home salary