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Owning a car is one of the many dreams of the youth (or people from any age group for that matter) to have a quality life and is considered to be one of the many leisure experiences of life. The customers today have the option to own new cars as well as pre-owned or used cars. There is a huge market for pre-owned or used cars in the country. However, to actually own a car is more often a costly affair especially in today’s world where the cost of the car itself is high apart from the maintenance cost and fuel cost. This is where banks come to the aid of the customers. Many banks today have special finance packages or options for people who seek loans to buy used cars or pre-owned cars.

SBI Used Car loan is among the most preferred options for the people of the country in seeking loans to purchase a used car. The details of the bank's used car loans are provided here.

What is a Used Car loan?

Sbi Used Car Loan

Car Loan availed by a person in order to purchase a used car or a pre-owned car is termed as a Used Car Loan. The bank lays out several conditions for the eligibility to apply for a used car loan as well as on approval of such loans. The tenure of the used car loan also differs from the regular car loans and is usually lower.

Eligibility for SBI Used Car Loan

SBI Used Car Loan is open for all the citizens of the country subject to certain restrictions laid down in this regard. The details of eligibility for SBI Used car loan are highlighted here.

  • The age limit for applying to the SBI used car loan is the minimum age of 21 years and the maximum age of 65 years.
  • The customers can be a professional or a self employed individual or a permanent employee of any of the following entities along with being income tax assesses.
    • Central Government
    • State Government
    • Public Sector Undertakings (PSUs)
    • Private Limited Companies
    • Schools/Universities/Research Institutions
  • Persons engaged in agricultural and allied activities
  • The bank lays out minimum income criterion for all the categories of applicants. The income limits are mentioned below,
    • The minimum income for salaried class has to be Rs. 2,50,000 annually
    • The minimum income for self-employed individuals or professionals and others has to be Rs. 3,00,000 annually
    • The minimum income for persons that are engaged in agricultural or allied activities has to be Rs. 4,00,000 annually.

Documents required for SBI Used Car Loan

The documentation process of SBI is fairly simple and easy. The list of documents required for SBI Used Car Loan is two-fold along with the basic KYC documents.

Basic KYC Documents

  • Identity proof of the applicant (Aadhaar Card/ PAN Card/ Voter’s ID, Driver’s License, etc.)
  • Address proof of the applicant (Aadhaar Card/ Electricity Bill/ Water Bill/ Ration Card, etc.)
  • Recent passport size photographs
  • Bank statement of last 6 months
  • IT returns of last 2 years in case of salaried individuals and 3 years in case of self employed individuals or professionals or business entities.

The details of documents required at each stage of loan processing are mentioned below.

At the time of Application

  • The customer has to submit the proforma invoice
  • Next, a copy of seller’s RC Book has to be submitted
  • The bank will also require a copy of Seller’s Motor Insurance

At the time of disbursement

  • The customer has to submit,
  • The sale agreement between Dealer and Seller that can either be stamped or not, or,
  • An undertaking from the seller that he/she has sold the vehicle to the buyer and has no claim on the vehicle at all.
  • The customer can also supply an undertaking from the dealer to the financier instead of stamped indemnity.
  • Another requirement is that the customer will be required to submit a hypothecation clearance letter from the bank along with copies of HPTER (form 35) wherever applicable.
  • Finally, the customer will have to submit a correspondence with the Insurance Company that states or confirms the change of insurance contract in the insured’s name and the financier.

Features of SBI Used Car Loan

The SBI Used Car Loan is among the most preferred options in the category due to its wide accessibility as well as lowest interest rates and flexible tenure. The bank allows loans up to 2.5 times of the net annual income of the applicant. The applicant can also apply for the used car loan jointly with his/her spouse. In case of joint application, the income of the spouse can also be considered for calculating the minimum income criterion as required by the bank for applying the used car loan of the bank.

The various salient features of the bank’s used car loans are enlisted here.

Tenure – 

The tenure for repaying the SBI Used Car Loan is 7 years. The repayment schedule for used cars of SBI is layered with conditions. The life of the vehicle cannot be more than 5 years for the person in order to secure a loan from the bank. Also the repayment period for used cars has to be within 8 years from the date of original purchase of the vehicle.

Rate of interest – 

The rate of interest charged by the bank is among the lowest in the market in this category. The rate of interest is calculated based on many factors like the credit score of the applicant, relationship of the applicant with the bank (whether he/she is an existing customer or not), tenure, amount of loan availed, etc. The current rate of interest charged by the bank on loans for pre-owned or used cars is in the range of 10.25% to 11.25% per annum. The bank has a concessional rate of interest for women borrowers. The interest is calculated on the Daily Reducing Balance method.


The margin requirement of the bank is 20% of the value of the car (on-road price).

Amount of loan to be sanctioned – 

The amount of loan that can be sanctioned by the bank as a used car loan can be up to 80% of the value of the car (on-road price including insurance, registration, and cost of miscellaneous accessories up to Rs. 25,000) and can range between a minimum of Rs. 3,00,000 and a maximum of Rs. 10,00,000.

EMI/NMI ratio to be followed – 

The bank requires the applicants to follow a strict EMI/NMI ratio depending on the net annual income in the following range.

  • Up to Rs. 5,00,000 – 50%
  • Above Rs. 10,00,000 – 70%

Credit Score

The bank requires credit score ratings from at least 2 competent credit scoring agencies for loans above Rs. 5,00,000.

Penal Interest – 

The bank levies a penalty for defaults in payment of EMIs. This penalty is levied on the overdue amount to the extent of 2% per month over and above the interest rate charged on such loans.

Processing charges and other charges – 

The bank also offers low processing fees to the borrowers. The details of the processing fees charged by the bank are given below

Loan up to Rs. 6,00,000Rs. 1,000 + GST
Loan above Rs. 6,00,000Rs. 1,500 + GST

The bank also charges a nominal fee of Rs. 50 per search as Vehicle Search Charges in case of Auto Loans.

Pre-payment charges –

The bank does not levy charges for prepayment of loans taken for used cars or pre-owned cars.

Optional Life Cover –

The customer has the option to avail a life cover along with the loan disbursed for pre-owned or used cars. This life cover is optional in nature and is available to all the borrowers of this category.

SBI Used Car Loan Calculator

The bank also has the facility to calculate the possible EMI towards the SBI Used Car Loans. The users can input the following details in order to get the possible EMIs,

  • Amount to be availed as loan
  • Rate of Interest
  • Tenure for which the loan is to be availed

This helps the customers to plan for their expenses accordingly and thereby reduce any sudden burden or any unexpected expenses.

SBI Used Car Loan Customer Care

There are many ways that the customers can contact the bank for any queries or concerns that they may have or to report any grievances or provide feedback. The customer care services of the bank are available 24x7 throughout the year and the customers can contact the same through the following channels.

The bank also has an SMS service for immediate registration of their discontentment with respect to any of the services of the bank or any bank personnel for that matter. The customers can register their discontent by sending the SMS ‘UNHAPPY’ from their registered mobile number to 8008 20 20 20.

The bank also provides a missed call service or missed call banking to the customers where the customers can send a SMS ‘CAR’ to 09223588888 and get the information on Car Loan products.

The bank has recently launched a new mobile application by the name of SBI Samadhan. This app can be downloaded from the Google Play Store for Android users. The app was launched with the aim to enable the customers to self-service themselves by providing the maximum possible services under one application and making them as user friendly as possible. Among the many services available are services like deposits, Advances, Accounts, Related, ATM related, Internet and Mobile banking related, customer care (helpline, complaints), EMI calculator and many more such services. The customer can use this application to track his/ her car loans or address any related query.

Customers can also contact the bank via email or by writing to the customer service department of the bank at the address given below.

  • Email Id – customercare[at]sbi[dot]co[dot]in
  • Postal address - Customer Service Department
      State Bank of India
      State Bank Bhavan, 16th Floor
      Madam Cama Road,
      Mumbai 400 021
      Tel: 022-22029456

FAQs – SBI Used Car Loan

1. What is the current rate of interest for SBI Used Car Loan?

The current rate of interest for SBI Used Car Loan ranges from 10.25% to 11.25% per annum.

2. What is the preexisting condition for SBI Used Car Loans?

One of the major pre-existing conditions along with the eligibility criteria set by the bank for availing a SBI Used Car Loan is that the vehicle should not be more than 5 years old.

3. What is the margin requirement of SBI Used Car Loan?

The margin requirement for SBI Used Car Loan is revised and stands at 20% of the on-road price of the vehicle.

4. What is the age limit in applying for an SBI Used Car Loan?

The minimum age requirement for applying to SBI Used Car Loan is 21 years and the maximum age limit is 65 years.

5. What are the basic KYC documents required to apply for SBI Used Car Loans?

The basic KYC documents needed in applying for SBI Used Car Loans are listed below. Identity proof of the applicant (Aadhaar Card/ PAN Card/ Voter’s ID, Driver’s License, etc.). Address proof of the applicant (Aadhaar Card/ Electricity Bill/ Water Bill/ Ration Card, etc.). Recent passport size photographs. Bank statement of last 6 months. IT returns of last 2 years in case of salaried individuals and 3 years in case of self employed individuals or professionals or business entities.

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