Used Car Loan Interest Rates, Fees & Charges (January 2026)

The processing fee for a Used Car Loan is 1% of the loan amount, with a minimum of ₹3,500 and a maximum of ₹9,000. Additionally, there is a processing fee of ₹3,000 for loans related to manufacturer-backed accessory funding, maintenance package funding, manufacturer-backed CNG kits funding and asset protection measure funding. However, there are no processing fees for loan facilities up to ₹5 lakh availed by Micro and Small Enterprises, provided the URC submission is done prior to disbursal. These fees are applicable to ensure smooth processing of the loan and may vary based on the loan amount and type of financing required.

In situations like this, paying in cash can be significantly more burdensome than purchasing the car with a loan. Opting for a used Car Loan enables the buyer to divide the payment into manageable instalments, making it easier to afford the purchase. These instalments are spread out over several months, allowing for a more budget-friendly approach to acquiring a vehicle. It is a good idea to take a Used Car Loan because it provides financial flexibility, enabling individuals to access the benefits of owning a car without the immediate financial strain of a lump-sum payment.

The charges for pre-closing a Car Loan vary depending on the timing of the closure. For full payment pre-closures, the charges are as follows: 6% of the principal outstanding for closures within 1 year, 5% for closures within 13 to 24 months from the 1st EMI and 3% for closures after 24 months from the 1st EMI. However, there are no premature closure charges for fixed-rate loan facilities up to ₹50 lakh availed by Micro and Small Enterprises, provided the closure is from their own source. These charges are designed to regulate the early repayment of the loan and may differ based on the loan amount and borrower type.

If you delay your EMI, HDFC Bank will charge 18% per annum or 1.50% per month, plus applicable government taxes, on the overdue amount. This charge is calculated daily and added to your next EMI. You are advised to pay on time to avoid this penalty.

You must pay ₹650 as documentation charges and ₹600 as Registration Certificate (RC) collection fees. RC collection fees are refundable if the loan is cancelled. Other charges, such as stamp duty and RTO transfer fees, are charged at actuals and are non-refundable in case of loan cancellation.

For changing repayment mode, you are charged ₹500 per instance. If you reschedule or rebook your loan, you must pay ₹400. If RC changes are needed, a ₹5,000 refundable security deposit is collected and refunded after the transferred Registration Certificate is provided to HDFC Bank.

For each special NOC like LPG/CNG or Commercial/Personal Use conversion, HDFC Bank charges ₹200. A CIBIL charges fee of ₹50 is applicable on request. Issuance is subject to credit approval. Ensure you meet the eligibility criteria to request these certificates from the bank.

You must pay ₹750 for car valuation or asset verification per case. If your payment is returned, HDFC Bank charges ₹450 per instance. These charges help the bank manage operational costs and ensure compliance during the loan approval and repayment process.

If you cancel your loan, you bear interest from disbursement to the cancellation date. Processing fees, stamp duty, documentation, valuation, and RTO charges are non-refundable. Registration Certificate collection charges are refundable. You must also not make payments in cash or kind to bank executives for loan services.