Loan for pre-owned car is more expensive

Do banks charge higher rates for used cars? What are the documents that I should take from the seller?

- CHAITALI DUTTA

—Surender Gupta

The interest rate for financing a used car will be slightly higher. Bring copies of the RC book, valid insurance, and insurance claim history. The financer will conduct an independent valuation of the used car before approving the loan amount.

I had taken a car loan of ₹10 lakh last year at an interest rate of 12% from an NBFC. Can I shift the loan to a private bank which is charging 8%?

—Saurabh Kalra

This will depend on the terms of the agreement. Usually after one year, a balance transfer is possible. Do have a look at the sanction letter from the NBFC and talk to them about reducing the interest rate.