Buying a car of your choice and having a reliable financial support is a great relief to those who are planning to buy a vehicle.
There are certain things to keep in mind such as buying a brand new car or a used one as the rate of interest varies between the two.
In this article we will look at all aspects of Bank of India Car Loans.
Interest Rate for Car Loan
To begin with, It is vital to understand the various cost factors involved for a car loan with regards to the banks funding and your personal contribution (down payment). Bank of India presents different interest rates for the different category from 9.35%
|Bank of India||New Car Loan||Used Car Loan|
|Loan Tenure||Upto 7 years||Upto 3 years|
|Lowest EMI||Rs. 1,627 per lakh||Rs. 3,196 per lakh|
|Loan Amount||Up to 85% of on road price||Up to 70% of vehicle’s market value|
You definitely want to ensure that your lender (Bank) provides auto-adjusted benefits on interest rates that extends into the future. That’s the reason why you need a credible lending institution with a dedicated and experienced workforce who will guide you through the entire process.
Features of Bank of India Car Loan
- Bank of India car Loans are available for both salaried and self employed.
- Special rates for Bank of India account holders
- Car Loans granted to age group between 18 to 65 years.
- Loan to Value Ratio is upto 85% of on road price
- Maximum Tenure of loan is 7 years.
- Interest rates range from 9.35%
- EMI of Rs. 1,627 per lakh
So, are you ready to buy a Vehicle?
If the answer is YES, you must be having a lot of questions in your mind like:
- Am I eligible for the Car loan?
- How much EMI will I need to pay every month?
- How can I compare the EMIs of different banks on my own?
- Where will I arrange the down payment amount and EMI amount from?
- How much down payment do I have to make?
Let’s understand this with a simple example:
Let’s assume a scenario. Sheela a business woman wants to start a car rental service in her city. She plans to begin with two cars and expand her business from the profits she makes from the two vehicles. Purchasing the cars are top priority for Sheela and her business. The price of the cars are approximately Rs. 20 lakhs in total. Sheela’s funds are low and therefore she plans to approach Bank of India for a car loan.
She inquires about the car loan in detail. She is feed with so much information; he gets puzzled. In this case Sheela thinks of beginning to save from today, so that she is able to pay the initial amount of the loan as well as the EMIs. .
This is where Car loan EMI calculator and ClearTax’s Save is a simple solution to all of Sheela’s financial issues. ClearTax offers a brilliant way to save for your future financial goals through ClearTax Save!
Just like Sheela You can now save for your initial down payment as well as other payments. But we also recommend you calculate and judge your investment options anyway. In general, people start saving their money in either of these, say RD (Recurring Deposit), Savings account, SIP (Systematic Investment Plan) etc.
Let’s find out the best way to save your money for down payment and for other expenses too:
|Vehicle Value||Rs. 20 lakhs|
|Time||2 yrs. (24 months)|
|Down payment||20% of Loan value = Rs. 4 lakhs|
Now, consider different scenarios for saving your money for the next 2 years.
|Type of Investment||Interest Rate||Maturity Amount after 2 Years|
|Savings Account||4%||Rs. 4,17,084 (Gains=Rs. 17,084)|
|Recurring Deposit||6.70%||Rs. 4,29,132 (Gains =Rs. 29,132)|
|SIP||14-18%||Rs. 4,84,364 (Gains = Rs. 84,364)|
Hence from the above table SIP is the most rewarding saving’s scheme; as SIP will enable you to invest regularly every month by diversifying your investment resulting in you owning your dream car sooner than you expected. Invest now in SIP through ClearTax Save as low as Rs. 1,000!
Car Loan EMI Calculator, how does it work?
A Car Loan EMI Calculator is a handy tool that calculates the monthly amount payable to the lender (Bank) every month. To calculate the EMI applicable on your loan amount, you need to use the sliders above to adjust the values of the Principal amount (P), Time duration (N), and Rate of interest (R). EMI calculator.
Bank of India Parameters to decide Car Loan Interest Rates:
3 basic criteria on which the loan interest rate would largely depend are:
• Loan amount: Car Loan amount will decide the interest rate you are going to pay. The more the loan amount, the lesser the interest rate will be
• Your Salary: higher the salary amount, lower would be the interest rate
• Type of loan opted for: Account holders have a fair deal now! They can enjoy a lower rate of interest on car loans.
It is generally advantageous to take a car loan as it will allow you to get tax exemptions. However, you must consult your CA/ income tax advisor to know the benefits/disadvantages in your specific case.
Eligibility Criteria for Car Loan
To become eligible for IndusInd Bank car loan the eligibility standard must be matched. That becomes an important deciding factor for your loan amount. Instances like:
- Salaried, Self- Employed Professional or a Businessman
- Number of dependents
- Co-Applicants Income
- Assets, Liabilities, Stability, and Continuity of Occupation of the borrower
- Savings History
Further, the loan eligibility will also be dependent on the value of the vehicle selected by you.
Some of the key eligibility factors are listed below:
|Age||18 – 65 years|
|Job Stability in case of Salaried (in years)||2 years|
|Loan to Value Ratio||Up to 85% on road price|
Penalties/Other Charges for Car Loan
In addition to the mentioned interest rates, car loans also carry the processing fee, foreclosure charges, registration charges and other charges that are applicable.
Let’s discuss some charges in detail:
- Processing Fee – Bank of India charges 1% of loan amount as processing fee.
- Prepayment Charges: If you decide to foreclose or transfer your car loan to another bank, you need to submit an application for the same to Bank of India and follow RBI rules
Process of Applying for Car Loan
You can apply for Bank of India car loan by contacting the bank directly or by applying online. Availing a loan through an online marketplace improves the chances of getting best loan rates, low processing fees and special offers in the form of cash backs. Once you approach the bank, they will collect your documents and initiate the loan process which includes checking your CIBIL score, the value of the property, technical and legal checks on the property, eligibility calculation. The bank will give a decision on your loan based on the evaluation results.
Documents for Car Loan
|Filled up loan application form||Filled up loan application form|
|2 Passport Size Photo||2 Passport Size Photo|
|Identity Proof – Passport/ Driving Licence/ Voter ID/ PAN||Identity Proof – Passport/ Driving License/ Voter ID/ PAN|
|Residential Address Proof – Leave and License/ Registered Rent Agreement/ Utility Bill (upto 3 months old), Passport||Residential Address Proof – Leave and License/ Registered Rent Agreement/ Utility Bill (upto 3 months old), Passport|
|Income Documents – 6 months payslip, 2 years Form 16, 6 months bank statement showing salary credit and any EMI debit||Business proof such as VAT/ service tax registration, incorporation details in case of companies, business address proof, profit and loss account and balance sheets certified by CA, copy of partnership deed and proof of business existence and business profile|
Bank of India Car Loan Tax Benefits:
Car loans provided for self-employed/Business men that are used for commercial purposes are eligible for tax deduction under section 80C of the Income Tax Act.
Similar Banks Offering Car Loans
|Axis Bank||HDFC||State Bank Of India||ICICI|
|OBC||Andhra Bank||Central Bank of India||PNB|
|Union Bank of India||IDBI||Federal Bank||IndusInd Bank|
|Indian Bank||Bank of Maharashtra||Corporation Bank||Car Loan EMI Calculator|