Allahabad Bank Car Loan Interest Rates

Allahabad Bank ‘All Bank Dream Car’ loans are available at attractive and flexible interest rates 9.10% along with a repayment tenure of up to 84 months. Customers need not go through the hassle of extensive documentation or a very long waiting period to avail their loans. Eligibility is decided based on the person’s income among other factors and this loan is available for customers who are self-employed, salaried, professionals and businessmen apart from firms, corporates, agriculturalists and also pensioners. Low margin and a high limit of loan are two other factors that makes the Allahabad Bank car loan one of the most accessible and easy-to-avail loans in the market currently.

Particular Charges
Base Rate 9.10%
Rate of Interest 9.10%
Margin 15% of the vehicle’s on-road price and this includes one time registration along with first time insurance charge and road tax
Loan Limit Thrice the net annual salary
Loan Tenure 12 months to 84 months
Minimum monthly income required Rs. 25000 for salaried individuals
Documentation Charges Nil
Prepayment Penalty In case of a takeover, 2% of the outstanding balance.
Processing Charges 1% of the amount taken as loan(minimum of Rs.500) However, Allahabad Bank employees are exempted from paying processing charges
Mortgage Charges NA
Inspection Charges Nil

Allahabad Bank is the oldest joint stock bank in the country with headquarters in Kolkata and was founded in 1865 in Allahabad. This nationalised bank has over 3000 branches all over the world with over 2500 branches within the country. The equity shares of Allahabad bank are listed on National Stock Exchange of India and Bombay Stock Exchange.

Allahabad bank offers car loans for the purchase of all kinds of cars, jeeps, S.U.Vs and more, both for personal and commercial use. Allahabad Bank car loans also come with low interest rates and a flexible tenure that is beneficial for everyone looking to own a car.

How do you calculate Interest Rates for an Allahabad Bank Car Loan?

Customers need to repay their loans through Equated Monthly Installments or EMIs. Rather than paying the entire amount as one lump sum, customers can repay the loan through a small amount paid monthly until the loan is completed. The amount paid as EMI each month depends on the amount borrowed and the rate of interest charged. Therefore an EMI amount consists of both the principal amount and the interest amount. EMI can be easily calculated using a simple formula.

E = P*r*[(1+r)^n/((1+r)^n-1)]

In the above formula, E refers to the EMI amount that is to be paid, P stands for the principal amount that is borrowed, r is the rate of interest charged per month and finally n is the number of years.

For example, if Rs. 1,00,000 is the amount borrowed at an interest rate of 10.60% for a period of 1 year, the total payment would be about Rs. 1,04,908 with Rs. 8,742 being paid as the EMI amount.

The table given below illustrates the amortization table for a car loan of Rs. 4,50,000 for a period of 3 years at an interest rate of 10.60% from Allahabad Bank (starting from August 2015).

Year Total Payment Balance Principal Portion Interest Portion
2015 Rs. 43,557 Rs. 4,14,042 Rs. 35,958 Rs. 7,599
2016 Rs. 1,74,229 Rs. 2,77,179 Rs. 1,36,863 Rs. 37,366
2017 Rs. 1,74,229 Rs. 1,25,082 Rs. 1,52,097 Rs. 22,132
2018 Rs. 1,30,672 0 Rs. 1,25,082 Rs. 5,589

As observed in the table above, with the progress in tenure, the principal portion increases with the tenure and the interest rate decreases until the loan is repaid in full.

Factors affecting Allahabad Bank Car Loan Interest Rates

Interest rates are perhaps the most important factor taken into consideration by prospective customers. Lower the interest amount, the more affordable is the loan. There are various factors that play a role in the Bank’s interest rate. Some of these factors include -

  • Debt-to-income ratio - Banks take into consideration the applicant’s income and their debt history. Customers whose financial history is fraught with late payments or large amounts of debt, have a harder time procuring car loans as banks are wary of their repayment capabilities.
  • Loan Tenure - Banks generally offer a tenure of 12 months to 84 months for customers to repay their loans. Although most opt for a longer tenure so as to reduce the burden of EMI payments, this can have a negative impact on the interest rates. Longer tenures indicates a high risk of default payments for the bank hence in order to reduce the risk, they may increase the interest rate for the customer. Hence a shorter tenure is always advisable.
  • Income - Banks stipulate a minimum income requirement that has to be met by customers before availing a particular loan. This minimum amount decided by the bank varies based on the occupation of the customer such as if the customer is salaried or self employed or if the customer is a pensioner and so on. A higher income indicates less financial risk for the banks hence there is a greater chance of the customer receiving the loan at a lower rate of interest.
  • Co - applicant - Having a co-applicant increases the chances of a customer availing loans at a low rate of interest. This is due to the fact that the co-applicant’s income will also be added to the overall net income and therefore increases the repayment capacity of the customer reducing the risk of default payments.
  • A prior working relationship with the bank is an added benefit. Allahabad Bank has various offers and benefits for customers who have a prior working relationship with them.

How does CIBIL score affect Allahabad Bank Car Loan Interest rates

The CIBIL TransUnion Score is a condensed and calculated summation of a person’s financial history- including credit history and loan payments, that varies from 300 to 900. Banks and financial institutions use an individual’s CIBIL score to determine his/her eligibility for approval of the requested loan. A higher score shows a greater promptness and ability in repayment of loans, and people with a score of over 750 are usually offered attractive loan schemes with relatively low interest rates. Likewise, a lower CIBIL score makes banks wary of the individual and their loan applications are either rejected or discouraged.

FAQ’s about Allahabad Bank Car Loan Interest Rates

  • What is the loan repayment criteria stipulated by Allahabad Bank?

    ~For salaried individuals, the loan has to be repaid three months prior to the date of retirement from service.

    ~For others, the loan has to be repaid before the person attains 70 years of age.

    ~For firms and companies, in order to avail a loan, they should be in existence for at least 2 years.

  • What is the security and collateral required by Allahabad Bank ?

The primary security is hypothecation of the vehicle. Collateral required is as follows -

~ For loans upto Rs. 20 lakhs, the customer’s spouse should be a co-borrower and apart from this, additional collateral or security is not required.

~ For loans above Rs. 20 lakhs, collateral security in the form of NSC/FDR/KVP or mortgage of the house along with a guarantee of one person is required. However, if the margin provided is above 25% then there is no need for additional security or collateral.

  • How many vehicles can the Allahabad Bank finance?

    There is no limit per say on the number of vehicles that can be purchased through an Allahabad Bank car loan.

  • What kind of vehicles does Allahabad Bank provide loans for?

    Allahabad Bank offers loans for most type of vehicles such as Jeep, Van, Car and Multi Utility Vehicles.

  • What is the margin for new vehicles?
  • The margin for new vehicles is 15% on the road cost of the vehicle which is one-time registration and the first time insurance charges and road tax.

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