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  • Allahabad Bank Car Loan Interest Rates

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  • Allahabad Bank offers a car loan scheme to purchase a new car or a pre-owned car at interest rates ranging from 8.8% to 11.55% p.a. The maximum amount you can avail is three times your net annual income. If you choose to add a co-borrower, you will be able to get an extension on the loan limit. You can take up to 7 years to repay the loan and the maximum processing fee payable under this scheme is Rs.Rs.8,696. Allahabad Bank employees need not pay the processing fee.

    Allahabad Car Loan Interest Rate

    Features New car loan/Used car loan

    Interest rate

    • New car loan: 8.8% to 11.05% p.a.
    • Used car loan: 9.55% to 11.55% p.a.

    Loan Limit

    Three times the net annual salary

    Loan Tenure

    12 months to 84 months

    Processing fee

    0.5% of the loan amount

    Lowest EMI per lakh

    Rs.799 (at 8.8% p.a. interest for a 5-year tenure)

    Other Charges

    Documentation Charges

    Nil

    Prepayment Penalty

    In case of a takeover, 3% of the outstanding balance

    Inspection Charges

    Nil

    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:

    • Credit score: If you have a high credit score, the bank will consider you a less risky applicant. Thus, the chances of application approval are higher as well as the chance of being offered a lower interest rate.
    • Debt-to-income ratio: Banks take into consideration the applicant’s income and his/her 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.
    • Income: 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.

    FAQs

    1. What is the loan repayment criteria stipulated by Allahabad Bank?
      • Salaried individuals have to repay the loan three months prior to the date of retirement from service.
      • Non-salaried individuals have to repay the loan before they attain 70 years of age.
      • Firms and companies should be in existence for at least 2 years.
    2. What is the maximum repayment period mentioned by Allahabad Bank?
      • New car
        • Individuals: Up to 7 years
        • Companies: Up to 5 years
      • Pre-owned car: Up to 5 years or the residual life of the vehicle, whichever is lower
    3. What is the security and collateral required by Allahabad Bank?
    4. The primary security is hypothecation of the vehicle. Additional collateral required is as follows:

      • Loans up to Rs.20 lakh: The customer’s spouse should be a co-borrower.
      • Loans above Rs.20 lakh: 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.
    5. How many vehicles can the Allahabad Bank finance?
    6. There is no limit per se on the number of vehicles that can be purchased through an Allahabad Bank car loan.

    7. What kind of vehicles does Allahabad Bank provide loans for?
    8. Allahabad Bank offers loans for most type of vehicles such as Jeep, Van, Car and Multi Utility Vehicles. The vehicle can be used for personal purposes or official purposes.

    9. What is the margin for new vehicles?
    10. The margin for new vehicles is 15% of the on-road price of the vehicle which includes one-time registration, the first time road tax, and insurance cost.

    11. What is the maximum loan amount for pre-owned vehicles?
    12. The maximum loan amount that can be availed is 85% of the agreed purchase price or 60% of the value of the car, whichever is lower.

    13. What are the eligibility requirements under Allahabad Bank’s car loan scheme?
      • Salaried: Individuals should have a minimum gross monthly salary equal to Rs.25,000
      • Self-employed: Individuals should be an IT assessee with full collateral security.
      • Companies: The net profit should be enough to repay the car loan.
      • Retired: Individuals should draw minimum monthly pension equal to Rs.15,000.
      • Agriculturist: Individuals should have at least 5 acres of irrigated land.
    14. What is the maximum age of a pre-owned car that can be financed under Allahabad Bank’s car loan scheme?
    15. Pre-owned cars up to 3 years of age, starting from the date of registration, can be financed.

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