Bank of Baroda (BOB) Car Loan Interest Rates

Overview About Bank of Baroda Car Loan

Headquartered in Vadodara, Gujarat, Bank of Baroda is one of the largest banks in the country and was founded in 1908. Bank of Baroda has over a 100 offices all over the world and offers various financial services to individuals and corporates.

Affordable car loans are provided by Bank of Baroda for those looking to own their dream car. These loans are easy to procure, offer flexible tenures at competitive interest rates and do not require extensive documentation.

Bank of Baroda Car Loan Interest Rates 2017

Bank of Baroda offers loans that are designed to suit the needs of individuals and corporates looking to buy a car to suit their needs and requirements. Bank of Baroda finances a variety of cars and offers loans of up to Rs. 100 lakhs along with a maximum repayment tenure of 7 years. Apart from this, an additional unique facility offered is the installation of LPG/CNG gas kit for cars thereby enabling customers to be more environmentally conscious.

Bank of Baroda Car Loan Interest Rates Table

How to calculate Interest rate on my Bank of Baroda Car Loan

EMIs or Equated Monthly Installments is a flexible and easy way to repay car loans. These EMIs consist of both the principal amount and the interest amount and the interest portion depends on the rate of interest determined by the Bank of Baroda. Apart from this, the loan tenure also plays a significant role.

The EMI amount that is to be paid can be calculated with a simple formula as illustrated below -

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

In the above formula, E refers to the EMI, P is the principal amount, r refers to the interest rate and n is the number of years or tenure of the loan.

For an amount of Rs. 1,00,000 at an interest rate of 9.90% along with a loan tenure of 1 year, the total payment would come up to approximately Rs. 1,04,580 and the EMI amount would be Rs. 8,715.

The following will be the amortization table for a car loan of Rs. 5,00,000 for a period of 3 years at an interest rate of 9.90% from Bank of Baroda (starting from August 2015)

With the progression in tenure, the principal portion increases and the interest rate decreases until the loan is completely repaid.

Factors affecting Bank of Baroda Car Loan Interest Rates

The variables that impact the interest rates for Bank of Baroda Car Loan are essentially what drive customers looking to avail car loans. To put it simply, lower interest rates are what everyone seeks so that they can reduce their overall loan expenses. It is also important to note that there are multiple factors that affect interest rates for a Bank of Baroda Car Loan. Some of these factors are -

• Income - one of the main criteria to be eligible for a vehicle loan in most banks is a minimum monthly income. This assures the bank of the customer’s ability to repay the loan. Customers are known to take measures like including the salary of their family members to their own to meet this income requirement, failing which the loan-application is either rejected outright or the interest rate charged is higher.
• Tenure - Most tenures range between 12 and 84 months, though even this is subject to the bank offering it. In most cases, customers opt for longer tenures to drive down the EMI, this also means the customer ends up paying a significantly higher interest amount. Banks often view longer tenures as dicey business, and shorter tenures tend to be encouraged.
• Debt-to-income-ratio - Customers with outstanding loans are viewed as higher financial risk by banks, because their current income is already being employed to repay these existing loans. The possibility of inconsistency in repayment of loans over time put the banks on a cautious footing while considering such customers.
• CIBIL scores - This is a system introduced by the Credit Information Bureau of India Limited that scores a person on the basis of his/her outstanding debts, payments and loans. Banks and other financial institutions employ the CIBIL score as the standard for a person’s eligibility, and prefer providing loans to those with a high score.
• Prior Working relationship with the bank - If the person has a healthy history with the bank, it is all the better as the Bank has knowledge of the person’s payment history hence providing loans is a lot less risky for them.

How CIBIL scores affect Bank of Baroda Car Loan Interest Rates

Reflection of a person’s credit history and payment, the CIBIL score is an important factor considered by banks before deciding a person’s eligibility for procuring loans. The CIBIL TransUnion Score is provided by CIBIL or Credit Information Bureau Limited and this is generated based on the person’s credit payment history and credit scores. The CIBIL score is a 3 digit number ranging from 300 to 900 with a higher score being given greater priority. Those with a higher score stand a greater chance of receiving a positive response from the bank with respect to their loan application. Apart from this, those with a higher CIBIL score can also avail car loans at low rates of interest. Higher scores are an indicator of customers who repay their loans without hassle and are seen as low risk category. Therefore, CIBIL scores are an important factor considered by banks and financial institutions while accepting a customer’s car loan application.

Frequently Asked Questions (FAQs) about the Bank of Baroda Car Loan Interest Rate

• What is the Base Rate determined by Bank of Baroda?

  A base rate of 9.65% per annum is applicable on car loans as determined by Bank of Baroda.

• What is the security required to avail a car loan from Bank of Baroda?

  The security required is as listed below -

  ~ Hypothecation of the Vehicle

  ~ RTO needs to be aware of the bank’s charge on the registration document. A certified photocopy of the RTO registration with Bank of Baroda named as financier is also required.

• What are the unified processing charges applicable?

  Unified processing charges consists of documentation charges, processing charges, pre-sanction and one time post sanction inspection charges and document verification charges. This unified processing charge is applicable as given below -

  ~ For car loans of up to Rs. 15 lakhs - 0.75%

  ~ For car loans of more than Rs. 15 lakhs - 0.50%

• What is the loan margin determined by Bank of Baroda?

  For loans of up to Rs. 15 lakhs, a margin of 15% on the road price of the car is applicable and if the loan amount is above Rs. 15 lakhs, then 20% on the road price of the car is charged.

• Can applicants avail of a concession in interest rates while procuring a car loan?

  If an applicant offers a minimum of 50% liquid security as the collateral for the car loan, then he/she can avail of a concession in the interest rate. In case the applicant has already availed a home loan with Bank of Baroda and also has a good repayment history, then he/she can procure an additional concession of 0.25% on the car loan interest rate.