Catholic Syrian Bank Ltd. (CSB) was founded in Thrissur, Kerala in 1920. Its origin is closely connected to the Swadeshi movement and was formed for financially empowering Indians by acting as a Swadeshi Bank. Reserve Bank of India Act 1934 paved way for the inclusion of the Bank under its Second Schedule. Currently the bank has around 234 ATMS and 431 bank branches across India.
CSB offers custom-made car loans at attractive rates of interest to customers, with unique features and benefits that help them save money on overall expenses. The maximum loan quantum offered to a borrower is up to 80% of the Invoice Value of the car plus the applicable road tax. Other expenses such as registration, insurance, etc. are not considered while determining the car loan amount. The hypothecation of the Vehicle is to be pledged as security to the bank.
Catholic Syrian Bank Car Loan Interest Rates are unique due to its affordability compared to interest rate on car loans offered by other banks. It has two different car loan schemes to suit the requirements of different categories of customers. However, the interest rate applied on both are the same, since the Bank treats all customers equally and fairly. Catholic Syrian Bank Car Loan Interest Rate 2017 is fixed for all car loans offered by the bank.
|Interest Rate||11% (For both VIP Car Loan and regular Car Loan scheme)|
|Loan amount||VIP Car Loan - 100% of Invoice Value Regular Car Loan - 80% of Invoice Value plus road tax, as applicable|
|Minimum & Maximum Car Loan Tenure||Minimum Tenure - 12 months Maximum Tenure - 60 Months (5 years)|
|Documentation charges||Up to Rs. 1 lakh – Rs. 100 Rs.1 lakh up to Rs. 10 lakh – Rs.300 Above Rs.10 lakh – Rs. 500|
|Foreclosure/ Pre-payment Charges||1% of the outstanding amount (principal)|
|Lowest EMI per Lakh (for maximum loan tenure of 5 years)||Rs. 2174*|
Equated Monthly Installments or EMIs is the payment option available to repay loans. This, basically is the amount that is to be paid back to Catholic Syrian Bank after availing the car loan and includes both the principal amount along with the interest amount. There is an increase in the principal amount and a reduction in the amount of interest to paid as the loan tenure progresses.
The formula for calculating the EMI on a car loan is -
EMI (E) = [P x r x (1+r)^n]/[(1+r)^n-1]
P = the loan amount or principal,
R = interest rate per month [ for an annual interest rate of 11%, the rate of interest will be 11/(12 x 100)],
N = the number of monthly instalments made during the tenure, i.e., no. of years or months taken for the repayment of loan.
For an amount of Rs. 2,00,000 at an interest rate of 11% with a loan tenure of one year, an estimate of the total sum of EMIs to be paid-out would be Rs. 2,10,192, out of which the interest will account for Rs. 10,189.
In the following illustration, for a car loan amount of Rs. 4,00,000 to be repaid in 36 months at an interest rate of 11% from Catholic Syrian Bank (Calculations based on EMIs paid in advance):
|Month||Principal||Interest Amount||Total Payment||Balance Due|
|Oct 2016||Rs. 9429||Rs. 3667||Rs. 13095||Rs. 3,90,571|
|Nov 2016||Rs. 9,515||Rs. 3580||Rs. 13,095||Rs. 3,81,056|
|Dec 2016||Rs. 9,602||Rs. 3493||Rs. 13,095||Rs. 3,71,453|
|Year||Principal||Interest Amount||Total Payment||Balance Due|
|2015||Rs. 28,547||Rs. 10,740||Rs. 39,286||Rs. 3,71,453|
|2016||Rs. 1,22,332||Rs. 34,814||Rs. 1,57,146||Rs. 2,49,122|
|2017||Rs. 1,36,488||Rs. 20,658||Rs. 1,57,146||Rs. 1,12,634|
|2018||Rs. 1,12,634||Rs. 5,225||Rs. 1,17,859||Rs.0|
Total interest amount to be paid for a Catholic Syrian Bank Car Loan amount of Rs. 4,00,000 for 36 months would be Rs. 71,438. Therefore, the total payment made by the end of the tenure is Rs. 4,71,438. The amount of principal that is paid increases with the tenure and the interest rate decreases until the loan is repaid completely.
Although the interest rate stipulated by the bank remains the same in most cases, there are various factors that can influence a Catholic Syrian Bank car loan interest rate. This could also affect the loan amount offered to a borrower as well as the amount of EMI to be paid per month. These in turn determines the amount that is given as a loan to the prospective customer, along with the EMI to be paid. Few of these factors are given below.
An individual's credit score is one of the initial checks made by the bank in order to ascertain his/her car loan eligibility and creditworthiness. The credit history of a borrower is reflected in his/her CIBIL score and this is a detrimental factor that influences the interest rate levied on a car loan. A high CIBIL Score ensures that the applicant will get a positive response from the Bank with regards to his/her car loan application and also empowers the applicant to be in a position of power while negotiating for a lower rate of interest. On the other hand, those who have a lower CIBIL score have lower chances of getting a car loan approved by Catholic Syrian Bank, and even if they do get an approval, a higher interest rate might be applicable on the same. This is because of the high risk involved in lending out to borrowers with an unstable credit history.
The Credit Information Bureau of India Limited undertakes the responsibility of tracking, analyzing and calculating an individual’s credit score based on his/her credit dues, loan payments, defaulted payments, late payments, etc. to generate a CIBIL TransUnion Score. This score is a 3 digit number which ranges from 300 up to 900. Most banks and NBFCs check the CIBIL score of its loan applicants while processing their loan applications and weigh this in context of other factors to decide whether the application can be approved. Higher scores ensure greater probability of procuring car loans at an attractive rate of interest. Those with higher CIBIL scores are also seen as a lower risk category and hence can avail loans more easily as compared to those with low CIBIL scores.