Catholic Syrian Bank Car Loan Interest Rates 27 May 2019

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.

How to Calculate Interest Rate on my Catholic Syrian Bank Car Loan

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]

Where,

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):

EMI per Month from Oct 2016:

EMI per year for 36 months (starting from October 2015 - September 2018) :

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.

Factors Affecting Catholic Syrian Bank Car Loan Interest Rates

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.

• Guarantee - if an individual with good means/ substantial income or existing relationship with Catholic Syrian Bank vouches for an applicant, he or she would be considered positively for the car loan. This also gives the borrower the added advantage of negotiating for a lower rate of interest.
• Loan Duration/ Tenure - The term chosen for your car loan also has a great effect on the applicable interest rates. Longer the payback period, higher will be the interest rate and vice-versa. Generally, borrowers prefer to avail a longer tenure so that the EMI amount can be reduced. However, this increases your expenses since longer tenures means higher rate of interest rate.
• Debt-to-Income Ratio - The lower your debt-to-income ratio the better your chances are for claiming an attractive rate of interest. This is because the Bank will be assured that the borrower has a good repayment capacity and is therefore creditworthy. In such cases banks are willing to negotiate a lower rate of interest on the loan amount borrowed as there is minimal risk of defaulting on the loan. Eligibility criteria differs for different categories of employed individuals, such as if the applicant is self-employed then the minimum income requirement varies as compared to that of a salaried individual.
• Downpayment - The percentage of loan margin or downpayment that is paid by the borrower out of his own savings also has an ancillary influence on the borrower's car loan interest rate. This is inversely proportional since the higher the downpayment the lower is your interest rate on the car loan.
• CIBIL Scores - An individual’s credit history is reflected in his/her credit score. CIBIL score is one of the most popular credit rating measures undertaken by banks. This score is generated based on the Credit Information Report. If a borrower’s CIBIL score is high, he/she is considered more creditworthy and legitimate and thereby, the chances of getting the car loan approved is very high. This will also influence the bank to lower the rate of interest that is applicable on the loan quantum of your choice. If an applicant has a CIBIL score which is 750 or above, he/she is considered eligible for a car loan by most creditors/ lenders.
• Existing Customers - Those who are existing customers of Catholic Syrian Bank have a higher probability of getting a car loan quickly, at lower rates of interest. Catholic Syrian Bank offers various car loan benefits for established customers of the Bank and for those who have any deposits in Catholic Syrian Bank who apply for a car loan. VIP Car Loan scheme is offered to individuals/groups who wish to purchase a vehicle for personal use and meet the following eligibility criteria: they should have an annual income of Rs 25 lakhs and more or have a term deposit with Catholic Syrian Bank for the same amount.

How CIBIL scores affect Catholic Syrian Bank Car Loan Interest rates

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.

Key Pointers to know about Catholic Syrian Bank Car Loan Interest Rates

• Catholic Syrian Bank Car Loan is offered only for the purchase of a van, car, jeep or similar vehicle, for individual use.
• Catholic Syrian Bank offers car loans to borrowers for purchase of a vehicle from the following preferred manufacturers: FIAT, Chevrolet, Ford, HINDUSTAN MOTORS, GENERAL MOTORS INDIA, Hyundai, Honda, Mahindra, Mercedes-Benz, Maruti, Mitsubishi, Reva, Nissan, SAN Engineering, Tata Motors, Skoda, Toyota, etc.
• Expenses which are not considered by Catholic Syrian Bank while determining the loan quantum disbursed to a borrower are as follows:
• VIP Car Loan - Insurance (premium to be paid), vehicle registration charges, road taxes, etc. are excluded.
• CSB Car Loan (Regular) - vehicle registration charges, vehicle insurance costs, etc. are excluded.