Central Bank of India Car Loan Interest Rates are affordable and along with flexible repayment options, this product is highly desirable compared to car loans offered by other banks. It “Cent Vehicle” car loan scheme to suit the requirements of Self-employed individuals, Salaried employees, Independent Entrepreneurs, agriculturists, NRIs, Companies, firms etc. who have a stable source of income. Central Bank of India Car Loan Interest Rate 2017 can be either fixed or floating.
|Loan amount||up to Rs. 75 lakhs|
|Minimum & Maximum Car Loan Tenure||Minimum Tenure - 12 months Maximum Tenure - 84 Months (7 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*|
“Cent Vehicle” auto loan scheme is offered by Central Bank, one of India’s leading public sector banks. Central Bank was founded in 1911 and is headquartered at Mumbai, India. The Bank currently has a strong presence in around 29 States and 6 Union Territories with over 4700 branch network across India, with 4 Extension Counters and 29 satellite offices. This car loan scheme can be used for the purpose of purchasing new or used vehicles, for personal use only.
How to Calculate Interest Rate on my Central Bank of India Car Loan
You can repay your car loan amount within the chosen loan tenure through Equated Monthly Installments or EMIs. This, basically is the amount that is to be paid back to Central Bank of India after availing the car loan and includes the principal amount as well as the interest amount. There will be an increase in the principal amount repaid and a reduction in the amount of interest that is paid out, 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]
In this formula,
P = the loan amount or principal,
R = interest rate per month [for an annual interest rate of 10.1%, the rate of interest will be 10.1/ (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. 20, 00,000 at an interest rate of 10.10% with a loan tenure of 4 years, an estimate of the total interest to be paid-out would be Rs. 4, 39,421. Therefore the total amount repaid would be Rs. 24,39,421.
In the following illustration, for a car loan amount of Rs. 14,00,000 to be repaid in 3 years at an interest rate of 10.1% from Central Bank of India (Calculations based on EMIs paid in advance):
|Month||Principal||Interest Amount||Total Payment (EMI)||Balance Due|
|Oct 2016||Rs. 33,456||Rs. 11,783||Rs. 45,240||Rs. 13,66,544|
|Nov 2016||Rs. 33,738||Rs. 11,502||Rs. 45,240||Rs. 13,32,805|
|Dec 2016||Rs. 34,022||Rs. 11,218||Rs. 45,240||Rs. 12,98,783|
|Year||Principal||Interest Amount||Total Payment||Balance Due|
|2015||Rs. 1,01,217||Rs. 34,503||Rs. 1,35,719||Rs. 12,98,783|
|2016||Rs. 4,31,304||Rs. 1,11,574||Rs. 5,42,878||Rs. 8,67,479|
|2017||Rs. 4,76,940||Rs. 65,938||Rs. 5,42,878||Rs. 3,90,540|
|2018||Rs. 3,90,540||Rs. 16,619||Rs. 4,07,158||Rs.0|
Total interest amount to be paid for a Central Bank Car Loan amount of Rs. 14,00,000 for 3 years would be Rs. 2,28,634. Therefore, the total payment made by the end of the tenure is Rs.16,28,634. The principal amount that is paid back in each EMI increases with the tenure and the interest rate paid out in the EMI decreases until the loan is repaid completely.
Factors Affecting Central Bank of India Car Loan Interest Rates
The Credit Information Bureau of India Limited generates the CIBIL TransUnion Score based on an individual’s credit history such as loan payments, credit dues, credit accumulated, secured and unsecured loans, etc. The CIBIL Score is a 3 digit number ranging between values 300 to 900. Banks scrutinize an applicant’s CIBIL Score to ensure whether he/she is eligible or creditworthy. This is weighed against other factors before a decision is made regarding whether or not to sanction the loan amount to the applicant.
An individual with a higher CIBIL Score has greater probability of procuring car loans at an attractively lower rate of interest, since this places the applicant in a position of power to negotiate interest on car loan. Those who have a low CIBIL score have a very limited chance of getting a car loan approved by Central Bank of India. If the loan amount is sanctioned, a higher interest rate might be levied on the same to balance the risk involved in lending out to borrowers with a low credit rating.
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