If you really think about it, it's easier getting a loan for a car than a loan for bus fare!
  • Car Loan BYTES FROM OUR KITCHEN

    City Union Bank (CUB) Car Loan Interest Rates 20 Jun 2019

    City Union Bank car loan?is a product offered for the middle-class Indian population. Keeping this in mind, the bank offers a highly affordable car loan interest rate to its borrowers. The interest rate is applicable on the principal amount on the basis of monthly reducing balance.

    Particular Charges
    Interest Rate 14.50%
    Maximum Loan Amount Rs.5 lakh
    Minimum & Maximum Car Loan Tenure Minimum Tenure - 12 months Maximum Tenure - 60 Months (5 years)
    Processing Fees/Charge 1.25% of the loan amount or a minimum amount of Rs.700, whichever is highest

    City Union Bank offers car loan to individuals as well as corporates for the purpose of purchase of new cars, under its “CUB Yoha Vahana” car loan scheme. A loan quantum of up to Rs.5 lakh is provided to the borrower, who earns more than Rs. 1.50 lakh annually. City Union Bank was known as 'The Kumbakonam Bank Limited' at the time of its inception in 1904. In 1945, the Bank was included in the Schedule as per the Reserve Bank of India Act, 1934. The Bank assumed control over Common Wealth Bank Limited in 1957 and extended its network across the country.

    How to Calculate Interest Rate on my City Union Bank Car Loan

    With the flexibility of paying back your car loan in the form of Equated Monthly Installments(EMIs), customers can easily own a car without having to bear the brunt of a lumpsum expense. By paying nominal rates of interest for a tenure of your choice, you can get your dream car. When the loan tenure increases there would be an increase in the loan amount and a reduction in the rate of interest to paid.

    If you wish to know how EMI on your car loan is calculated, here is the basic formula that is applicable:

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

    Here,

    P stands for the principal or the loan quantum,

    R is the rate of interest applicable per month [ Therefore, for an annual interest rate of 14.50%, the rate of interest will be 14.50/(12 x 100)],

    N is the number of monthly installments made/ no. of months taken for car loan repayment.

    For example: If you take a car loan for Rs.3 lakh at an interest rate of 14.50% with a loan tenure of two years, an estimate of the total interest payable would be Rs.47,396, and the total payment made by you at the end of the tenure will amount up to Rs.3,47,396.

    In the following illustration, for a car loan amount of Rs.5,00,000 to be repaid in 2 years at an interest rate of 14.50% from City Union Bank (Calculations based on EMIs paid in advance), the EMI per year from February 2019:

    Year Principal Interest Balance
    2019 Rs.2,11,378 Rs.53,994 Rs.2,88,622
    2020 Rs.2,64,786 Rs.24,711 Rs.23,837
    2021 Rs.23,837 Rs.288 Nil

    Total interest amount to be paid for a City Union Bank Car Loan amount of Rs.5,00,000 for 2 years would be Rs.78,993. Therefore, the total payment made by the end of the tenure is Rs.5,78,993. The interest rate decreases until the loan is repaid and the principal loan amount repayment increases with the tenure.

    How CIBIL scores affect City Union Bank Car Loan Interest Rates

    The CIBIL TransUnion Score is a 3-digit number which ranges from 300 up to 900 and this score reflects an individual's credit history. This is evaluated by banks in order to decide whether he/she is eligible for a loan or any other credit and what his/her repayment capacity is. 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. Most banks and NBFCs conduct this initial check while processing their applicant’s creditworthiness for the loan. 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 Points to Note About City Union Bank Car Loan Interest Rates

    • Third Party Guarantee strengthens the probability of a favorable loan sanction with lower interest rates. The spouse or any other individual who meets the eligibility criteria under this Scheme, can act as a Co-obligant.
    • The loan margin applicable is 10%
    • The car loan amount is directly disbursed to the car dealer or seller.
    • Maximum loan amount provided to a customer is Rs.5 lakh
    • This loan is offered to corporates or individuals who earn a net monthly income of more than Rs.15,000.
    • Professionals who earn Rs.1.5 lakh and above p.a. are also eligible for this car loan.
    • This car loan is not offered for the purpose of purchase of used vehicles.
    • Moratorium period is not provided on repayment of loan.

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