If you really think about it, it's easier getting a loan for a car than a loan for bus fare!
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  • City Union Bank (CUB) Car Loan Interest Rates is Rated as "Pretty good" by 4 Users

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    City Union Bank (CUB) Car Loan Interest Rates

    Overview About City Union Bank Car Loan

    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, 00,000/- is provided to the borrower, who earns more than Rs. 1.50 lakhs 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.


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    City Union Bank Car Loan Interest Rates 2017

    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.

    City Union Bank Car Loan Interest Rates 2017

    Interest Rate 14.75%
    Maximum Loan Amount Rs. 5,00,000
    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. 600, whichever is highest
    Foreclosure/ Pre-payment Charges 2% of preclosure amount
    EMI per Lakh (for 5 year loan tenure) Rs. 2337*
    • Estimated value of EMI, when paid in advance.

    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 14.75%, the rate of interest will be 14.75/(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. 3,00,000 at an interest rate of 14.75% with a loan tenure of two years, an estimate of the total interest payable would be Rs. 44,021, and the total payment made by you at the end of the tenure will amount up to Rs. 3,44,021.

    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 14.75% from City Union Bank (Calculations based on EMIs paid in advance), the EMI per month from Oct 2016:

    EMI Principal Interest Amount Total Payment Balance Due
    Oct 2016 Rs. 23,890 Rs. 0 Rs. 23,890 Rs. 4,76,110
    Nov 2016 Rs. 18,038 Rs. 5,852 Rs. 23,890 Rs. 4,58,072
    Dec 2016 Rs. 18,260 Rs. 5,630 Rs. 23,890 Rs. 4,39,812

    EMI per year for 2 years (starting from October 2015 - September 2017):

    Year Principal Interest Amount Total Payment Balance Due
    2015 Rs. 60,188 Rs. 11,483 Rs. 71,671 Rs. 4,39,812
    2016 Rs. 2,37,439 Rs. 49,245 Rs. 2,86,684 Rs. 2,02,373
    2017 Rs. 2,02,373 Rs. 12,640 Rs. 2,15,013 Rs. 0

    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.73,368. Therefore, the total payment made by the end of the tenure is Rs.5,73,368. The interest rate decreases until the loan is repaid and the principal loan amount repayment increases with the tenure.

    Factors Affecting City Union 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 City Union 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 - Along with the applicant, the spouse / or may other individual who is fulfilling the eligibility criteria under the Scheme is to stand as Co-obligant. If together they have a substantial income that backs their creditworthiness, the applicant can get the car loan approved. In this case, the borrower can bargain for a lower car loan interest rate.
    • Loan Tenure - If the tenure you have chosen for your car loan is longer, it indicates higher risk of default payments to the bank. To negate this risk the bank might increase the interest rate applicable on the loan. By going for a lower loan tenure, the bank will be assured of quicker repayment so you can expect a lower interest rate.
    • Income- Applicants with higher income are more creditworthy since they have a higher repayment capacity. If this is the case then you can negotiate with the Bank for a lower rate of interest.
    • Down payment - The percentage of loan margin or down payment 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 down payment 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.

    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. 5,00,000/-
    • This loan is offered to corporates or individuals who earn a net annual income of more than 15,000 per month.
    • Professionals who earn Rs. 1,50,000/- and above in a year is 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.

    Car Loan Reviews

    • City Union Bank Car Loan
      "Its Excellent"
      0.5 4.0/5 "Great!"
      Being a staff of city union bank, they offered me good car loan offer. I have submitted only my RC copy and hypothication and insurance of the car. Within two days they have processed my car loan with the interest rate of 8.85% . My vehicle price was around Rs.10 lakhs, I have paid Rs.2 lakhs as processing fee remaining all converted into an EMI.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jul 03, 2017
    • City Union Bank Car Loan
      "Need Transparency in the process"
      0.5 1.0/5 "Really Bad"
      I got a car loan experience with City union bank 7 years ago. It was very bad experience. When I got the loan thy haven't explained me about the product and their interest rate. At the time of purchase, the interest rate was 13%, they have charged the processing fee of Rs,4000. After a year they have made an additional charges around Rs,2700, I got this car loan with the floating interest rate and they never informed me about the floating interest rate and then I have started paying the 14.2% from the 2nd Year. By the end of 5th years I paid around 15 % interest rate for the car loan. They need to have transparency in their service .
      Was this review helpful? 0
      , bangalore
      Reviewed on Jun 03, 2017
    • City Union Bank Car Loan
      "Satisfied Experience"
      0.5 5.0/5 "Blown Away!"
      City Union Bank was excellent in all aspects, I directly visited to the branch and approached for car loan. Based on existing current account they had considered and processed my application. But I informed them will get my new car in 2017. Overall I was satisfied with CUB Bank.
      Was this review helpful? 0
      , chennai
      Reviewed on Nov 28, 2016
    • City Union Bank Car Loan
      "Best customer service"
      0.5 4.0/5 "Great!"
      I availed car loan from Citi union bank before 3 years and everything is pretty good. If the customer is an existing customer, loan disbursement happens within 1 day and am feeling happy about it. Interest rate and processing charges are quite higher but it can be compensated with the customer service. I was able to get my 85% of the loan amount which i quoted.
      Was this review helpful? 2
      , kolkata
      Reviewed on Jun 02, 2014
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