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

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    City Union Bank (CUB) Car Loan Interest Rates is Rated as "Great!" by 1 Users

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    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.


    City Union Bank Car Loan Interest Rates

    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 2016

    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 2015:

    EMI

    Principal

    Interest Amount

    Total Payment

    Balance Due

    Oct 2015

    Rs. 23,890

    Rs. 0

    Rs. 23,890

    Rs. 4,76,110

    Nov 2015

    Rs. 18,038

    Rs. 5,852

    Rs. 23,890

    Rs. 4,58,072

    Dec 2015

    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.
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