Corporation Bank Car Loan Interest Rates 04 Jul 2020

Corporation Bank offers the Corp Vehicle Scheme to finance brand new as well as second-hand cars at interest rates between 8.85% p.a. to 10% p.a. You can borrow up to Rs.1 crore for a maximum period of 7 years under this scheme. The bank does not levy any pre-closure or prepayment charges and charges a nominal processing fee equal to 1% of the loan amount.

Corporation Bank Car Loan

*No processing charges in 2019 from 1 June 2019 up to 30 September 2019 under the Monsoon offer.

Other Charges

Factors Affecting Corporation Bank Car Loan Interest Rates

Given below are a few of the many factors that decide the interest rate levied on your car loan by Corporation Bank:

• Loan amount: Banks usually decide the interest rate on looking at the loan amount. Corporation Bank has different interest rates for loan amounts below Rs.50 lakh and above Rs.50 lakh. The interest rate for the larger amount is higher.
• Tenure of the loan: If the borrower chooses a longer tenure for repayment of his/her car loan it might make the bank levy a higher interest rate on the loan. This is because the bank considers this as a higher risk factor for defaulting on loan repayment. In order to balance this risk the bank might increase the interest rate charged on the car loan. On the other hand, if you opt for a lower loan tenure, this assures the bank of faster repayment so you can expect a lower interest rate.
• Income: Applicants who earn an income falling within the income eligibility criteria, especially with a higher income and lower debt outflow, are deemed more creditworthy by banks. In this situation, the applicant can negotiate with the bank for a lower rate of interest.
• Profession: Corporation Bank takes into consideration the profession of the bank when it decides the interest rate to be offered. Usually, the interest rate for a job that poses as a high-risk job will have a higher rate of interest. Additionally, the bank offered a much lower rate of interest for employees of the Central and State government as well as defence personnel.
• Credit score: If the credit score of an applicant is high, he/she is considered more creditworthy. Therefore, 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.
• Bank’s existing customers: Existing customers of Corporation Bank will have better chances of availing an advantageous car loan package for themselves. Corporation Bank offers various car loan offers for established customers of the Bank at lower rates of interest.

FAQs

1. Apart from the cost of the car, what else can the loan amount cover?

For new car loans, the loan amount you choose can include registration charges, road tax, accessories, body-building charges, insurance costs, etc.

2. What is the maximum age of a second-hand car that can be financed by Corporation Bank?

Second-hand cars less than 3 years old can be financed under Corporation Bank’s Corp Vehicle Scheme.

3. Is there a margin under the car loan by Corporation Bank?

Yes, the bank has given a 15% margin for loan amounts below Rs.1 crore, a 20% margin for loan amounts above Rs.1 crore, and a 40% margin for second-hand car loans.

4. What is the security under the car loan?

The car being financed will act as security under the Corp Vehicle Scheme. Hypothecation of the car is necessary.

5. Is there an age limit on the repayment tenure?
• Salaried class: The repayment period cannot exceed your age of retirement.
• Non-salaried class: The repayment period cannot extend beyond the age of 70 years of age unless the co-applicant has an independent income that can help repay your loan.