|Interest Rate||Loan amount up to Rs. 50 lakhs – 9.40% Loan Amount above Rs. 50 lakhs – 9.90%|
|Maximum Loan Amount||Rs. 1 Crore|
|Minimum & Maximum Car Loan Tenure||Minimum Tenure - 12 months Maximum Tenure - 84 Months (7 years)|
|Processing Fees/Charge||As applicable by the bank|
|Foreclosure/ Pre-payment Charges||nil|
|EMI per Lakh (for 7 year loan tenure)||Rs. 1,656*|
*Estimated value of EMI, when paid in advance.
Corporation Bank offers car loan under the Corp Vehicle Scheme to individuals, Businessmen, Professionals and other salaried individuals, Sole Proprietorships, NRIs, Partnership Firms, Trusts, Companies, Institutions and HUFs. Under this scheme, the borrower can avail a loan quantum of up to Rs.1 crore per vehicle. Loan margin is 40% in case of old vehicles. Hypothecation of the car will be required as security against the auto loan. For this scheme, third party guarantee is not mandatory.
Corporation Bank offers its Corp Vehicle Scheme at an affordable rate of interest. The repayment options available to a customers is highly attractive due to its flexibility. Applicants who have a net annual income of at least Rs.1.20 lakhs, is eligible to avail this loan. The interest rate is applicable on the principal amount on the basis of monthly reducing balance.
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 lump sum expense. By paying nominal rates of interest for a loan tenure of your choice, you can own your dream car.
If you wish to know how EMI on your car loan is calculated, the formula that is used to derive it is as follows:
EMI (E) = [P x r x (1+r) ^n]/ [(1+r) ^n-1]
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 10.20%, the rate of interest will be 10.20/ (12 x 100)],
N is the number of monthly instalments made/ no. of months taken for car loan repayment.
For example: If you take a car loan for Rs. 7,00,000 at an interest rate of 10.20% for a loan tenure of 5 years, Rs. 1,88,958, would be the total interest payable and the total payment made would be Rs. 8,88,958.
In the following illustration, for a car loan amount of Rs. 10,00,000 to be repaid in 2 years at an interest rate of 10.20% from Corporation 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. 45,848||Rs. 0||Rs. 45,848||Rs. 9,54,152|
|Nov 2015||Rs. 37,737||Rs. 8,110||Rs. 45,848||Rs. 9,16,415|
|Dec 2015||Rs. 38,058||Rs. 7,790||Rs. 45,848||Rs. 8,78,357|
|Year||Principal||Interest Amount||Total Payment||Balance Due|
|2015||Rs. 1,21,643||Rs. 15,900||Rs. 1,37,543||Rs. 8,78,357|
|2016||Rs. 4,82,733||Rs. 67,438||Rs. 5,50,171||Rs. 3,95,624|
|2017||Rs. 3,95,624||Rs. 17,004||Rs. 4,12,628||Rs. 0|
Total interest amount to be paid for a Corporation Bank Car Loan amount of Rs. 10, 00,000 for 2 years would be Rs. 1, 00,342. Therefore, the total payment made by the end of the tenure is Rs. 11, 00,342. The rate of interest gradually decreases as the EMI is repaid and the principal loan amount repaid in the EMI increases with the tenure.
Every Bank and NBFC carefully scrutinizes an Individual’s CIBIL Score before sanctioning a car loan to him/her. An individual's credit score helps the bank to determine his/her car loan eligibility and creditworthiness. The credit history of a borrower is reflected in his/her CIBIL score and this is a detrimental factor that influences the interest rate levied on a car loan. The CIBIL TransUnion Score is a 3 digit number which ranges from 300 up to 900. The applicant can negotiate a lower interest rate on his/her car loan if he/she has a high CIBIL Score. This also ensures that the applicant will get a positive response from the Bank with regards to his/her car loan application. Higher scores ensure greater probability of procuring car loans at an attractive rate of interest since the banks consider them to be in the lower risk category.
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