Established in 1927 in Thrissur, Kerala, Dhanlaxmi Bank carries a rich banking history and is popularly known for the vast range of services that it offers to customers in India. Founded by various entrepreneurs, Dhanlaxmi Bank functions with the belief that innovation and dedication form a key part of its service delivery and always strives to earn the trust of its banking clients. With an assurance of complete transparency to customers, Dhanlaxmi Bank has risen to be one of the important banks in India, with a bouquet of offerings ranging from personal banking, corporate banking, NRI banking, SME banking, micro and agri banking. Dhanlaxmi Bank provides tailor made services to customers, with the help of the latest technology available.
As part of its retail portfolio, Dhanlaxmi Bank offers car loans for new vehicles at affordable interest rates and convenient loan processing procedures. Customers can take loans from Dhanlaxmi Bank for a new car, luxury vehicle or sedan and get up to 95% of the ex-showroom price of the new vehicle purchased. Flexible loan repayment options are available to customers with loan tenures ranging from 12 to 60 months. Dhanlaxmi Bank ensures that customers get their sanctioned loans through a quick approval process with minimal documentation required. Depending on the loan tenure chosen by the customer, the monthly installment amount and interest rate will be calculated, thereby making it very comfortable for the borrower to repay back the car loan.
Dhanlaxmi bank car loans can be availed by salaried individuals, entrepreneurs and corporates at competitive interest rates. Borrowers can get the best rates on their car loans if they pay a reasonable amount as the down payment and also ensure that their credit score is good. The interest rate offered for Dhanlaxmi Bank car loans varies depending on market fluctuations and is given out as a fixed interest rate, which is also the current base rate of the bank.
|Loan Processing Charges||1% of the loan amount|
|Part Prepayment Charges||NA|
|Cheque Bounce Charges||Rs 500 plus service tax|
|Loan Foreclosure charges||2% of the outstanding principal amount plus service tax|
|Late Payment Charges||3% per month|
|NOC issuance charges||Nil for 1st issuance After that a fee of Rs 500 plus service tax will be charged.|
|Customer Credit Information Report (Will be provided only during loan processing)||Individual Customers - Rs 200 Other Customers - Rs 750|
|Loan Tenure||12 to 60 months|
|Quantum of Loan||95% of the Ex-showroom price / 85% of the On-road price|
Any customer availing a Dhanlaxmi Bank car loan can easily repay back the loan using equated monthly installments or EMIs. EMI is the amount that has to be paid by a customer on a monthly basis to Dhanlaxmi Bank after availing a car loan. The EMI amount is the sum of the principal amount and the interest rate charged by the bank. At the beginning of the loan tenure, borrowers have to pay huge portions of monthly installment as interest charges, with a small portion allocated for the principal amount. As the loan tenure advances, the principal amount increases, and there will be a reduction in the car loan interest rate.
The EMI for a Dhanlaxmi Bank car loan can be calculated as follows -
EMI (E) = [P x r x (1+r) ^n]/ [(1+r) ^n-1]
P = The Principal Loan Amount
R = The Interest rate charged per month. Dhanlaxmi Bank charges a fixed interest rate of 11.50% for new car loans.
N = Number of monthly installments i.e. the number of years opted for the repayment of loan.
For a principal amount of Rs. 1, 00,000 given at an interest rate of 11.50% and a loan tenure of one year, an estimate of the total sum of EMIs that has to be paid by the borrower is Rs. 1, 06,339 out of which the interest will be around Rs. 6339.
In the following example, for a car loan amount of Rs. 4,00,000 to be repaid in 36 months at an interest rate of 11.50% from Dhanlaxmi Bank (Calculations based on EMIs - paid in advance):
|Year||EMI Amount||Interest Amount||Principal Amount||Balance Due|
|2015||Rs. 39,571||Rs. 11,230||Rs. 28,341||Rs. 3,71,659|
|2016||Rs. 1,58,285||Rs. 36,452||Rs. 1,21,833||Rs. 2,49,826|
|2017||Rs. 1,58,285||Rs. 21,678||Rs. 1,36,606||Rs. 1,13,220|
|2018||Rs. 1,18,714||Rs. 5,494||Rs. 1,13,220||Rs. 0|
The total interest to be paid towards a Dhanlaxmi Bank Car Loan for an amount of Rs. 4, 00,000 would be Rs. 74,854.
There are multiple factors affecting the interest rates given to customers by Dhanlaxmi Bank. Some of the common factors playing a key role have been explained below -
The income of an applicant plays an important part in determining the interest rate for a Dhanlaxmi Bank car loan. Banks prefer individuals with a lower debt to income ratio. While making approvals lenders will make sure that the applicant has the required income to repay the car loan and also does not carry a lot of debts. The income eligibility criteria can be improved by adding a co-applicant with a good credit history, thereby helping the borrower get a lowered rate of interest.
Customers making higher down payments can always enjoy the advantage of getting low interest rates on their car loans. Banks have to sanction only smaller loan amounts if the down payment is huge and this reduces the risk factor for them. This also ensures that the borrower gets the lowest interest rate possible. New car loan borrowers must always make sure that they are well-prepared financially to pay a higher sum as down payment, to get attractive interest rates.
If customers opt for a longer loan tenure, they will have to pay higher amounts as interest rate in the long run. Interest rates change with market fluctuations and depending on that the monthly installment amounts might also increase or decrease. It is always advisable to go for a shorter loan tenure and pay lesser amounts as interest rates. Also lenders, give better interest rates to customers paying higher down payments, thereby shortening their loan terms.
Applicants who carry a load of debts and do not have a regular payment pattern will not get the best deals on interest rates. The debt to income ratio is important to determine whether the borrower has the required financial capacity to repay the car loan. So, before applying for a Dhanlaxmi Bank car loan, customers must ensure that they have sufficient funds, with all the outstanding debts capably managed. This will definitely get a borrower, car loans with comparatively lower interest rates.
CIBIL score is one the most important aspects of an applicant, that a lender would take a deep-dive into. Generally, applicants are expected to carry a good credit score with the required financial standing. Customers who show irregular payment patterns and have huge volumes of debts and liabilities, might easily face rejections or might get car loans at higher interest rates. A good or a higher credit score will definitely give a boost to the applicant’s profile before the lender, with the assurance of getting lower interest rates.