|Type of vehicle||Loan tenure||Interest rate|
|New car||Up to 23 months||12.75%|
|Used car||All tenures||15.50%|
The following table is an illustration of the indicative lending rates offered by ICICI Bank on the car loan scheme effective April 3rd, 2014.
ICICI Bank helps turn a customer’s dream of owning a car into a reality. With attractive features on their loan schemes, buying a car becomes easier. Customers can avail of a loan for the purchase of a new car or a pre-owned car. ICICI Bank also offers loans against car. With loan amounts of up to 100% of the ex-showroom price coupled with long loan tenures, the ICICI Bank loan is appealing to car loan seekers. Customers can enjoy instant approvals, fast processing and minimal documentation. For existing ICICI Bank customers, the bank itself sends offers on eligible car loans and the documentation required is reduced even further.
ICICI rates of interest are determined based on a number of factors that could affect your car loan such as your customer relationship, car model and loan tenure. The table below depicts the range of interest rates for customers whose car loans were disbursed in the first quarter of the fiscal year 2016-2017. The mean interest rate is the sum of the rate of interest on all the ICICI loan accounts divided by the number of loan accounts.
|Interest Rate Range||New Car Loan||Used Car Loan|
The processing fees charged on loans for new cars are non-refundable.
|Below Rs. 2.5 lakhs||Rs.2500/-|
|Rs. 2.5 lakhs - Rs. 3.9 lakhs||Rs.3500/-|
|Rs. 4 lakh - Rs. 4.9 lakh||Rs.4000/-|
|Rs. 5 lakh - Rs. 9.9 lakh||Rs.4200/-|
|Rs. 10 lakh and above||Rs.5000/-|
|Type of charge||Fees|
|Prepayment Charges||Part-prepayments are not allowed on the loan. Full prepayment will be subject to charges: 5% of outstanding the loan amount + Interest outstanding for the remaining period.|
|Late payment charges||2% charged per month on the outstanding EMI.|
|Change from floating to fixed interest rate||1.75% of the outstanding principal amount.|
Before you apply for a car loan, you can check your eligibility and the affordability of your potential loan by using the online EMI calculators. An car loan EMI calculator is available on BankBazaar.com as well as the ICICI Bank website. These calculators help you determine whether you can afford the EMIs and the total interest payable. To use the EMI calculator on BankBazaar.com, follow these simple steps.
(Principal) X (Interest rate per month) X (1+Interest rate per month) to the power of loan tenure
[(1+Interest rate per month) to the power of loan tenure – 1]
In short, the formula is E = P*r*[(1+r)^n/(1+r)^n-1)]
E = EMI
P = Principal amount
R = Rate of interest per month
N = Number of years
Let’s assume that you take a car loan from ICICI Bank at the rate of interest of 10.71% for an amount of Rs. 5 lakhs for 3 years in October 2016, your loan details will be:
EMI = Rs. 16,301
Interest payable = Rs. 86,828
Processing charges = Rs. 4,200
Total amount payable = Rs. 5,91,028
|Year||Principal Paid||Interest Paid||Total Payment||Outstanding loan balance|
|2015||Rs. 35,833||Rs. 13,070||Rs. 48,903||Rs. 4,64,167|
|2016||Rs. 1,53,276||Rs. 42,332||Rs. 1,95,608||Rs. 3,10,891|
|2017||Rs. 1,70,523||Rs. 25,087||Rs. 1,95,610||Rs. 1,40,369|
|2018||Rs. 1,40,370||Rs. 6,337||Rs. 1,46,707||Rs. 0|
The ICICI Bank car loans for the purchase of new cars are based on a fixed interest rate. The interest rate will remain the same throughout the tenure of the loan. The interest rates offered could possibly range from 9.70% to 15.00% p.a. Your eligible interest rate for new and pre-owned cars depends on a few factors.
Customer relationship - ICICI is concerned with the relationship you have with them. Having a good credit history within the bank, a savings or current account, or a corporate salary account factors into your interest rates. The average quarterly balance you maintain with the bank will also play a role in your car loan. A person who has no relationship with the bank will most likely attract higher rates of interest if a loan is sanctioned from ICICI.
Car segment - The type of car you are looking to purchase will also be an important factor in determining interest rates on your ICICI car loan . Cars can be distinguished on their type, model and price. A sedan, a hatchback, a premium car and an SUV will attract different interest rates. Every car segment and the particular model will have different rates of depreciation as well. So if the bank needs to recover the loan amount in case you cannot pay back the loan, cars that retain their value will fetch a higher resale price. Therefore, your interest rates could be lower when you seek a loan on a highly valued car.
Loan tenure - The longer your loan tenure, the lower your rates of interest will be. At ICICI Bank, if you take a loan for less than 2 years, you’ll attract a higher interest rate of around 12.75%. When you take a loan for a longer tenure, you will pay more interest over the years, so ICICI can reduce your effective interest rate. Loans repaid over 36-84 months generally have a much lower interest rate of about 10.75%.
Age of the car - When you choose to buy a pre-owned car, the age and condition of the car will play a role in your eligibility and interest rates. Your eligible loan quantum will also be affected. Therefore, when buying a used car, ensure to get it checked out by a trustworthy mechanic. An old car means a shorter life of the car. ICICI offers loans of up to 80% on the valuation of the car for tenures as long as 5 years.
Product Variant - For existing loan customers seeking a car loan or a top up, ICICI takes into consideration the relationship you already have with them. Your interest rates will be decided based on your previous history and the loan amount you are seeking. Your previous loan amount cleared and repayment behaviour will also factor into the interest rates. If you are refinancing an existing loan, ICICI will determine your rates of interest based on the outstanding loan amount and current interest rates you are paying.
CIBIL scores are credit scores maintained in India by CIBIL which is the Credit Information Bureau of India Limited. Banks regularly report credit customers’ behaviour which is recorded and maintained by CIBIL. Based on the records, a score is determined which comes in handy for both the banks and the customers when they seek out loans or credit cards. Based on your prior history, banks can determine whether you will be a creditworthy customer or if you will potentially default on your payments. On the other hand, for the customer, if you have a good credit score, it will be easier to get a loan approved and even get better terms and interest rates. When you apply for a car loan from ICICI Bank, the bank will determine your loan approval and interest rates based on your relationship and history with ICICI Bank. They will also make a hard enquiry into your CIBIL score to see where you rank on the credit scale. If you have maintained good relationships and repayment records with other banks as well, you will be in a good position to bargain for lower interest rates. So CIBIL scores have come to play a very pivotal role in the credit world.
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