Indian Bank Car Loan

Indian Bank is one of the premier public sector banks in the country. It was established on 15 August 1907 as a part of the Swadeshi Movement. As on 31 March 2017, the bank has a dedicated team of over 20,924 staff to serve customers nationwide. As on 31 March 2017, Indian Bank reported a total business of Rs.3,14,654 crore and a net profit of Rs.1,405.68 crore. From auto loans to home loans and education loans, Indian Bank offers a range of loan schemes in an effort to provide easy access to credit to the citizens of the country.

Why take a Indan Bank Car Loan?

Cars have proven to be a convenient mode of transportation by land for short distance as well as long-distance travels. The Indian automotive industry is slowly transitioning from petrol and diesel cars to hybrid and electric cars in order to protect the environment from harmful emissions that pollute the air and affect living beings. Carmakers around the world are investing in the design and production of hybrid and electric vehicles. What’s more, the Indian government has set up an ambitious goal of having an all-electric fleet by 2030.

With the increase in production costs, top auto manufacturers in the market have increased the price of their cars this year. Due to the hike in car prices, it can be difficult to purchase a car of one’s choice using one’s savings. Fortunately, banks and Non-Banking Financial Companies (NBFCs) in the country are offering new and used car loans at attractive interest rates to eligible customers. Any salaried or self-employed individual between 21 and 65 years of age with a good credit score, a steady income, and a stable occupation can apply for a car loan. Therefore, those who are looking to purchase a new car to replace their old one or buy a dream car of their own for the very first time, can rely on low-interest rate car loans from a reliable bank or NBFC for auto financing.

Features of Indian Bank Car Loan

Indian Bank is one such top car loan lender in the country. The bank offers auto loans for the purchase of new and used two-wheelers and four-wheelers. Here are some important features of an Indian Bank car loan:

• Used car loans from Indian Bank can be used to purchase second-hand/pre-owned cars that are not more than 3 years old. The used cars must be certified by a reputable automobile engineer or valuer.
• The eligible customers for a car loan from Indian Bank include salaried employees, self-employed individuals, businessmen, professionals, pensioners, NRIs, and employees of other banks with NOC from employers concerned with minimum 3 years work experience.
• The maximum loan amount one can obtain from the bank is Rs.200 lakh for four-wheeler loans.
• The loan tenure for a car loan from Indian Bank ranges from 12 to 84 months depending on the loan amount and the type of loan - new or used car loan.
• Borrowers must submit a hypothecation of the car to be purchased as security to the bank. For car loans exceeding Rs.10 lakhs, an additional security equivalent to the borrowed sum has to be provided in the form of Fixed Deposit receipts, LIC policy, mortgage of immovable property or NSCs.
• The interest rate of an Indian Bank car loan starts at 9.95% p.a.
• A processing fee of 0.229% on the loan amount subject to a maximum of Rs.10,191 is levied by the bank.

Documents required to apply for an Indian Bank Car Loan

In order to apply for a car loan from Indian Bank, the applicant must download the application form from the bank website or get it from the nearest bank branch. Submit the duly-filled and signed form along with the necessary identity proof, age proof, income proof, and address proof. Here is a list of documents required to apply for a car loan at Indian Bank:

• Recently taken passport-size photographs.
• Identity proof - PAN card, voters ID, Driving License, Passport or Aadhaar card.
• Address proof - Ration card, voters ID, Passport, property tax receipt or utility bills such as electricity or telephone bills. Businessmen and industrialists have to submit proof of business address.
• Income proof/employment proof - The latest salary slip and bank statement.
• Proof of other income such as rent or interest on investment, if any.
• Income proof of businessmen and self-employed individuals - Last 3 years' balance sheet, income tax or wealth tax returns of the past 3 years.
• A copy of the applicant's driving license.
• Quotation for the car to be purchased from an authorised dealer.

Applicants can visit the bank website to locate the nearest Indian Bank branch in their locality using the Branch Locator tool.

Indian Bank Car Loan Interest Rate

The interest rate of a car loan depends on the following factors:

• Type of loan: Banks offer a lower interest rate for new cars compared to used/pre-owned cars although the price of a new car is higher than a used car.
• Credit score: An applicant with a high credit score of 700 and above can get a lower interest rate than an individual with a bad credit score.
• Existing customers: Banks reward the loyalty of their customers by offering a low interest rate on loans to existing customers with a pre-established relationship with the bank.
• Loan tenure: A short loan tenure usually means a higher EMI but lower interest payment whereas a long loan tenure means a lower EMI and higher interest payments.

Indian Bank offers car loans at floating interest rates. Indian Bank car loan Interest rate for new cars is 9.95% and used cars is 11.30%.

Indian Bank Car Loan Eligibility

Before applying for a car loan, applicants must always make it a point to check their car loan eligibility on the bank website in order to avoid loan rejection. Multiple loan rejections can have a negative impact on an individual’s credit score. Indian Bank car loan eligibility criteria are as follows:

• Age: The applicant must be 21 to 65 years of age.
• Income: Salaried or self-employed applicants must have a minimum annual income of Rs.2.4 lakh.
• Credit score: Individuals with a credit score of 700 or above are eligible for an Indian Bank car loan.
• Occupation: The applicant must have a minimum work experience of 2 years in the same field.

Those who have bad credit scores can improve it by paying their credit card bills on time and making EMI payments on the due date.

Indian Bank Car Loan EMI Calculator

With the advent of technology, it has become easier to calculate car loan EMI using the free online car loan EMI calculator available on the bank website or a reliable third-party website. It is easy and simple to use. Enter car loan details such as the loan amount, interest rate, and loan tenure into the tool and click on the ‘Calculate’ button. The result will be displayed in the form of an amortisation table which represents the loan repayment schedule.

The EMI result will consist of a breakdown of the principal amount, interest payment, EMI, outstanding due after each payment, etc. Varying combinations of the loan tenure, loan amount, and interest rate can be entered into the tool to get revised loan repayment schedules. Depending on the car loan EMI, borrowers can choose an affordable loan amount and a suitable loan tenure.

Indian Bank Car Loan FAQs

1. Is there a prepayment charge on car loans offered by Indian Bank?

   Car loan prepayment is not allowed at Indian Bank. Prepayment is the option to prepay a part or whole of the loan amount before the end of the loan tenure. Usually, borrowers opt for this feature so as to get rid off their car loan in a short period of time and to save up on interest.

2. Does Indian Bank offer car loan top-up?

   Yes, borrowers can avail an additional top-up car loan at Indian Bank provided they meet the eligibility criteria set by the bank.

3. What is a foreclosure charge?

   In case a borrower wants to repay the loan amount before the end of the loan tenure, the bank charges a fee called the foreclosure fee. It is usually a percentage of the outstanding loan amount that the borrower is ready to repay before the end of the repayment period. Indian Bank allows borrowers to foreclose their auto loans after 1 EMI.

4. What is a processing fee?

   Banks charge borrowers a small percentage of the principal loan amount as fee to process their car loan called the processing fee. Some banks waive off the processing fee on special occasions or for existing customers. Indian Bank charges a processing fee of 0.229% of the loan amount, subject to a maximum of Rs.10,191 plus tax.

5. What is the maximum repayment period of an Indian Bank car loan?

   Indian Bank offers car loans for a maximum loan tenure of 84 months/7 years depending on various factors such as the type of the loan, loan amount, and the eligibility criteria of the applicant.

6. Why is it important to calculate car loan EMI?

   A car loan is repaid is through equated monthly installments which consist of the principal and interest amounts over a specified period of time called the loan tenure. Car loan EMI calculation depends on factors such as the car loan amount, loan tenure, interest rate, processing fee, and prepayment. Borrowers can find out how much their car loan will cost them on a monthly basis based on the car loan EMI calculation. What’s more, depending on the car loan EMI results, applicants choose a suitable loan tenure so as to save up on interest payments. Likewise, borrowers can opt for an affordable car loan depending on the car loan EMI results.

7. What is a debt-to-income ratio?

   It is the ratio between a borrower’s income and the loan EMI that he or she has to pay each month. It is advisable to maintain a low debt-to-income ratio so as not to default on a car loan. Borrowers must ensure their EMI payments don’t exceed more than 50% of their loan EMI. A high debt-to-income ratio may lead to skipped or delayed EMI payments which can have a negative effect on the borrower’s credit score.

8. What is car loan EMI formula?

   Car loan EMI is calculated based on the below formula:

   E = P*r* (1+r)^n/([(1+r)^n]-1), where E is the equated monthly installment, P is the principal loan amount, r is the interest rate, and n is the loan tenure.

9. What is a good credit score?

   A credit score of 700 and above is considered to be a good credit score. An applicant with a good credit score has higher chances of loan approval than an applicant with a bad credit score. Similarly, a good credit score may also increase the chances of getting a low-interest rate car loan. The credit score of an applicant represents his or her creditworthiness.

10. What is minimum income requirement for a car loan at Indian Bank?

    Applicants must have a minimum net annual income of Rs.2.4 lakh to be eligible for a car loan from Indian Bank. The income criteria of an applicant represent his or her capacity to repay the loan without defaulting.

Applicants must have a minimum net annual income of Rs.2.4 lakh to be eligible for a car loan from Indian Bank. The income criteria of an applicant represent his or her capacity to repay the loan without defaulting.