• Indian Overseas Bank (IOB) Car Loan Interest Rates

    Indian Overseas Bank (IOB) offers car loans for new and used cars at interest rates ranging between 9.15% p.a. and 11.15% p.a. The interest rate offered depends on factors such as the income, credit score, loan amount, loan tenure, and so on.

    Features New Car Loan Used Car Loan
    Interest rate 9.15% p.a.
    • Up to Rs.10 lakh: 10.15% p.a.
    • Above Rs.10 lakh: 11.15% p.a.
    Quantum of finance Up to 90% of the price of the car Up to 75% of the current market price of the car
    Loan tenure 84 months 84 months minus the age of the car
    Processing fee
    • Up to Rs.5 lakh: 0.50 %
    • Above Rs.5 lakh: 0.60 %
    Lowest EMI per lakh Rs.2,083 (at 9.15% p.a. interest for a 5-year tenure) Rs.2,132 (at 10.15% p.a. interest for a 5-year tenure)

    Other Charges

    Loan documentation charges Nil to Rs.5,000
    Foreclosure charges Nil

    Factors Affecting Indian Bank Car Loan Interest Rate

    The car loan interest rate offered by IOB is determined by many factors. A few of the factors and how they affect the rate are given below:

    • Income: IOB takes into account the income of the individual while sanctioning the loan. This is because the bank needs to ensure that the person has sufficient disposable income and can repay the loan on time. A higher income range could translate to a comparatively low interest rate.
    • Credit score: Credit scores play an all-powerful role these days when it comes to applying for a loan. A good credit score is directly related to your loan approval. If your credit score is high and you have a good rapport with the bank, they may offer a low rate of interest.
    • Loan tenure: The loan tenure the applicant chooses can also have an effect on the interest rate. The bank may offer a low interest rate if you choose to repay the loan over a longer period of time.
    • Car model: The model of the car is an important aspect taken into consideration since it acts as the security for the loan. In case the applicant fails to repay the loan, the bank will take over the vehicle. Banks usually check car models to ensure they have a good resale value in the future. So banks could offer a high interest rate for a car with a low resale value and a low interest rate for a car with a high resale value.
    • Age of the car: IOB offers different rates of interest for new cars and used cars. The rates are higher for new cars that require loans above Rs.10 lakh.


    1. What is the maximum age of a used car that will be financed by IOB?
    2. A used car under the age of 5 years can be financed with the help of IOB’s car loan.

    3. What form of security has to be provided to avail the car loan?
    4. The car that is purchased using the loan amount will automatically become the security. Hypothecation of the car needs to be bought and the bank’s lien on the car needs to be mentioned in the Registration Certificate of the car.

    5. Can NRIs apply for the car loan?
    6. Yes, NRIs can apply for the loan if a resident Indian act as the guarantee to the loan.

    7. What is the income eligibility to apply for IOB’s car loan?
    8. Your take home salary needs to be at least 50% of the gross salary after all deductions. Your income in addition to your spouse’s income needs to be at least Rs.8,000 to buy a car using IOB’s loan scheme.

    9. How can I repay the loan?
    10. You can repay the loan in the form of monthly instalments that will be the sum of a percentage of the principal amount and the interest amount. You can calculate the EMI payable using the online EMI calculator.

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