If you really think about it, it's easier getting a loan for a car than a loan for bus fare!

    IndusInd Car Loan Interest Rates 20 Jun 2019

    IndusInd Bank offers affordable vehicle loans at competitive interest rates depending on the model of the vehicle you wish to purchase. However, it is important to keep in mind that the interest rate you are ultimately offered for your car loan is a floating rate of interest and will depend on market fluctuations.

    Particular Charges
    New cars: 10.65% p.a. to 15.5% p.a. New multi-utility vehicles (MUV): 10.6% p.a. to 16% p.a. Used cars and MUVs: 12% p.a. to 18% p.a.
    Loan processing charges 0.5% of the loan amount (non-refundable), with a minimum payment of Rs.2,500
    Documentation charges Rs.2,000 (non-refundable)
    Loan tenure Minimum tenure: 12 months Maximum tenure: 60 Months
    Loan handling charges Up to 5% of the loan amount
    Stamping charges As per the Stamp Act of the State (non-refundable)
    Loan cancellation charges Rs.1,500 per cancellation
    Overdue monthly interest Up to 36% p.a., compounded on a monthly basis
    Swap charges - replacement of PDCs and repayment modes Up to Rs.500 per swap, per instance
    Foreclosure charges 2% to 5% of the outstanding principal amount
    Duplicate NOC issuance charges Rs.500 per vehicle, per issuance

    Under the retail banking umbrella, IndusInd Bank offers excellent auto financing solutions for purchasing private and commercial vehicles. With a wide range of vehicle models and brands covered, you can use an IndusInd Bank vehicle loan to buy your dream car or you can expand your business by taking a car loan for commercial use.

    Taking a car loan from IndusInd Bank is quite convenient since the bank promises a hassle-free documentation process, fast processing of your application, and complete transparency. You get to choose from tenures ranging from 12 months to 60 months. This way, you can make sure that the car loan you take is best suited to your needs.

    How do you Calculate the Interest Rate for a Car Loan from IndusInd Bank?

    Your car loan is repaid in equated monthly instalments (EMI). An EMI is the amount that you have to pay each month to IndusInd Bank once you take a vehicle loan. Your EMI includes both, the principal amount and the interest rate.

    When you make you repayments, you will realise that in the beginning, a major portion of your EMI goes towards paying the interest. As the loan tenure progresses, the amount you pay towards servicing the interest decreases and a major portion of your instalment goes towards servicing the principal amount.

    Why does this happen?

    Well, as you make payments each month, the amount you owe as principal decreases. Since interest is calculated on the outstanding principal, the interest slowly decreases over the course of the loan.

    You can use BankBazaar’s car loan calculator to help determine the EMI you need to pay each month. All you need to do is put in the loan amount, tenure, and the interest rate applicable. You also have the option of choosing whether you want to make prepayments on your loan. Once you put in the required details, hit calculate. The calculator will provide you with the EMI you need to pay each month as well as an amortisation table which details how much of your EMI goes towards paying off the principal and how much goes towards interest payments.

    Let’s use an example to understand this better. If you take a car loan of Rs.4 lakh and it is to be repaid in 36 months (February 2019 – February 2022) at an interest rate of 11% p.a. from IndusInd Bank, the EMI you need to pay each month is Rs.13,095.

    The amortisation schedule will look like this:

    Year EMI amount (Rs.) Interest amount (Rs.) Principal amount (Rs.) Balance due (Rs.)
    2019 1,44,051 35,448 1,08,603 2,91,396
    2020 1,57,147 25,551 1,31,596 1,59,800
    2021 1,57,146 10,322 1,46,824 12,977
    2022 13,096 119 12,977 0

    The total interest to be paid towards an IndusInd Bank Car Loan of Rs.4 lakh will be Rs.71,440.

    Factors affecting IndusInd Bank Car Loan interest rates

    There are multiple factors that affect the interest rate of your car loan. Some of these factors are:

    • Down payment: Banks decide the interest rate for a customer based on the amount you end up paying as down payment. So, if you have saved up for a car, you can use this amount as a down payment and borrow a smaller amount to fund your purchase.
    • Loan amount: The amount you borrow will also determine the rate of interest. A larger car loan means a lower down payment, which could mean a higher rate of interest.
    • Loan tenure: The longer the tenure of the loan, the lower the rate of interest. However, this also means that you will end up paying more in terms of interest. On the other hand, a shorter loan tenure means a higher rate of interest but the total amount of interest you end up paying is much lower. In such cases, making a decision is quite difficult. A good rule of thumb is to use a car loan EMI calculator and see how much you will have to pay each month for various tenures. If you think you can comfortably repay the EMI, choose that tenure.
    • Debt-to-income ratio: Your debt-to-income ratio also plays an important role in deciding the rate of interest you are charged for your car loan. This ratio is calculated by dividing your total debt obligations (this includes credit card payments, instalments on other loans, and other debt payments you have to make) by the amount you earn each month. In India, your income to debt ratio shouldn’t be more than 40% to 50%. This ratio is calculated to see if you have repaid all of your debts and you will be able to make prompt payments for your car loan.
    • Age and make of the vehicle: When you take a car loan, your car is hypothecated to the bank. This means that until you repay the loan, the car is considered as collateral. If you are unable to pay the loan, the bank can sell the car and use the money to clear the loan. As such, the make and model of the car plays an important part. Latest models have a higher resale value than older models and this too may play a part in determining the interest rate you are ultimately offered.

    How does your CIBIL score affect IndusInd Bank Car Loan Interest Rates?

    Your CIBIL score is one of the most important factors that will be considered by the bank before they approve your car loan application. If your credit score is good, the bank will be more willing to offer you a favourable interest rate. A poor score may lead to you having to pay a high rate of interest or it could also lead to your loan application being rejected.

    At the end of the day, if you meet the required eligibility criteria and have a good credit score, getting a car loan from IndusInd Bank will not be too much of a problem.

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