As one of India’s top private sector banks, IndusInd Bank offers one of the best retail product portfolios with a multitude of value-added services to customers. Leveraging the latest technology, IndusInd Bank strives to be a leader in providing world-class services to banking customers inclusive of quality products and exceptional customer service. IndusInd Bank is widely known for a host of innovative banking solutions like Account My Number, Check-on-Cheque, Choice Money ATMs, Quick Redeem Service, Cash-on-Mobile, Direct Connect and 365 Days Banking.
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, customers can use an IndusInd Bank vehicle loan to buy their favourite car or to expand their businesses by investing on commercial vehicles. Availing a car loan from IndusInd Bank is quite convenient with hassle-free documentation, easy processing and an assurance of complete transparency. Borrowers can choose to repay with flexible tenures ranging from 12 to 60 months, with custom made loan schemes offered as suitable to a particular customer.
IndusInd bank offers affordable vehicle loans for new cars and multi-utility vehicles at competitive interest rates, depending on the model of the vehicle financed. Customers can get the best deals on car loans, based on their down payment amounts and amount financed. The interest rate offered for car loans varies depending on market fluctuations and is given out as a floating interest rate.
|Interest Rate||Up to 15% for cars and multi-utility vehicles|
|Loan Processing Charges||Up to 1% of the loan amount (Non-refundable)|
|Documentation charges||Up to Rs 5000 / vehicle (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 State’s Stamp Act (Non-refundable)|
|Loan Cancellation Charges||Rs 1500 per cancellation|
|Overdue monthly interest||Compounded monthly - Up to 36% per annum|
|Swap Charges - Replacement of PDCs and repayment modes||Up to Rs 500 / swap|
|Foreclosure Charges||5% of the outstanding principal amount|
|Duplicate NOC Issuance Charges||Rs 500 / vehicle / issuance|
IndusInd Bank car loans can be easily repaid with equated monthly installments or EMIs by customers. An EMI is the amount that has to be paid by a borrower every month to IndusInd Bank after availing a vehicle loan. The EMI amount is inclusive of the principal amount and the interest rate. Initially, borrowers have to pay major portions of monthly installment as interest charges, with a minimum portion dedicated to the principal amount. As the loan tenure progresses, the principal amount increases, with a reduction in the interest rate.
The EMI for an IndusInd 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. IndusInd Bank charges an interest rate of up to 15% for 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% 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, 05, 095, out of which the interest will be around Rs. 5095.
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% from IndusInd Bank (Calculations based on EMIs paid in advance):
|Year||EMI Amount||Interest Amount||Principal Amount||Balance Due|
|2015||Rs. 38,930||Rs. 7,009||Rs. 31,921||Rs. 3,68,079|
|2016||Rs. 1,55,718||Rs. 34,498||Rs. 1,21,220||Rs. 2,46,859|
|2017||Rs. 1,55,718||Rs. 20,471||Rs. 1,35,248||Rs. 1,11,611|
|2018||Rs. 1,16,789||Rs. 5,178||Rs. 1,11,611||Rs. 0|
The total interest to be paid towards an IndusInd Bank Car Loan for an amount of Rs. 4, 00,000 would be Rs. 67156.
There are multiple factors that affect the interest rate of a particular car loan. These might vary based on lender requirements and also the fluctuating market conditions.
Down Payment - Banks decide the interest rate for a customer based on the down payments done by the customer. If customers make a huge down payment then the bank will give a lower interest rate for the opted loan tenure. It is important that customers pay atleast 20% to 25% of the car price as down payment to ease out their EMIs. If the loan amount availed is lesser then lenders will not hesitate to give the best car loan deals to customers inclusive of affordable interest rates.
Loan Amount - The availed loan amount ties in directly with the down payment given. If a customer procures a car loan for a smaller amount, then the bank will definitely give out the loan at a competitive interest rate. The larger the down payment, the better are the chances for borrowers to get car loans at low interest rates.
Loan Tenure - Banks give lower interest rates for loans with short loan tenures. Since the customer has made a higher down payment, the obtained loan amount will be lower, which in turn shortens the loan tenure. Shorter loan tenures helps borrowers save on monthly installments in the long run as they do not have to bear the burden of paying extra interest costs.
Income to Debt Ratio - Another factor that determines the IndusInd Bank car loan interest rate would be the income to debt ratio for a customer. Any lender surveying a loan application, will always look at the debts repaid by applicants and also the income earned by the customer. This is mainly done to check whether the customer has repaid all his debts and if he would able to bear the cost of the new car loan with the current income earned. Having a clean record with regards to debt payments will always help borrowers get low interest rates for their car loans.
A CIBIL score is one of the most important factors that will be considered by a lending institution while approving a car loan. If the applicant has a good credit score, then the bank will give the best possible deal for the new loan. A good score always ensures that the customers get the car loan at low interest rates and a bad score will create additional hassles with regards to interest rates. Before applying for an IndusInd Bank car loan it is mandatory that customers make sure that all their previous debts have been repaid and the existing ones are being efficiently managed. This will ensure holding a good credit score which in turn helps get a low car loan interest rate.