Founded in 1926, Lakshmi Vilas Bank was set up to cater to the financial needs of customers in and near Karur. The bank was designed to help people in agriculture, industry and trading businesses. In 1958, the bank secured its license from the RBI and became a scheduled commercial bank. The bank then underwent expansion across India and now has a network of 405 branches with over 820 ATMs in India.
The Lakshmi Vilas Bank Car Loan is available to a wide range of eligible customers at attractive rates of interest. Avail of a loan for the purchase of a new or a used vehicle. The loan process is simplified with quick processing and hassle-free service. Pay back the loan in long tenures of 72 months for new cars and 36 months for used cars. Lakshmi Vilas Bank Car Loan scheme comes with attractive norms that makes buying a car much easier and financially convenient.
Lakshmi Vilas Bank Car Loan rates of interest is determined by the base rate plus the bank’s interest rate. The base rate is currently 10.95%. The following table depicts the Lakshmi Vilas Bank Car Loan interest rates for 2017.
|Type of vehicle||Breakdown||Effective rate of interest|
|New Cars / Vans & Jeeps||BR+0.50%||11.45 % p.a.|
|Used Cars / Vans / Jeeps||BR+3.00%||13.95 % p.a.|
Useful information on other charges and requirements
Apart from interest rates, the table below depicts a simplified breakdown of the Lakshmi Vilas Car Loan.
|Minimum income requirements||Rs. 1,20,000 p.a.|
|Maximum age of the borrower||65 years upon date of maturity|
|Margin for new cars||15% of the invoice value|
|Margin for used cars||40% of the cost of the vehicle|
|Maximum age of used car||4 years from date of first registration|
|Maximum loan amount on new cars||Rs. 25 lakhs|
|Maximum loan amount on used cars||Rs. 10 lakhs|
|Maximum loan tenure for new cars||72 months|
|Maximum loan tenure for used cars||36 months|
Calculate the interest payable on your potential Lakshmi Vilas Bank Car Loan in a few simple steps. There are a number of EMI calculators available online. BankBazaar.com has calculators to help you calculate just about everything you need on any of your loans. If you are opting for a car loan, follow these simple steps to know your loan details.
You can also calculate the interest on your Lakshmi Vilas Bank car loan manually by using this formula:
E = P*r*[(1+r)^n/(1+r)^n-1)]
P = Principal
E = EMI
R = Rate of interest per month
N = Number of years
The formula translates to:
(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]
For example, if you take a Lakshmi Vilas Car Loan starting in October 2016, for Rs. 4 lakhs at 11.45% for a tenure of 3 years, your EMI will be = [400000 *0.954% [(1+0.954%)^4/(1+0.954%)^4-1)]
According to the calculator:
When you calculate your loan EMI, an amortization schedule will be generated giving you all the details of your loan for every month of the tenure. The following amortization schedule is the condensed version per annum. The loan amount is assumed to be Rs. 4 lakhs, for a period of 3 years, at 11.45% interest with 1% processing fee sanctioned in October 2015.
|Year||Principal Paid||Interest Paid||Total Payment||Outstanding loan balance|
|2015||Rs. 28,362||Rs. 11,181||Rs. 39,543||Rs. 3,71,638|
|2016||Rs. 1,21,884||Rs.36,288||Rs. 1,58,172||Rs. 2,49,756|
|2017||Rs. 1,36,595||Rs. 21,576||Rs. 1,58,171||Rs. 1,13,161|
|2018||Rs. 1,13,162||Rs. 5,467||Rs. 1,18,629||Rs. 0|
Credit Score - Your credit history is recorded by the banks and maintained by CIBIL. A good credit score translates to you being a good customer. Banks will be relaxed in lending you money as you have proved to be a good customer in the past. A good score puts you in a position to bargain for better interest rates. A low score leads to you being rejected for a loan. In case you secure a car loan with a low credit score, the banks may levy higher interest rates, and stricter terms and conditions on your loan.
Income - Income is a major criteria when getting a loan sanction. Lakshmi Vilas Bank requires you to be earning at least Rs. 1,20,000 annually to avail of a car loan. You can also add your spouse’s income to make up the eligibility criteria. More income means that you will be able to repay the loan. Banks can be assured that you have enough money to repay the loan. This is a favourable situation for your loan and your interest rates. Banks may also lend at lower rates to lower income brackets as the burden of the loan is more.
Down Payment - A smaller down payment means you have a larger loan amount to clear during the tenure of your loan. This is a riskier situation for the banks as they have a bigger sum to recover in case you default completely on the loan. Therefore, with a larger down payment, banks will have to bear less risk. This could work in your favour for better loan rates.
Loan Tenure - A short loan tenure will result in your EMI being higher but you will be paying lesser EMIs and will clear your loan faster. The total interest you pay in 2 years is significantly lesser than if you took a loan for 4 years. Furthermore, a shorter tenure is less riskier for the bank. There’s lesser time for a number of misfortunate events and market fluctuations to take place. The terms and conditions on your loan, including your interest rate could be negotiated when you take a loan for a short tenure. On the other hand, a longer tenure results in you paying more interest.
Car model and age - In case you default on your loan, banks will have no other choice but to seize the vehicle and resell it to recover the loan money. Car models depreciate
differently. Some retain value even after a long time, but others can see a drop in value almost immediately after purchase and use. Choosing a car model which retains its value will be favourable. While buying second-hand cars, the age and condition of the car play a pivotal role in getting a car loan. If the car is in mint condition and is below 4 years old, the bank will be able to recover a good amount in case of defaulting on the loan. When you make your loan more favourable to the bank, you can bargain to make the loan more favourable to yourself as well. In case the car's value depreciates fast or the used car isn’t too good, the banks may impose a higher interest rate.
CIBIL stands for the Credit Information Bureau of India Limited. This bureau maintains a record of the history of all credit customers. When you take a credit card or a loan, your record starts. Banks report to CIBIL about your behaviour, whether you pay on time or you default on payments. It also keeps track of your spending patterns and your credit usage. So, a CIBIL score depicts an overall picture of your credibility. Sometimes your score can be affected by factors you had no idea about. With a high score, banks will have faith in you as a customer and will be happy to sanction your loan. If you have a bad score, this means you are a risk in terms of repaying the loan. Banks may simply reject you. But if they decide to take the risk and approve of your loan, they may impose stricter terms on your loan along with higher interest rates.