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

    Lakshmi Vilas Bank Car Loan Interest Rates

    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 10.10%. The following table depicts the Lakshmi Vilas Bank Car Loan interest rates for 2018.

    Type of vehicle Breakdown Effective rate of interest
    New Cars / Vans & Jeeps BR+0.50% 10.10% % 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.

    Particular Charges
    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

    Overview About Lakshmi Vilas Bank Car Loan

    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.

    How to Calculate Interest Rate on my Lakshmi Vilas Bank Car Loan

    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.

    • Visit BankBazaar.com. On the homepage, in the drop down menu on the top righthand corner, click on “Finance Tools”.
    • You will get a drop down of more options. Click on “Car Loan EMI Calculator”.
    • Use the slider to input your details or you can manually enter the amount by clicking on the greyed-out amount given on the right hand side.
    • You need to enter your Principal Loan Amount, Loan tenure, Interest rate, Processing fee, and whether you would like to make prepayments on your loan.
    • When you click on “Calculate”, your results are generated immediately.
    • You can view your loan details such as EMI, the total interest you will pay and the total loan amount you will pay back.
    • Adjust the details to see different loan options on amount, tenure and EMI.

    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 10.10% 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:

    • Your EMI will be Rs. 13,181.
    • You will pay Rs. 74,512 totally in interest.
    • The processing fee of Lakshmi Vilas Bank has not been specified, so assuming it is 1% of the loan amount, your processing charges will be Rs.4000.
    • At the end of your loan, you will repay the bank Rs. 4,78,512.

    Amortization schedule

    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 10.10% 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

    Factors affecting Lakshmi Vilas Bank Car Loan Interest Rates

    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.

    How CIBIL scores affect Lakshmi Vilas Bank Car Loan Interest rates

    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.

    Tips on Lakshmi Vilas Bank Car Loan Interest Rates

    • Lakshmi Vilas Bank Car Loan Interest Rates 2017 is currently at 10.10% p.a.
    • To increase your eligibility, add your spouse’s income to the total income earned.
    • Before you approach a bank for a loan, check your CIBIL score. You can request for this score on the CIBIL website. A fee is charged for the release of the credit information. Knowing your score, will put you in a better position when you approach Lakshmi Vilas Bank for a car loan.
    • When you purchase a secondhand vehicle, ensure it is in good working condition and not more than 4 years old. When you apply for a Lakshmi Vilas secondhand car loan, your loan process will be smoother and easier and will come with attractive norms and interest rates.
    • Your age should not exceed 65 years upon loan maturity. Exceeding the age may take a toll on your interest rate.

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