Oriental Bank of Commerce Two wheeler Loan:
Oriental Bank of Commerce is a renowned public sector bank in India that is based out of Lahore, which was then a part of British India and now Pakistan. Having overcome a lot of ups and downs in its course, it became a nationalized bank on April 15th, 1980. In the late 90s, it acquired two banks namely Punjab Cooperative Bank and Bari Doab Bank, but this acquisition did not lead to any new bank branches. Global Trust Bank was once a leading private bank in India but became associated with many financial discrepancies that led to a moratorium that was imposed on the bank by the RBI. The bank then amalgamated with OBC. This acquisition increased the total number of branches for OBC by 103, crossing the 1000 mark. It is today, one of the largest public sector banks in India.
The necessity for a Two Wheeler Loan Today:
With the changing times, the needs of people have also seen making a sharp turn. In this day and age, many people strive to become independent in any which way possible however small or big it may be such as making your own food, buying your own home etc. People want to travel at their own time and according to their own needs and not the schedule of any bus, van or asking for a lift from a different person everyday going their way. But today’s generation at the same time is also highly impatient. They don’t want to wait more than a few seconds to fulfill their immediate requirements. The traffic in this country however speaks a different story altogether. Waiting at long signals, getting stuck at traffic jams doesn’t really help with increasing patience, but rather pulls on the irritability cord in people. Hence, as means of tackling this problem, many commuters today prefer a two wheeler over a four wheeler because they can get to their destinations much faster as they are more compact and can move faster in traffic situations and great when taking shortcuts through “gullies”. But the problem is, even though they are cheaper than four wheelers, not everyone can afford it. Many banks and other financial institutions have now recognized the increasing trend of two wheeler preference and are more than ready to help. Two wheeler are no longer luxurious, but a necessity and having recognized this need, almost all private as well as public sector banks today offer two wheeler loans.
Oriental Bank of Commerce Features and Benefits:
Purpose – The Vehicle Loan can be used for the purchase of a new two wheeler for non-commercial use. The vehicle must be registered as a private vehicle.
Income Criteria – The gross monthly income must be a minimum of Rs. 10, 000
Maximum Loan Amount – The maximum amount that will be provided for the purchase of the two wheeler is Rs. 10, 00, 000
Security – The hypothecation of the new two wheeler. This hypothecation charge will be registered in the RTO books.
Collateral Security – If the gross monthly income of the individual is less than Rs. 30, 000, in that case, 1 personal guarantee that is acceptable to the bank must be provided as collateral security.
Components of Finance – This will include the showroom price, the onetime road tax, the registration cost and the 1st year’s insurance cost.
Loan Repayment Tenure:
OBC bank offers flexible loan repayment tenures of up to 84 months. This ensures that your monthly expenses do not increase significantly and you can continue living your established standard of life.
- The 84 EMIs or Equated Monthly Installments will include the Principal Amount + Interest Rate amount
- For Salaried Employees who are Non-Pensionable – Up to Superannuation OR up to the age of 60, depends on whichever is earlier.
- For Salaried Employees who are Pensioned – Up to 65 years of age, provided they have a regular source of income.
- For Business Entities – There is no age bar.
Margin – 15% on the on road cost.
Eligibility Criteria for Oriental Bank of Commerce Vehicle Loan:
- For salaried employees/ individuals – must have a minimum of 1 year of service or experience. The current as well as the previous employment service can be combined and can be taken into consideration to meet the criterion on 1 year service.
- Professionals – even doctors are eligible to apply
- Business Entities – the entity must be an established business for a minimum of 2 years.
- Agriculturist – the eligibility criterion will be determined on the basis of their landholding and their repaying capacity.
- Non-Resident Indians (NRIs) – Can only apply jointly with a Resident Indian (such as a close relative)
- Co-Applicants – The following members can be co-applicants for the Vehicle Loan
- Unmarried daughter
Assessment for the Eligibility of Loan Amount:
For Salaried Employees/Professions and Pensioners:
The maximum loan amount that will be provided will be equivalent to 30 months of the gross salary or the pension, provided the net take income falls within the 30% - 40% Gross Annual Income slab.
The net take income is calculated by subtracting the gross Annual Income with all other deductions, Income Tax deduction and the proposed loan installment.
|Monthly Income||Loan Amount Percentage|
|Up to Rs. 50, 000 per month||40%|
|Above Rs. 50, 000 per month||30%|
For Business Entities:
Cash generations to satisfy the proposed loan repayment.
The income of the co-applicant will be taken into consideration for the eligibility, Net take home and MPBF.
Check Points for the Loan:
- DL or Driver’s License
- The authenticity of the invoice issued by dealer
- The repayment capacity
Documentation Required for Oriental Bank of Commerce:
- Salaried Employee – Income Tax Return OR Salary certificate issued by the respective employer
- Agriculturist – A record showing the landholding and the cropping pattern OR any other income proof
- Other Categories – The latest 3 years of IT Return and computation sheet / Bank Account Statement
- The quotation issued by the authorized dealer from whom the two wheeler will be purchased.
- Income Proof of the spouse (if applicable) to determine the loan amount.
Note: Additional documents can be requested if necessary as per the requirement which differs on case to case basis.
OBC Vehicle Loan Interest Rate:
Oriental Bank of Commerce follows the floating interest rate structure
|Loan Tenure||Interest Rate Structure|
|Up to 36 Months||Base Rate + 0.50% = 10.20%|
|Up to 84 Months||Base Rate + 0.75% = 10.45%|
|Up to 60 Months||Base Rate + 3% = 12.70%|
Note: A concession of 0.25% in interest rate will be provided to captive and loyal customers, group of employees and existing home loan borrowers
OBC Bike Loan Fees and Charges:
|Processing Fee||Nil ( Up to December 31, 2015)|
|Up – front Charge||Nil|
Comparing Two Wheeler Loans from Different Banks:
While you are spoilt for choice when deciding whom you would like to take the loan from to fund your new two wheeler, OBC deserves your attention and here is why –
- Firstly, this loan does not restrict you with the choice of a vehicle. You can choose any new two wheeler of your choice and use the Vehicle Loan from OBC to fund it.
- Secondly, this bank caters to even those sections of the masses that are generally ignored by most other banks, for example, agriculturists and pensioners. Also, no unrealistic demands are imposed on these sections to make the repayments, their assessment is made with parameters that are applicable to their profession and not generalized, for example their land holding is taken into consideration for giving a vehicle loan to an agriculturist and the pension amount per month to determine the loan amount for pensioners.
- If the above does not apply to you, take into consideration the additional fees and charges that will be incurred by you. Most other banks charge additional charges for documentation, prepayment penalty etc. however, OBC does not charge a fee for any such purposes. This will add to your savings significantly.
- If you take into account the loan tenure for the repayment, OBC offers one of the longest tenures for repayment that can go up to 84 months. This will decrease your monthly installment amount to a great extent and not hamper your established lifestyle. Also, the interest rates that are offered at these different loan tenures are also very low in comparison to other banks.
- If you want a two wheeler loan in addition to a home loan, if you apply for both at OBC, you are guaranteed to get a low rate of interest.
- Even the number of documents required for the application of this loan is way lower and therefore more hassle free in comparison to other banks.
Therefore, when you compare the different facets of the OBC Vehicle Loan with loans offered by other banks, even if this bank is lesser known in comparison, the package offered is very attractive in terms of your monthly expenses and your savings.
Oriental Bank of Commerce Two Wheeler Loan FAQs:
- Can I avail the OBC Vehicle Loan for the purchase of a second hand two wheeler?
No. The OBC Vehicle Loan is only applicable for the purchase of a new two wheeler and cannot be used for any second hand two wheeler models.
- What is the maximum loan amount that can be availed under the OBC Vehicle Loan?
A maximum amount of Rs. 10, 00, 000 will be provided under the OBC Vehicle Loan. However, the bank determines your loan amount eligibility on the basis of different factors. Even if the maximum loan amount is Rs. 10, 00, 000, you may or may not be eligible for this full amount.
- Do I need to put down a collateral security for the OBC Vehicle Loan?
If your gross monthly income is lesser than Rs. 30, 000, you will be asked to put down one personal guarantee that is acceptable to the bank as collateral security. However, a collateral security is not required if your monthly income is more than Rs. 30, 000.
- I am an NRI. Can I avail the OBC Vehicle Loan as a sole individual?
No. OBC offers the Vehicle Loan to NRIs only jointly with Resident Indians, preferably a close relative. Individual Vehicle Loans are not offered to NRIs.
- Is there any circumstance under which I can avail a concession on the interest rate structure offered on the OBC Vehicle Loan?
OBC bank offers a concession of 0.25% on the interest rate on Vehicle Loans to group of employees, captive and loyal customers and existing home loan borrowers.