The interest rates on the car loan offered by Punjab and Sind Bank are calculated on the base rate plus the bank’s rate. The following table depicts the Punjab and Sind Bank Car Loan Interest Rates 20 Jun 2019.
|Type of vehicle||Breakdown||Effective rate of interest|
|New Vehicles||BR (10.00%)+ 0.25%||10.25% p.a.|
|Old Vehicles||BR (10.00%)+ 3.00%||13.00% p.a.|
The Punjab and Sind Bank has attractive terms on their car loan. The following table shows the requirements of the vehicle loan.
|Processing fee||0.25% of the loan amount. A minimum of Rs. 1,000 and a maximum of Rs. 10,000 will be charged.|
|Prepayment penalty||Nil. 1% of the outstanding balance is charged in case of loan take over.|
|Documentation fees||Stamp and Revenue charges only.|
|Minimum income requirements||Rs. 1,20,000 p.a.|
|Maximum loan amount||No ceiling for individuals. Businesses can get loan amount up to five times the annual cash accruals depending on the repayment period chosen.|
|Minimum age of the borrower||18 years|
|Maximum age of the borrower||65 years|
|Maximum age upon loan maturity||Non pension service class - Up to 60 years. Pension class and others - Up to 70 years.|
|Margin for new cars||10% of the on-road price (excluding accessories and insurance)|
|Margin for used cars||25% of the cost of the vehicle|
|Maximum age of used car||5 years|
|Maximum loan tenure for new cars||84 months|
|Maximum loan tenure for used cars||60 months (Repayment period + the age of the car should not exceed more than 84 months)|
Punjab and Sind Bank helps you realize the dream of owning a car! Individuals and businesses can avail of car loans to secure the car of their choice. Customers opt for a new car or a pre-owned car. Get attractive rates of interest on your loan as well as easy repayment tenures. For individuals, there is no ceiling limit on the maximum loan amount you can avail. Added to that, there is no limit to the number of vehicles an individual can purchase as well. In case you wish to prepay the loan, you can do this at absolutely no penalty fees. If you decide to transfer the balance of your loan to another bank, then 1% of the outstanding balance will be charged.
To calculate the interest payable on your loan, you can use the calculators available online. BankBazaar.com has a Car Loan EMI calculator which will help you determine the financial cost of your loan. To use the calculator, follow these simple steps:
If you want to manually calculate the interest on your Punjab and Sind Bank car loan, you can use this formula:
(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]
The formula translates to: E = P*r*[(1+r)^n/(1+r)^n-1)]
E = EMI
P = Principal loan amount
R = Rate of interest per month
N = Number of years
For example, if you take a Punjab and Sind Car Loan sanctioned in October 2017, for Rs. 4 lakhs at 10.25% for a tenure of 3 years, your EMI will be = [400000 *0.854% [(1+0.854%)^4/(1+0.854%)^4-1)]
According to the calculator:
An amortization schedule will give you a clear picture of your entire loan month by month. The breakdown between principal and interest in each EMI will be depicted clearly. The following amortization schedule is an example of the yearly breakdown on a Punjab and Sind Car loan. The principal amount is assumed to be Rs. 4 lakhs, interest 10.25%, processing fees at 0.25% and the tenure is for 3 years.
|Year||Principal Paid||Interest Paid||Total Payment||Outstanding loan balance|
|2015||Rs. 28,857||Rs. 10,005||Rs. 38,862||Rs. 3,71,143|
|2016||Rs. 1,23,081||Rs.32,367||Rs. 1,55,448||Rs. 2,48,063|
|2017||Rs. 1,36,307||Rs. 19,141||Rs. 1,55,448||Rs. 1,11,758|
|2018||Rs. 1,11,758||Rs. 4826||Rs. 1,16,584||Rs. 0|
Credit Score - When you apply for any loan from a bank, your CIBIL score plays an important role in determining whether or not your loan will be sanctioned. CIBIL scores keep a track of your credit history. If you default on EMIs and loan payments, banks report it to CIBIL. If you maintain a good track record, that is reported as well. So a low score will mean that you are not a good potential customer. Your credibility will be tainted. If banks lend you money, they may do so carefully by increasing the interest rate and other terms and conditions of your loan.
Income - Income earned factors into your eligibility for a car loan. Punjab and Sind Bank has not mentioned an income criteria for a car loan but you generally need to be earning a minimum amount for your loan to be approved. You can add the income of your spouse, major son or parents to the loan to increase your eligibility. When you show more income, the terms and interest rates of your loan will be more favourable.
Down Payment - A large down payment makes the loan quantum reduce significantly. Banks have less to recover from you over the course of your loan tenure. This also means that in the event you cannot pay back the loan, the amount to recover will be much smaller. The total interest you pay on your loan will also be lesser. On the other hand, a small down payment leaves a large principal amount left for interest to be charged. The total interest payable will be higher. Smaller down payments make the loans riskier for banks, too, and this could result in banks lending at higher interest rates.
Loan Tenure - The longer the loan tenure, the more interest you will pay. There’s a longer period of interest chargeable on your loan and therefore, the total interest payable is much more. When you take a loan for a shorter period, your EMI amount will increase, but the interest decreases overall. Shorter terms are favourable to banks because there’s lesser time for market fluctuations and negative events to happen that might hamper your repayment of the loan.
Car model - Some car models depreciate faster than others. When customers cannot pay the loan back, banks will need to recover the loan money by selling the vehicle. So a model which doesn’t depreciate as fast will fetch you a better loan. The banks are assured they can recover a significant amount if they sell the car.
Age of the vehicle - When it comes to used cars, the age and condition of the car plays an important role. A used car which can be sold for a good price will work in your favour when it comes to determining your loan quantum, interest rates and other terms and conditions.
The Credit Information Bureau of India Limited keeps a track of everyone’s credit history. Banks report your credit behaviour to CIBIL. Your credit score comes in handy for both you and the bank when it comes to future loans and credit cards. When you apply for a Punjab and Sind Bank Car Loan, the bank will make an enquiry into your score. A high score will work positively. A low score could mean that you have previously defaulted on payments, spent over your credit limit or not maintained a good credit history. Banks will be reluctant to approve a loan for you. A low score may result in banks increasing their interest rate for you as you are a risky customer for them.
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