Headquartered in Delhi, Punjab National Bank is an Indian financial services company that has presence in 700 cities catering to more than 800 million people across the country. As one of the Big Four banks in India, Punjab National Bank is third in terms of size of assets within the country. It was registered in 1894 with its first office in Lahore and was founded by Lala Lajpat Rai.
Punjab National Bank offers car loans that are quick and easy to avail with low interest rates. This loan is applicable for a variety of cars for both individuals and businesses. Customers can own their dream vehicle without undue worries and hassles thanks to the attractive car loan offered by Punjab National Bank.
Interest rate is the primary factor taken into consideration by customers availing a loan and lower the interest rates, then more attractive is the car finance option. Tenure is another important consideration for customers. Punjab National Bank offers car loans at both fixed and floating interest rates and loan repayment tenure of up to 7 years based on certain criteria determined by the bank. Punjab National Bank also has also collaborated with certain dealers and manufactures to ensure customers of the best possible option while purchasing their car. Car financing of a maximum of Rs. 25 lakhs is offered for individuals, and corporates can avail loans based on their requirement.
|Floating Interest Rate|
|Criterion||Tenure||Rate of Interest|
|If individuals or corporates who are looking to avail a car loan has a PNB score above 60 or if case they can provide a 100% collateral security in the form of Mortgage of Immovable Property or liquid security||A maximum of 7 years||B.R + 0.25%|
|Female customers||A maximum of 7 years||B.R + 0.15%|
|Other customers||Below 3 years||B.R + 1.00%|
|3 years and above||B.R + 1.50%|
|Fixed Interest Rate|
|All customers||A maximum of 7 years||B.R + 0.40% and reset clause of 3 years is applicable|
|Documentation charges/Upfront fee/Processing fee||Currently waived until 31 December 2016 due to Festival Bonanza|
Customers can repay their loans through Equated Monthly Installments or EMIs. After purchasing the car through Punjab National Bank Car loan, the loan amount that needs to be paid back can be done monthly through easy installments over a period of time determined by the bank. EMIs consist of both the principal amount borrowed along with the interest amount charged, which is again decided by the bank. With the progress in the loan tenure, the principal amount to be paid increases while the interest amount reduces. Customers can calculate the amount of EMI that they will need to pay every month by using the formula given below -
E = P*r*[(1+r)^n/((1+r)^n-1)]
Where E is the Monthly EMI, P stands for principal amount, r is the rate of interest per month, n refers to the number of years.
For an amount of Rs. 1,00,000 at an interest rate of 10.60% with a loan tenure of 1 year, the EMI calculated on an arrear basis would total up to approximately Rs. 8,820 wherein the total amount to be paid would be Rs. 1,05,834.
For example, the table given below illustrates the amortization table for a car loan of Rs. 9,00,000 for a period of 3 years at an interest rate of 10.60% from Punjab National Bank (starting from August 2015).
|Year||Total Payment||Balance||Principal Portion||Interest Portion|
|2015||Rs. 87,884||Rs. 8,35,399||Rs. 64,601||Rs. 23,283|
|2016||Rs. 3,51,536||Rs. 5,59,255||Rs. 2,76,144||Rs. 75,392|
|2017||Rs. 3,51,536||Rs. 2,52,375||Rs. 3,06,880||Rs. 44,656|
|2018||Rs. 2,63,652||0||Rs. 2,52,375||Rs. 11,277|
The amount of principal that is paid increases with the loan repayment period and the interest rate decreases until the loan is repaid completely.
Interest rates are the primary consideration for customers looking to avail car loans. Lower interest rates are one of the most salient features of any car loan scheme. There are numerous factors that have an impact on the interest rates for a Punjab National Bank car loan. Some of these are listed below.
Every debt, payment, loan repayment and other finance history is stored, summarized and converted to a score known as the CIBIL TransUnion Score. This information is provided by Credit Information Bureau India Limited or CIBIL. This 3 digit number ranging from 300 to 900 is considered as an important determining factor by banks or financial institutions before providing a loan. These institutions provide loans more easily to those who are seen to constitute a lower risk financially. If a customer has a good CIBIL Score, generally above 750, then he/she automatically receives a better loan offer with lower interest rates as banks remain confident of the person’s ability to repay. On the other hand, if a customer has a low score then banks are automatically more wary of providing them with loans as there is a reduced chance of their repaying loans on time with the interest amount. Hence, potential customers are advised to have a good CIBIL score so as to avail loans a lot more easily.
In case customers are purchasing new cars from ICML & Ford Motors Ltd., Hyundai, Honda Siel, Mahindra & Mahindra, Tata Motors or Maruti, then the loan margin is 10%, as Punjab National Bank has a tie up with these companies. However, if customers are purchasing cars from other manufacturers then the loan margin is 15%.
Prepayment charges can be waived if the loan is prepaid by customers from their own sources or if the customer shifts to another bank within a month (30 days) from the date of upward revision in the interest rate or variations in other terms of sanction.
A minimum net monthly income/pension/salary of Rs. 20,000 is necessary.
For a loan repayment tenure of up to 3 years and if the PNB score is 60 or above then an ROI of 10.75% is charged, if not 11.25% is charged.
For a loan repayment tenure of 3 years or more, the ROI charged is 11.75%.
Car that is purchased is to be hypothecated to the bank and a third party guarantee is acceptable by Punjab National Bank.