Headquartered in Thrissur in Kerala, South Indian Bank is a private sector bank that was established in 1929 and has presence in more than 26 states in the country with over 800 branches. Among banks in the private sector, this has the third largest network of branches. Simple and affordable interest rates, minimal fees, no-fuss application process, this is what a South Indian Bank car loan entails. Combining the best of all that and offered in terms of easy car loans, the South Indian Bank car loan interest rates for 2017 is made for everyone looking to own their dream set of wheels. Cars for personal use, official purposes, agrarian purposes, South Indian Bank loan offers car loans at enviable interest rates that are tailor made for each individual and can be availed based on the applicant’s income and age among other factors.
South Indian Bank offers car loans at competitive rates of interest with a base rate of 10.20% plus an addition of 0.30% to 0.80% based on the applicant’s profession and the type of vehicle that is required. Loan tenures are also flexible with a maximum of 5 years and in case a 100% collateral is provided, 7 years is the maximum tenure offered.
|Interest Rate||Base Rate of 10.20% + 0.30%-0.80%|
|Loan Amount||For 4 wheelers, a minimum of Rs. 2,00,000 is offered.|
|Loan Tenure||Maximum of 5 years and with 100% collateral security, tenure is increased to 7 years.|
|Base rate (As of Dec 2016)||10.20%|
|Margin||For new vehicles - 5%-15% and for second hand vehicles - 25%|
|Cost of vehicle||Along with Basic Cost, the cost of accessories, tax and duties, one time tax, Octroi and the comprehensive insurance premium for the first year|
|Upfront Charges||Either Rs. 5000 or 0.25% of the amount procured as the loan, whichever is the lesser amount|
Customers who borrow loans for the purpose of purchasing cars from South Indian Bank can repay the loan through EMIs or Equated Monthly Installments. EMI is simply the amount that the customer needs to pay every month to the bank and consists of the interest amount along with the principal amount. This is an easier way for the customer to repay the loan as compared to paying the amount borrowed in its entirety which is something that most cannot afford to. Interest rate charged by the bank is based on a number of factors such as the repayment tenure and so on. The EMI amount that is to be paid to South Indian Bank is inclusive of the principal amount and the amount of interest. As the loan tenure progresses, the amount of interest decreases while the principal amount increases. A formula used to calculate the EMI amount that is to be paid is as follows -
E = P*r*[(1+r)^n/((1+r)^n-1)]
In the above formula, E represents the Monthly EMI, P is the principal amount, r refers to the interest rate charged per month and n represents the number of years.
For an amount of Rs. 1,00,000 at an interest rate of 10.30% with a loan tenure of 1 year, the total amount that is to be repaid is tentatively Rs. 1,04,767 with Rs. 8731 being the EMI amount.
For example, the below table provides the amortization table for a car loan of Rs. 6,00,000 for a period of 3 years at an interest rate of 10.30% from South Indian Bank.
|Year||Total Payment||Balance||Principal amount||Interest amount|
|2015||Rs. 57,838||Rs. 5,52,008||Rs. 47,992||Rs. 9,846|
|2016||Rs. 2,31,353||Rs. 3,69,033||Rs. 1,82,975||Rs. 48,379|
|2017||Rs. 2,31,353||Rs. 1,66,297||Rs. 2,02,737||Rs. 28,617|
|2018||Rs. 1,73,515||0||Rs. 1,66,297||Rs. 7,218|
The amount of principal that is paid increases with the tenure and the interest rate reduces until the loan is completely repaid.
There are many factors that decide the interest rate charged by South Indian Bank such as loan tenure, income and so on. This also has an impact on the loan amount that is given by the bank to the applicant and the EMI amount that is to be paid.
Some of these factors are-
CIBIL or Credit Information Bureau India Limited provides, maintains and summarizes the person’s loan payments and credit history and generates a score called the CIBIL TransUnion Score which is a 3 digit number that ranges from 300 to 900. This score is an important factor considered by financial institutions and banks while determining the eligibility and accepting a loan request. The higher the scores, higher are the chances of procuring loans at a reasonable interest rate. This is due to the fact that those with higher CIBIL scores are seen as less risky financially as compared to those with low CIBIL scores and thereby can avail loans easily and at a good rate of interest.
Customers can apply for a South Bank car loan in many ways. The simplest choice would be to visit the South Indian Bank’s website and fill in the form available in the website, or customers can also visit the nearest branch of South Indian Bank and apply for the car loan of their choice directly.
Any one from the five types of collaterals can be provided while availing a car loan from South Indian Bank. These include - the Deposit amount, Gold, LIC, Property or NSC.
The minimum loan amount that can be procured through the South Indian Bank car loan varies, depending on whether it is a two wheeler or a four wheeler. For a two wheeler, a minimum of Rs. 50,000 can be availed whereas for a four wheeler, Rs. 2,00,000 is the minimum amount that can be availed.
South Indian Bank provides loans for most types of vehicles either for personal use or for official purposes and also for vehicles that are used for agrarian purposes.
Based on the target customers in terms of their age and income, there are different types of loans available. These include -
~ Mobi Loans for Salaried Class - This includes those employed with IT companies, MNCs, Central/State Government
~ Mobi Loans for Business Class - This is for those who are self employed and have their own businesses
~ Mobi Loans for Next Generation - This includes those professionals who have a monthly net income amounting to Rs. 60000.
~ Mobi Loans for NRIs - These loans are provided to individuals who are NRIs or jointly with NRI or resident spouse.
~ Mobi Loans for Agriculturalists - These loans are for those whose primary source of income is through agriculture
~ Mobi Loans for Pensioners and Senior Citizens - This loan is for HNIs who don’t receive pension and pensioners.