Initially known as the Nadar Bank, Tamilnad Mercantile Bank (TMB) was incorporated in 1921 in Tuticorin, Tamil Nadu, India. It was renamed as Tamilnad Mercantile Bank in 1962 and has its headquarters in Tuticorin. It currently has over 400 branches across India and focuses primarily on rural development.
The Bank has a wide portfolio of financial products and services, including various term deposits and loans. Home loans, Auto loans for two wheelers and four wheelers, personal loans, education loans, etc. are provided to customers at attractive rates of interest. Car loans offered by TMB can be availed in order to purchase new or used cars for both personal and professional use. Quick processing, higher loan quantum, simple documentation, lower interest rates make the TMB car loan scheme a highly sought after product.
Tamilnad Mercantile Bank offers attractive interest rate on its car loan scheme with highly flexible repayment option. This can be availed by individuals and legal entities like Corporations, Trusts, Partnership Firms and Hindu Undivided Families (HUF). The loan quantum offered by the bank is really high - it is up to Rs. 150 lakhs for purchase of new cars. Interest applicable on the loan is dependent on the loan tenure chosen by the borrower.
|Interest Rate (Annual)||
|Maximum Loan Amount||Maximum loan amount offered to a borrower is Rs. 150 lakhs for purchase of a new car.|
|Minimum & Maximum Car Loan Tenure||Minimum Tenure - 12 months Maximum Tenure - 60 Months ( 5 years)|
|Processing Fees/Charge||1% of the sanctioned loan amount.|
|EMI per Lakh||Rs. 2,207-* (for a 5 year loan tenure at 11.65 % interest)|
* Estimated Value
One of the best features of availing a car loan is that you can repay the amount in easy installments to the bank. An Equated Monthly Installment (EMI) is the sum of the principal and the interest that has to be paid by the borrower on a monthly basis once the loan has been availed by him/her. This is also affected by the repayment tenure chosen by the borrower. After a specific period in the loan tenure, there will be a reduction in the amount of interest paid out by the borrower, and only the principal amount will be part of the monthly EMI. There is a basic formula used for this calculation, which is as follows:
EMI (E) = [P x r x (1+r) ^n]/ [(1+r) ^n-1]
P = The loan amount/ Principal
R = The rate of interest charged on the loan amount, per month. In order to get the monthly rate of interest, the formula used on the annual interest rate is 11.65/ (12 x 100). Tamilnad Mercantile Bank offers an interest rate depending on the loan tenure chosen by the borrower.
n = Number of monthly installments i.e. the number of years opted for the repayment of loan.
For example: If you take a car loan for Rs. 5,00,000 at an interest rate of 11.65% with a loan tenure of 5 years, the projection of EMI and interest payable would be as follows - EMI payable per month would be Rs.11,034/-, total interest that has to be paid will be Rs.1,62,040/-, and the total payment that you will have to make at the end of the loan tenure would be Rs.6,62,040.
In the following example, you will get a clear idea of break-up of EMI on a loan amount of Rs. 15 lakhs for a loan term of 3 years at an interest rate of 11.65%. EMI per month is calculated from Oct 2016 to Sept 2018.
|EMI||Principal||Interest Amount||Total EMI Payment (Principal + Interest)||Balance Due|
|Oct 2016||Rs. 35,009||Rs. 14,562||Rs. 49,571||Rs. 14,64,991|
|Nov 2016||Rs. 35,348||Rs. 14,223||Rs. 49,571||Rs. 14,29,643|
|Dec 2016||Rs. 35,692||Rs. 13,879||Rs. 49,571||Rs. 13,93,951|
The following projection shows the total yearly EMI and repayment schedule for the loan term of 3 years, beginning from October 2015:
|Year||Principal||Interest Amount||Total EMI Payment||Balance Due|
|2015||Rs. 1,06,049||Rs. 42,665||Rs. 1,48,713||Rs. 13,93,951|
|2016||Rs. 4,56,313||Rs. 1,38,540||Rs. 5,94,853||Rs. 9,37,638|
|2017||Rs. 5,12,406||Rs. 82,447||Rs. 5,94,853||Rs. 4,25,232|
|2018||Rs. 4,25,232||Rs. 20,907||Rs. 4,46,140||Rs. 0|
In this scenario, loan EMI per month would be around Rs. 49,571 and the Total Interest Payable would be Rs. 2,84,559. Therefore, the total payment that you will have to make by the end of the loan tenure is Rs. 17,84,559.
Tamilnad Mercantile Bank thoroughly scrutinizes the debt-to-income ratio of an applicant, his/her credit history, etc. in order to arrive at a decision regarding sanction of a car loan. CIBIL Score is the primary component in this initial verification process and it determines whether an applicant gets a car loan approved at an affordable rate of interest. CIBIL Score represents the credit history of the applicant and shows his/her credit dues, repayment trends, defaulted payments if any, income earned, etc. This is used to better understand a customer’s repayment capacity, spending patterns, creditworthiness and so on in order to process the application further. If the applicant has a poor credit rating, then the bank will either reject the loan or offer the car loan at higher rate of interest. An applicant should review his/her credit history and make remedies for any outstanding credit so as to improve your CIBIL score and get a favorable loan decision and interest rate from the Bank.