Union Bank Car Loan - Features & Application Process

Note: The interest rates are effective from 8 October 2026.

Union Bank of India links its vehicle loan interest rates to its External Benchmark Lending Rate (EBLR), which stands at 8.25% p.a. (the RBI repo rate of 5.50% plus a spread of 2.75%). Your rate depends on your credit score: for a new four-wheeler, Union Vehicle rates range from 7.85% p.a. for scores of 825 and above to 10.25% p.a. for scores below 650, while Union Green Miles rates range from 7.75% p.a. to 10.15% p.a. For a used four-wheeler not older than three years, the rate is 11.85% p.a. for scores of 700 and above and 11.95% p.a. for scores below 700.  

Union Bank of India Car Loan Benefits and Features 

The main benefits and features of the car loan offered by Union Bank of India are mentioned below: 

• Lowest Interest Rates: Competitive rates from 7.75% p.a. for eco-friendly vehicles. 

• Quick Approval: Instant in-principle approval within minutes. 

• Minimal Documentation: Simplified paperwork compared to competitors. 

• Flexible Tenure: Repayment periods up to 7 years for new vehicles. 

• Zero Prepayment Penalty: Repay early without additional charges. 

• Online Application: Complete process from home. 

• Wide Coverage: Pan-India scheme with multiple branches. 

• Green Financing: Specialised Union Green Miles for electric vehicles.

• Pre-owned Vehicle Financing: Support for vehicles up to 3 years old. 

• Professional Support: Toll-free helpline 1800-2333 for assistance. 

Car Loan Schemes Provided by Union Bank of India

Union Vehicle Loan 

• Available for new cars with no maximum loan limit. 

• Pre-owned cars (not older than 3 years): Maximum Rs.20 lakh. 

• Repayment tenure up to 7 years (84 months) for new vehicles. 

• Repayment tenure up to 5 years (60 months) for pre-owned vehicles. 

• Competitive interest rates from 7.85% p.a. onwards. 

• Instant in-principle approval available. 

• Processing fee up to Rs.1,000 plus GST. 

Union Green Miles 

• Available for new electric four-wheelers with no maximum loan limit 

• Amongst the most competitive rates: Starting from 7.75% p.a.

• Tenure up to 7 years (84 months) 

• No upper limit on loan amount 

• Lower running costs due to reduced fuel consumption 

• Zero emissions supporting environmental responsibility 

• Minimal paperwork and quick approval 

• Pan India scheme availability 

How to Use the Union Bank Car Loan EMI Calculator?

• Your car loan EMI (Equated Monthly Instalment) depends on multiple factors, including the loan amount, interest rate, loan tenure, and processing fee.

• To calculate your monthly instalment amount, you can use BankBazaar Union Bank of India Car Loan EMI Calculator. 

• The entire computation process is simple and hassle-free with a quick turnaround time.   

How to Apply for Union Bank of India Car Loan?

• Check Eligibility: Visit Union Bank's website and use the car loan eligibility calculator. Provide basic information including age, income, employment status, and required loan amount. 

• Gather Required Documents: Compile all necessary documents as per your employment type and individual circumstances. 

Apply Online: 

• Visit the official website of Union Bank of India. 

• Click ‘Apply Now’ or ‘Online Application’. 

• Select ‘New User’ or ‘Existing User’. 

• Fill in personal and loan details 

• Upload supporting documents 

• Submit the application 

If you apply through Union Bank's digital platform, you provide your personal, employment, financial and vehicle details, download your sanction letter and avail the loan when your vehicle is ready for delivery. The digital platform is meant for new four-wheeler loans to individuals, and NRIs cannot apply through it. 

• Instant In-Principle Approval: Receive instant approval (subject to verification) indicating your eligible loan amount and rate. 

• Document Verification: Bank representatives will contact you to verify submitted documents and conduct income verification. 

• Final Approval and Sanction: Upon successful verification, you'll receive formal sanction letter with final loan terms. 

• Vehicle Purchase and Disbursement: Select your vehicle and provide purchase invoice. The loan is sanctioned within 2 business days of submitting the requisite documents, and the amount is then disbursed to the dealer.

• Registration and Insurance: Complete vehicle registration, obtain comprehensive insurance, and activate your loan account. 

Alternative Application Methods 

Bank Branch 

• Visit your nearest Union Bank branch 

• Collect application form from the loan desk 

• Complete form with accurate information 

• Submit form with supporting documents and processing fee cheque 

• Follow the same verification and approval process 

Phone 

Contact Union Bank's vehicle loan helpline: 1800-2333 for guidance and application assistance.

Factors Affecting Union Bank of India Car Loan Interest Rates

Some of the factors that affect Union Bank of India car loan interest rates are mentioned below:

• Credit Score (CIBIL Score): Your credit history significantly impacts the interest rate you receive. A higher CIBIL score demonstrates responsible financial management and typically results in lower interest rates. Scores above 750 generally qualify for the most competitive rates. 

• Loan-to-Value Ratio (LTV): The down payment you contribute affects your loan amount and interest rate. A larger down payment (30-40%) reduces the bank's risk and often results in preferential rates. For instance, a 40% down payment typically secures better rates than a 10% down payment. 

• Tenure of the Loan: Shorter loan tenures (36-48 months) often attract lower interest rates compared to longer periods. However, they result in higher monthly instalments. Conversely, extended tenures offer lower EMIs but higher total interest outgo. 

• Income-to-Debt Ratio: Banks assess your existing financial obligations against your income. A lower debt-to-income ratio indicates better repayment capacity, resulting in competitive rates. Ideally, your total monthly obligations should not exceed 50% of gross monthly income. 

• Employment Stability: Salaried individuals with stable employment in reputable organisations typically receive better rates than self-employed borrowers. Government employees and those in recognised sectors may qualify for preferential rates. 

• Vehicle Type and Value: Premium and luxury vehicles may attract marginally different rates. New vehicles typically have lower rates than pre-owned vehicles due to depreciation risk.

Your own contribution (margin) is the on-road cost of the vehicle minus the loan amount. The on-road price includes the ex-showroom price, RTO registration, insurance and basic accessory costs. 

Union Bank Car Loan Document Checklist

Identity & Address Verification: 

• PAN card (mandatory) 

• Voter's ID, Passport, or Aadhaar card (for identity) 

• Driving licence, Passport, or Aadhaar (for address proof) 

• Two latest passport-size photographs (colour) 
• KYC documents of the co-applicant/guarantor (if any) 

Vehicle-Related Documents: 

• Proforma invoice from authorised vehicle dealer 

• Receipt of advance/booking amount payment 

• Vehicle specifications and pricing details 

Financial Documents: 

• Bank statements for the last 6 months (from primary bank account) 

• Proof of other income sources (if applicable) 

Additional Documents for Salaried Individuals 

Salaried Individuals 

• Last 2 years' Income Tax Returns (ITRs) – Essential for income verification 

• Form 16 (latest financial year) – Issued by employer 

• Latest 3 salary slips – Preferably from the last 3 consecutive months 

• Letter from employer – Confirming designation, salary, and employment duration 

• Proof of other income (if not reflected in ITRs/Form 16) – Rental income, investment returns, etc. 

Self-Employed Individuals 

• Last 2 years' Income Tax Returns (ITRs) – Mandatory for income proof 

• Last 2 years' Profit & Loss statement – From your business accounts 

• Last 2 years' Balance sheet – Showing business financial position 

• Business registration documents – GST certificate, business licence, partnership deed (if applicable) 

• Latest 6 months' business bank statements – Demonstrating cash flow 

Special Situations 

NRI Applicants 

• Employment contract or offer letter (translated to English if in another language) 

• Current work permit or visa 

• Passport copy 

• Local address proof (if applicable) 

• Visa stamp on passport 

• Current employer's identity card 

• Attested Power of Attorney from Indian Embassy (if required) 

For Loan Takeover from Another Bank 

• Sanction letter from previous lender 

• 12 months' account statement from previous bank 

• Loan closure certificate (if already repaid) 

• No-due certificate from previous lender 

For Pre-Owned Vehicle Purchase 

• Previous registration certificate (RC) of the vehicle 

• Previous insurance policy 

• Valuation report from recognised automobile engineer 

• Pollution Under Control (PUC) certificate 

Summary 

Union Bank Car Loan finances new cars, used cars up to three years old and electric vehicles through the Union Vehicle Loan and Union Green Miles schemes, with rates starting from 7.75% p.a. It offers instant in-principle approval, minimal documentation, no prepayment penalty and an online application. Check your eligibility, keep your documents ready and apply online or at your nearest Union Bank branch. 

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