Union Bank Car Loan

Union Bank of India was established on 11th November 1919 with its headquarters in the city of Bombay now known as Mumbai. The Head Office building of the Bank in Mumbai was inaugurated by Mahatma Gandhi, the Father of the nation in the year 1921. Union Bank has been playing a very proactive role in the economic growth of India and it extends credit for the requirements of different sectors of economy. Industries, exports, trading, agriculture, infrastructure and the individual segments are sectors in which the bank has deployed credit to spur economic growth and to earn from a well diversified portfolio of assets. Now you can fulfill your dreams of owing a vehicle by availing Union Miles. You can avail this special scheme to purchase of new or old (up to 3 years) four-wheeler, and you can also avail this loan to purchase a new two-wheeler. To know more, follow some simple steps given below to get best interest rates.

Union Bank Overview

Union Bank of India is one of the largest Govt. of India owned banks in the country. Established in November 1919, the head office campus in Mumbai was inaugurated by Mahatma Gandhi in 1921. A popular banking brand in India, Union bank operates over 4000 plus branches across the length and breadth of the country supported by over 6,400 ATM’s.

Steady profits in 94 years of its existence is a testimony of UBI’s strong commitment and value system. An enormous customer base of over 49 million is serviced by a commensurate staff of 31,000 bankers across India. Union bank has been instrumental in making significant contribution to the economic and social development by extending banking and credit facilities to the average Indian. The bank has been leveraging technology in finding solutions to automate its network, reduce costs and pass the benefits to its customers.

This BSE listed bank offers a wide range of banking and financial products catering to needs of individuals & business enterprises alike. UBI also has presence in key cities across the globe in various continents. In the personal banking space, UBI offerings are as below.

• Accounts
• Retail Loans
• Online Payments
• Cards
• Insurance Services
• Investment Services

With so many solutions on the menu, a discerning customer can find answers to all his banking needs with Union Bank of India.

About Union Bank Car Loan

Car financing is one of the leading offerings from Union Bank under retail loans. With Union Miles(The car loan brand of Union Bank), your dream of owning a car is steps away. Union Bank car loans offer financing towards purchase of both new and used cars(up to 3 years).

The elementary terms and conditions makes Union Bank Car Loans, one of the most gettable car loan products in the market . Also, zero prepayment penalty and processing fees clauses make it pocket friendly scheme helping you save thousands of rupees in costs.

The documentation is minimal and high on transparency. At Rs.125 lakh, the quantum of financing is one of the highest compared to other bank car loans. If you’re someone aiming at a luxury car, Union Miles can fulfill your dream of owning one. The fixed interest rates, based on monthly reducing balance is one of the lowest in the car loan segment. For new 4-wheelers, the current rate of interest is 1-year MCLR + 0.50% = 8.70% p.a. and for old 4-wheelers (not older than 3 years), the interest rate is 1-year MCLR + 3.50% = 11.70% p.a.

Why choose Union Bank Car Loan?

For its pro consumer policies and terms. With such low interest rates and fast track processing (applications with proper paperwork are approved in just under 2 business days), you can bank on Union miles to own your dream car. Go for it , if you’re looking for a friendly bank and great post sales service.

As detailed earlier, the interest rates are really low. Very few banks are capable of offering such competitive rates in the market. As a customer, you have sufficient bandwidth to repay the car loan. Up to 84 EMI’s(7 years) and and 60 EMI’s(5 years) is the loan repayment period. If you’re someone with a limited monthly budget and dreams of buying a car, Union miles fits the bill.

Union Bank of India has dedicated loan processing centers known as Union Loan Points(ULP’s) across key cities and towns which makes car loans, easily accessible. Customer service call centers operate 24/7 giving you that extra edge in loan servicing when compared to other banks in this category which are open for stipulated hours during the day.

Features of Union Bank Car Loan

Low age qualification

Generally, with most banks, the minimum age of an applicant should atleast be 21. With Union Bank, any Indian citizen above the age of 18 can apply for a car loan under the Union Miles scheme. The applicant should hold a valid drivers license.

High Quantum of loan

Up to Rs.125 lakh loan is covered for new cars and Rs.20 lakh for used cars not more than 3 years old.

Margin of Financing

The margin or your share of the car loan is 15% of the on-road price of the new car and 40% of the used car's valuation cost. Union Miles finances up to 85% of of the ex-showroom price(Vehicle Cost + Registration Charges + Insurance + Road Tax) of the car which implies only 15% burden for the customer. For used cars, the margin is lowered to 40% of the vehicle cost.

Flat rate of interest

The current rate of interest for -

• New 4-wheelers - 1-year MCLR + 0.50% = 8.70% p.a.
• Old 4-wheelers (not older than 3 years) - 1-year MCLR + 3.50% = 11.70% p.a.

Decent repayment period

With a repayment period of up to 7 years for new cars and 5 years for used ones, you get ample time to repay the loan is easy EMI’s. If you’re under limited financial resources, picking a longer repayment period helps maintain household budget.

Zero prepayment and processing fee

At present, Union Bank does not charge a processing fee towards handling your application and paperwork. This is a limited scheme offer valid for a certain period. Plus, no prepayment penalty is levied by the bank on outstanding balance if you decide to pre close the account. With such luring terms, you will save money.Processing fee on Union Miles has been waived till 31 March 2018.

Car loan security

: Hypothecation of vehicle purchased out of Union Bank's finance and the Bank's lien to be noted with the Road Transport authorities.

Car loan guarantee

For Union Bank car loans, guarantee of the spouse is required. If you are unmarried, a third-party guarantee with sufficient income. For NRIs, guarantee of 1 or 2 local resident Indians with sufficient income is required. For companies, guarantee of 1 promoter or director is required.

Union Bank Car Loan Interest Rates

As per RBI guidelines, the bank has mandated MCLR (Marginal Cost Based Lending Rate) to determine the effective rate for car loans. The table below provides further details.

Union Bank Marginal Cost Based Lending Rate (MCLR) for New Borrowers

Note: The interest rate is subject to periodic revision as per bank’s credit policy and RBI’s quarterly reviews. Make sure to confirm with the bank on prevailing rates at the time of applying and choose the terms accordingly. The above mentioned interest rates are subject to change as per the revised GST rates.

Special retail lending scheme for the employees of Bharat Sanchar Nigam Limited, BSNL, valid from 1 January 2018 to 31 December 2018.

• New 4-wheelers - 1-year MCLR + 0.10% = 8.30% p.a. (up to 3 years) and 1-year MCLR + 0.35% = 8.55% p.a. (for 3 to 5 years)
• Old 4-wheelers - 1-year MCLR + 2.60% = 10.80% p.a.

Union Bank Car Loan Eligibility

Union Miles is one of the most customer friendly car loan offerings in the market. Compared to other large public sector banks, the eligibility criteria is simpler with Union bank. They have a process that is streamlined and hassle free for the applicants. To ensure fast track processing of car loan applications, UBI has dedicated loan servicing centers known as Union Loan Points or ULP’s. The applicant must be aged between 18 and 70 years. Indian citizens and NRIs with a valid licence can apply for an auto loan at UBI. The applicant can apply for the loan individually or jointly with his or her parent, spouse, child or sibling as a co-applicant. Even companies and business concerns can apply for an auto loan at the bank for the purchase of new/used vehicles for their employees or directors. To be eligible to get a car loan from Union bank, you need to be

• At least 18 years in age.
• Salaried, self employed individual or Business concern.
• Sound credit score and no default history.
• Able to provide guarantor.(Spouse can be the guarantor in case of married applicants)
• No Minimum income requirement.

In addition to the above, the bank may further scrutinize the car loan application on basis of credit history by retrieving reports from credit bureaus like CIBIL to analyse your repayment capability. Union bank representatives will inform you further during the application process.

How to calculate EMI for Union Bank Car Loans?

Its paramount for a car loan aspirant to do good amount of homework on various facets of availing a car loan. The onus is purely on you to get the best deal on car loan. One of the tools which help in achieving this is an EMI calculator. Union bank car loan EMI calculator helps you compute EMI, provides breakup of interest charges & miscellaneous fees.

In less than 3 steps, you will be able to easily compute your car loan EMI without any hassles.

• Before we begin, you will need the car loan amount, rate of interest and processing fee(%) to calculate the EMI.
• Use the sliders to navigate and freeze the “loan amount” and “tenure”. The summary of your selection is displayed towards the end of sliders.
• In the following fields, provide the interest rate and processing fee percentage and click “Calculate”.

The breakup of EMI and other useful information will now be displayed for reference.

How to apply for Union Bank car loan?

The Union Bank Car Loan application form is available on the bank website for downloading. Submit the duly-filled and signed application form along with the necessary document proofs on the website or at the nearest Union Bank branch. To locate a Union Bank branch near you, use the Branch Locator tool available on the bank website. You can also track your Union Bank car loan application status using the application or reference number. The bank will verify the details furnished by you and process your application. Upon approval, the loan amount will be disbursed to your bank account in a matter of a few hours.

You can visit the nearest special retail lending branches called Union Loan Points (ULPs) to apply for a car loan. To locate a ULP, visit the bank website. Or, you can request for a contact online and the bank will call back. The bank also has a 24/7 Call Centre for assistance.

Union Bank Car Loan EMI Calculator

Car loans are repaid through EMIs over a specified loan tenure. EMI consists of the principal and interest. Calculating EMI can help you find out how much your car loan costs you on a monthly basis. Depending on the results, you can choose an affordable loan amount and a suitable loan tenure. It is wise to create a monthly budget wherein the EMI doesn’t exceed more than 50% of your income. Maintaining a low debt-to-income ratio can ensure that you don’t default on your car loan. Here is the basic formula to calculate your car loan EMI:

E = P x r x (1+r)^n/((1+r)^n -1)) where, EMI is the Equated Monthly Installment, P is the principal loan amount, r is the interest rate per month, and n is the loan tenure in months.

UCO Bank provides a free online car loan EMI calculator on its website for instant and accurate results. The UCO Bank car loan EMI calculator is not only simple and easy to use but also free of charge. You can input varying combinations of the loan amount and loan tenure to get revised results. Enter your proposed car loan details into the tool such as the loan amount, loan tenure, and interest rate. Click on the ‘calculate’ button. You will get a breakdown of the EMI results with the principal, interest, EMI, and the outstanding due after each EMI payment.

Union Bank Car Loan FAQs

What is the eligibility criteria to apply for an Union Bank Car Loan?

An applicant has to meet the following eligibility criteria to apply for an Union Bank Car Loan.

• Indian citizens above the age of 18 years can apply for this car loan.
• The applicant must hold a valid driving license.
• The customer can apply either singly or jointly (with spouse).

What is the maximum quantum of loan that will be offered under Union Bank Car Loan?

The maximum loan quantum that will be offered for the purchase of new four wheeler is Rs.125 lakh. For old four wheelers, Rs.20 lakh is the maximum loan quantum that will be offered.

What types of vehicles can be purchased with an Union Bank Car Loan?

Union Bank Car Loan borrowers can purchase any type of new four wheeler. Also, old four wheelers, not more than 3 years old, can be purchased using the loan.

What is the margin for new four wheelers to be purchased with Union Bank Car Loan?

For new cars, the margin is set at 15% of the on-road price which includes vehicle cost, insurance, road tax and registration charges.

What is the margin or down payment to be done for old cars to be purchased with Union Bank Car Loan?

For old cars to be purchased with Union Bank Car Loan, the margin is set at 50% of vehicle’s cost.

What are the processing charges for Union Bank Car Loan?

Union Bank charges a nominal processing charge of 0.50% of the loan amount, subject to a maximum of Rs.15,000 plus GST. If the applicant or the co-applicant is an SB account holder in silver, gold or platinum category, or has availed any credit facility with the Union Bank, the processing fee is 0.25% of the loan amount, subject to maximum of Rs.7,500 plus GST.

What is the maximum repayment tenure that one can avail for purchasing a new car with Union Bank Car Loan?

For new 4 wheelers to be purchased with Union Bank Car Loan, customers can choose a maximum repayment tenure of 7 years.

I am planning to purchase a second - hand four wheeler with Union Bank Car Loan. What are the tenure options available for the car loan?

For old four wheelers to be purchased with Union Bank Car Loan, borrowers can choose a maximum repayment tenure of 5 years.

What are the current interest rates for Union Bank Car Loans?

The prevailing interest rates for Union Bank Car Loans are:

• New 4-wheelers - 1-year MCLR + 0.50% = 8.70% p.a.
• Old 4-wheelers (not older than 3 years) - 1-year MCLR + 3.50% = 11.70% p.a.

As interest rates are subject to frequent change, do enquire with Union Bank about prevailing rate of interest before applying for a car loan.

What is the nature of interest charged for Union Bank Car Loan?

The interest rate is floating and will be calculated on a monthly reducing basis.

Will I incur any prepayment penalty if I foreclose my Union Bank Car Loan?

The borrower will not incur any prepayment penalty if the loan amount is adjusted by the borrower from his own legitimate verifiable sources.

Will I incur any penalty if my Union Bank Car Loan is taken over by another bank?

Yes, a fee of 2% will be charged on the average balance of the preceding 12 months if the loan is taken over by another financial institution or bank. the same applies if the loan is adjusted by the borrower in lump sum from any third party source except in case of genuine sale.

What is considered as security for Union Bank Car Loan?

• For Union Bank Car Loan, the following is prescribed as security.
• Lien of bank is to be filed with concerned Road Transport Authorities
• Hypothecation of vehicle purchased out of loan

Do I have to present any guarantee for Union Bank Car Loan?

Yes, guarantee of the spouse is required for Union Bank Car Loan. In case the applicant is unmarried, a suitable guarantee from a third party of sufficient means will be required.

How do I procure the application form for Union Bank Car Loan?

You can get the application form for Union Bank Car Loan online at the bank’s web portal. You can also visit the nearest Union Bank branch to get a car loan application form.

What documents concerning the vehicle do I have to provide while applying for Union Bank Car Loan?

The applicant has to produce the valuation report from an approved automobile engineer for an old vehicle and the pro forma or invoice for new cars while applying for an Union Bank Car Loan.

I am a self employed applicant. What income documents do I have to submit?

Business class applicants must submit the profit and loss statement, balance sheet and Income Tax return statements for the last three years as income documents.

What income documents is expected from salaried applicants while applying for an Union Bank Car Loan?

Salaried applicants must submit the following income documents.

• Last 6 months salary slip
• Form 16 or letter from the employer
• Income Tax Returns for last one year

Apart from income documents, what other documents will be required to apply for Union Bank Car Loan?

• Proof of identity - passport, PAN card or employee identity card
• Address Proof - Ration card, telephone bill or electricity bill
• Duly filled application form
• Three passport size photographs

How much time will it take for the approval of Union Bank Car Loan?

It will take 2 days for the car loan to be sanctioned after all required documents are submitted by the applicant.

How do I apply for an Union Bank Car Loan?

Customers can visit any of the Union Bank retail lending branches called Union Loan Points for loan application. Alternatively, the customer can visit the nearest branch or apply online to proceed with the car loan process.

Does Union Bank offer customer service support for car loan borrowers?

Yes, Union Bank car loan customers can get in touch with a customer care executive through the 24/7 call centre to get their queries cleared. Customers can also visit any nearest Union Bank branch to get support for anything related to the car loan process.

What are the stages involved in an Union Bank Car Loan?

There are three main stages involved in an Union Bank Car Loan.

• Application - submission of application with all necessary documents
• Sanction - approval for a specific loan amount
• Disbursement - distribution of loan amount

How is the loan quantum decided?

For Union Bank Car Loans, the quantum is calculated based on the applicant’s repayment capacities and the value of property.

Should I have an account with Union Bank for availing a car loan?

Although having an account with Union Bank is not necessary for availing a car loan, it is recommended so that the customer can benefit from other value added service that come with an Union Bank account.

How can I repay the Union Miles vehicle loan offered by Union Bank?

You can choose to pay the EMI in any of the following methods.

• ECS debit facility
• Post Dated Cheques (PDCs)
• Internet banking facility available on Union Bank savings account
• Standing instruction to Union Bank of India savings account to directly remit the EMI amount to loan account

What is monthly reducing basis method for interest calculation?

Union Bank used the monthly reducing basis method to calculate interest for car loans. When the loan interest is calculated on monthly rests, the principal amount on which the interest is charged goes down significantly every month. This method of interest calculation ensures better savings for customers over the loan tenure.

What are the maximum number of EMIs that I can choose for Union Bank Car Loan?

For new four wheeler loans, customers can choose to repay the loan in maximum 84 EMIs and for old four wheelers, the maximum limit is 60 EMIs.

How is the maximum loan amount calculated for Union Bank Car Loan?

• The maximum loan amount that would be awarded is the minimum of A, B or C.
• 4 times the net annual salary or net income of the customer as per Income Tax Returns
• Total cost of the vehicle minus the margin
• Rs.125 lakh for new four-wheelers, Rs.20 lakh for old four-wheelers not older than 3 years.
• All the above conditions would be subject to the condition of 40% gross income as take home pay.

Can I apply for Union Bank Car Loan online?

Yes, you can apply for a car loan online at Union Bank’s web portal without any hassles.