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    United Bank of India Car Loan Interest Rates

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    Overview About United Bank of India Car Loan

    The United Bank of India (UBI) was nationalized in 1969 and has been a leading financial institution providing excellent banking solutions in India. UBI has been nominated as the Lead Bank in the states of West Bengal, Manipur, Assam and Tripura and is also the Convener of the State Level Bankers' Committees (SLBC) for Tripura and West Bengal. United Bank of India is also responsible for spreading banking services particularly in the North-eastern and Eastern part of India. Known as the “Tea Bank”, UBI is the largest lender to finance tea gardens in North-eastern India. The United Bank of India also has three full-fledged branches in New Delhi, Kolkata and Mumbai providing an array of banking services. UBI customers can also enjoy internet banking and mobile banking services, along with the bank providing a wide network of ATMs across the country for access to instant funds.


    The United Car Loan Scheme can be availed by different customers for the purchase of new cars to be used for private purposes. Indian customers can get car loans for up to Rs 30 lakhs and NRIs are eligible to take loans up to Rs 40 lakhs. The bank requires customers to provide security in the form of hypothecation of the vehicle bought. A United Bank of India car loan can be easily repaid with loan tenures ranging up to 84 months. The interest rate for a United Bank of India car loan is determined based on the loan tenure selected and the prevailing base rate of the bank.

    United Bank of India Car Loan Interest Rates 2015

    The United Bank of India car loan can be procured by salaried individuals, self-employed professionals, partnership and proprietary firms and companies with a savings, term deposit or current deposit with UBI. Customers are offered interest rates depending on the loan tenure opted. For any loan repayment term up to 84 months, United Bank of India is currently offering a low interest of 10.40%, that is 0.50% plus the current base rate.

    Base Rate of United Bank of India - 9.65%

     

    New Car Interest Rates - FLOATING

    Loan Tenure up to 84 months

    Base Rate + 0.50% = 10.40% per annum

    Interest Rate Concession

    Under the United Car Loan scheme, certain borrower types can enjoy an interest rate concession of 0.50% from United Bank of India.

    The borrowers eligible for the concession are -

    • Existing loan customers of United Bank of India, with the completion of two years of steady repayments.
    • Credit card account holders, holding UBI cards for a period of two years, with regular spending patterns and repayments and holding a credit risk rating of UBICR-3.
    • Firms, institutions, companies and corporates are also eligible if the repayment if done using a single cheque or through direct credit to the loan account.

    Loan Margin

    Individuals / Corporate Firms - 15% of the on-road price

    Loan Tenure

    Maximum Tenure - 84 Months

    Processing Charges

    0.50% of the loan amount

    Minimum - Rs.500/-

    Maximum - Rs.10000/-

    Quantum of Loan

    Indian Residents - Up to a maximum of Rs 30 lakhs

    Non-Indian Residents - Up to a maximum of Rs 40 lakhs

    Foreclosure Charges

    NIL

    Documentation Charges

    NIL

    Security/ Third Party Guarantee / Hypothecation

    Required for new vehicles

    How do you calculate Interest Rates for a United Bank of India Car Loan?

    Choosing to repay a United Bank of India car loan using equated monthly installments is one of the most convenient options available to customers. An EMI or otherwise called as an equated monthly installment is the total amount that has to be repaid back by the borrower, after availing a UBI car loan. Customers have to make the repayment within a particular time period called loan tenure and the EMI amount is inclusive of the interest rate charged by UBI along with the principal amount. When the car loan tenure starts, customers have to pay a specific amount every month. Initially, the monthly installment would contain higher interest rate amounts and a small principal amount. After a certain period in the loan tenure, the interest rate amount starts reducing significantly, with more principal amount being added to the monthly installment.

    The EMI for a United Bank of India car loan can be calculated as follows -

    EMI (E) = [P x r x (1+r) ^n]/ [(1+r) ^n-1]

    Where,

    P = The Principal Loan Amount

    R = The Interest rate charged per month. United Bank of India charges a floating interest rate of 10.40% for all types of applicants. This is calculated depending on the base rate, which is currently 9.65%.

    N = Number of monthly installments i.e. the number of years opted for the repayment of loan.

    For a principal amount of Rs. 1, 00,000 given at an interest rate of 10.40% and a loan tenure of one year, an estimate of the total sum of EMIs that has to be paid by the borrower is Rs. 1, 04, 815, out of which the interest will be around Rs. 4815.

    The following table illustrates the total cost that will be incurred for a car loan amount of Rs. 4, 00,000 to be repaid in 48 months at an interest rate of 10.40% from United Bank of India (Calculations based on EMIs paid in advance):

    Year

    EMI Amount

    Interest Amount

    Principal Amount

    Balance Due

    2015

    Rs. 30,403

    Rs. 6,699

    Rs. 23,704

    Rs. 3,76,296

    2016

    Rs. 1,21,611

    Rs. 35,088

    Rs. 86,523

    Rs. 2,89,774

    2017

    Rs. 1,21,611

    Rs. 25,648

    Rs. 86,523

    Rs. 1,93,811

    2018

    Rs. 1,21,611

    Rs. 15,178

    Rs. 1,06,433

    Rs. 87,378

    2019

    Rs. 91,208

    Rs. 3,830

    Rs. 87,378

    Rs. 0

    The total interest to be paid towards a United Bank of India Bank Car Loan for an amount of Rs. 4, 00,000 would be Rs. 86443.

    Factors affecting United Bank of India Car Loan Interest Rates

    Interest rates for a United Bank of India car loan might be offered based on various factors and also on the applicant’s financial profile. Some of the important factors affecting interest rates for a United Bank of India car loan have been listed below -

    Income - A customer’s income plays a very important role in determining the interest rate for a car loan. If the applicant has an acceptable income, then he will be able to make a higher down payment amount, thereby getting a car loan deal at low interest rates. To improve the income criteria, customers can opt for a co-applicant, where the bank will consider the combined income of both the applicants.

    Down Payment - Financial experts always suggest that customers should make higher down payments to lower the burden of repayments. Huge amounts will also help customers shorten their loan tenures and reduce the EMI amounts, thereby cutting the total cost of the car loan. Banks will definitely prefer customers who have paid a good lump sum and might offer very low interest rates for the short loan tenure.

    Debts - As a general rule, customers should apply for any kind of loan with minimum liabilities and outstanding debts. The debt to income ratio is an important factor that banks consider while granting car loans. Any borrower should be able to comfortably repay the new car loan along with other liabilities and commitments.

    Loan Tenure - When a car loan is availed, customers should always opt for shorter tenures. Longer tenures attract more interest rate charges. Since the tenure is short, the customer would have made a huge down payment amount and this ensures that lenders are forced to give the applicant the best deals with regards to interest rates.

    How does CIBIL score affect United Bank of India Car Loan Interest rates?

    Most banks approve car loans based on the credit score and credit history of an applicant. It is very important that every applicant presents a good score to get an affordable car loan deal. A good score is a reflection of the customer’s regular payment patterns and efficient money management capabilities. Having a high CIBIL score boosts the bank’s confidence in the customer and this might open various avenues for the borrower to save money. Lending institutions might not sanction car loans for applicants with bad scores and even if they do offer a loan package, it will be at high interest rates.

    Key Pointers to know about United Bank of India Car Loan Interest Rates

    • The interest rate offered for a United Bank of India Car Loan is fully dependent on the base rate and will be calculated according to the revision done by the bank.
    • If borrowers show security collateral for 50% of the loan value, then the interest rate concession given by UBI would be 0.25%. The collateral provided should be in the form of liquid assets or any tangible security.
    • Since the interest rate is a floating rate, market fluctuations might affect a borrower’s monthly installment amounts. As the loan tenure advances, the interest rate might vary on a yearly basis.
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