This illustrious banking financial services institution was founded in the year 1865 by a group of Europeans at Allahabad in the state of Uttar Pradesh and is the oldest joint stock bank in India. Currently headquartered in Kolkata, Allahabad bank has over 2,840 branches across the length and breadth of the country. A prominent offering in its retail credit products portfolio is extension of car loan for pre-owned units.
With nominal rates, terms & charges, financing the procurement of pre-owned car from Allahabad bank can be the ideal choice. Compared to similar products in the market, you’re likely to save more with this bank. The banks disburses loans towards used cars that are not older than 3 years from the date of registration.
The bank belongs to a league which offer maximum funding for used cars. The maximum loan amount under this scheme is upto 85% of the agreed purchase price or 60% of the valuation of the vehicle, whichever is lower. This feature is one of the best in class.Low Interest Rates
Generally, the rate of interest for used car loans is substantially higher than the rates for new cars. However, Allahabad bank seems to stay away from differentiating between new and used cars. At 10.95% (Base rate + 0.75%), interest rate for used car loan is one of the lowest in the market.Premium Repayment Tenure
A firm testimony of Allahabad bank’s effort to provide the best terms is the enduring repayment tenure. Loan availed on used cars can be repaid in up to 60 months (or residual life of the vehicle), which is a whopping 5 years.Pleasing Charges & Fees
Allahabad bank charges a processing fee of just 1.20% of the total loan amount towards paperwork and handling. The bank does not penalise customer for prepayment of loan amount if paid off in full. In case of a takeover from another bank, the prepayment penalty is 2.25% of the outstanding balance.Security Clause
Until full repayment of borrowed amount and interest charges, the vehicle will be hypothecated to Allahabad bank. After successful closure of the car loan account, full ownership rights will be transferred to the borrower.
Allahabad Bank offers a specialised car loan to people who wish to purchase a used car. Termed “Dream Car”, this loan attracts interest based on MCLR (for new customers) and Base/Prime Lending Rate (for existing customers).
Allahabad Bank Marginal Cost of Funds Based Lending Rate (MCLR) (For new borrowers)
The RBI recently promulgated a change in the interest pattern followed by banks, making it mandatory for them to use the MCLR based platform for new borrowers. MCLR takes factors like current economic conditions, repo rate, cash reserve ratio and operating costs into account to calculate the final interest chargeable. MCLR for the month of May are highlighted in the table below.
|MCLR Benchmark Tenure (Period)||Benchmark Rates (MCLR)|
Used car loan interest rates – May 2016
The MCLR based interest charged by Allahabad Bank on its Dream Car Loan depends on the tenure of a loan. The current interest is MCLR + 0.75% per annum, making it a competitive offering in the market.
Allahabad Bank Base and Prime Lending Rates (For existing borrowers)
Existing customers of Allahabad Bank’s Dream Car Loan can choose to shift to the MCLR based system or continue paying interest as per the base rate. The table below highlights the base and prime lending rates applicable for such customers.
|Base Rate||9.70% per annum, effective 05/10/2015|
|Prime Lending Rate||13.95% per annum, effective 05/10/2015|
Allahabad Bank interest rate for used cars (Based on Base Rate)
The interest charged on a Dream Car Loan depends on the base rate, with Allahabad Bank having the autonomy to modify the interest based on the tenure and relationship of a borrower with the bank.
Note: Interest rates mentioned above are applicable as of May 3, 2016. These rates are subject to change without prior intimation and borrowers should check current applicable rates at the time of application.
It is highly recommended that you do a good amount of homework with a view to choose the best terms which include a conducive repayment tenure.Allahabad Bank Used Car Loan calculator comes to your rescue. This tool not only helps to ascertain monthly EMIs, but also provides a detailed breakup of various monetary costs involved and also helps you to get an all round view.