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  • Vijaya Bank Car Loan Interest Rates 16 Sep 2019

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  • Vijaya Bank provides auto finance for all types of car models at attractive interest rates. Customers aged between 21 years and 60 years are eligible to procure a? Vijaya Bank Car loan. This loan facility is available for all eligible applicants who can be Government employees, corporate or private organisation employees, public sector undertaking employees, professionals, self-employed businessmen, etc. The interest rates offered for a Vijaya Bank car loan are determined based on the marginal cost of funds based lending rate (MCLR).

    The vehicle loans offered by Vijaya Bank come under the ‘V Wheels’ section. Here, loans can be availed for new cars, old cars, and two-wheelers. For second-hand cars, the vehicle must not be older than 5 years. The bank does not provide loans for used two-wheelers.

    Interest rate and other features of Vijaya Bank car loans

    Particular Charges
    Interest Rate 9.70% for V Wheels 9.55% for V Combo*
    Loan Repayment Tenure New Cars - 84 months Used Cars – 60 months
    Loan Margin 15% for new cars 30% for used cars
    Processing Charges Rs.500 for loans up to Rs.1 lakh 0.50% + GST (Minimum of Rs.1,500 + GST and maximum of Rs.10,000 + GST) for loans over Rs.1 lakh
    Quantum of Loan Up to 85% of the cost or invoice value. (100% of the invoice value will be given when the applicant fulfills certain criteria)

    *V Combo is a loan product designed specifically for existing home loan borrowers of Vijaya Bank. Only brand new four wheelers are financed under this scheme.

    About Vijaya Bank Car Loans

    Vijaya Bank was established in 1931 in Mangalore to promote banking practices and entrepreneurship amongst the farmers in Dakshina Karnataka. After becoming a scheduled bank in 1958, Vijaya Bank has grown into a leading national level bank and currently has a network of 2031 branches. Additionally, Vijaya Bank also has 2001 ATMs and 13 extension counters across various states in the country. Offering an array of banking products and solutions, Vijaya Bank leverages the latest technology to offer world class services to customers. Vijaya Bank’s portfolio consists of cards, mobile banking, internet banking, phone banking, savings, deposits, loans, remittances, etc.

    The Vehicle Loan scheme from Vijaya Bank can be availed for the purchase of new cars by all types of applicants. Vijaya Bank generally sanctions up to 85% of the vehicle or the invoice value and the applicant is required to put in the rest. Vijaya Bank car loans can be taken for a period of up to 84 months at an affordable interest rate. Customers have to submit the required documentation and application form to Vijaya Bank to get a car loan sanctioned without any hassles.

    How do you calculate Interest Rates for a Vijaya Bank Car Loan?

    A customer can conveniently repay a Vijaya Bank car loan through equated monthly installments or EMIs, taken according to their financial situation. The equated monthly installment is the total amount that has to be paid by the borrower, on a monthly basis to Vijaya Bank after obtaining the car loan. The EMI amount includes the principal amount and the floating interest rate offered by Vijaya Bank. When the loan tenure begins, borrowers will have to pay huge portions of the monthly installment as interest charges, with a small portion allotted for the principal amount. As the car loan tenure advances, the principal amount to be repaid increases significantly, with the interest rate amount reduced.

    The EMI for a Vijaya Bank 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. Vijaya Bank charges a floating interest rate of up to 10.05% for all types of customers, which is calculated as the base rate plus 0.40%.

    For a principal amount of Rs.1 lakh given at an interest rate of 9.70% 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, 05,332, out of which the interest will be around Rs.5,332.

    The following table provides an example for a car loan amount of Rs.5 lakh to be repaid in 5 years at an interest rate of 9.70% from Vijaya Bank (Calculations based on EMIs paid in advance):

    Year EMI Amount Interest Amount Principal Amount Balance Due
    2019 Rs.1,26,598 Rs.44,933 Rs.81,666 Rs.4,18,334
    2020 Rs.1,26,598 Rs.36,649 Rs.89,949 Rs.3,28,385
    2021 Rs.1,26,598 Rs.27,526 Rs.99,073 Rs.2,29,312
    2022 Rs.1,26,598 Rs.17,477 Rs.1,09,122 Rs.1,20,190
    2023 Rs.1,26,598 Rs.6,408 Rs.1,20,190 0

    The total interest to be paid towards a Vijaya Bank Car Loan for an amount of Rs.5 lakh would be Rs.1,32,992.

    Factors affecting Vijaya Bank Car Loan Interest Rates

    Interest rates for a Vijaya Bank car loan might be determined based on various factors and also on the customer’s profile. Some of the key factors which might affect interest rates are as follows -

    Down Payment - The down payment amount given by a borrower towards a car loan plays an important part in determining the interest rates. Making a huge down payment might be difficult, but definitely benefits the borrower in the long run. Banks will give better deals on car loans and will give lower interest rates if the customer makes an acceptable amount as the down payment. A lump sum down payment amount also lowers the monthly installment amount during the loan tenure.

    Income - The income criteria of an applicant is generally given more weightage than any other factor. Banks look into the annual income earned by an applicant and decide on a car loan deal based on that. Even the interest rate offered might go up or down based on that. Customers can always add a co-applicant to improve their income criteria, when they apply for a Vijaya Bank car loan.

    Market Fluctuations - Interest rates tend to vary with market conditions and also due to any sudden changes. The inflation rate is a major factor that affects car loan interest rates. The interest rate might increase if the inflation rate goes up and vice versa. Interest rates might also change due to rate revisions done by the Reserve Bank of India on a periodic basis.

    Car Model - Sometimes the car model selected by the borrower might affect the interest rates offered by the lending institution. Since the hypothecation of the new vehicle is mandatory while availing a car loan, banks will always take into consideration, the car model before deciding on a particular interest rate for the customer. The reputation and the resale value of the car model chosen are also additional factors that will be considered. This is generally given a thought because, in case the borrower is not able to repay the vehicle loan back, the lender might seize the car and sell the car to recover the loan amount. So when an individual chooses a car model, he must make sure that it fits right into his budget and repayment capacity.

    How does CIBIL score affect Vijaya Bank Car Loan Interest rates?

    Having a good CIBIL score is a key criteria to get a low interest rate for any new car loan. Banks generally give preference to customers who have a good score with a steady income and regular payment patterns. These type of applicants are seen to be more reliable and will not have any hassles repaying the car loan. Banks will offer the best possible deal and low interest rates to customers with good scores. Customers who carry a low score might not be able to get an affordable car loan interest rate and might sometimes face rejections from lenders.

    Key Pointers to know about Vijaya Bank Car Loan Interest Rates

    • Vehicle loans offered by Vijaya Bank are subject to change based on the revision in MCLR. However, once the loan is taken, the interest rate will remain the same for the entire loan term.
    • Vehicle loans are also offered for large commercial vehicles and transport vehicles. You can check the features of this loan under the ‘V Vehicle’ section of Vijaya Bank.
    • Vehicle loans are secured by the value of the vehicle. If the borrower does not repay the loan amount, the bank may repossess the vehicle for the outstanding loan amount.

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