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 1512 branches. Additionally, Vijaya Bank also has 1528 ATMs and 48 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 a floating rate of interest. Customers have to submit the required documentation and application form to Vijaya Bank to get a car loan sanctioned without any hassles.
Vijaya Bank provides auto finance for all types of car models at attractive interest rates. Customers aged between 21 and 70, who are Government employees, Corporate or private organisation employees, pensioners, Professionals and self-employed businessmen are eligible to procure a Vijaya Bank Car loan. The interest rates offered for a Vijaya Bank car loan are floating rates, which are determined depending on the current base rate of the bank. Since car loans carry floating interest rates, customers do not have pay any foreclosure charges, when they prepay their loans.
|New Car Interest Rates - FLOATING|
|Loan Tenure of up to 84 months||Base Rate (9.65%) + 0.40% = 10.05%|
|Vehicle loan for up to Rs 2. lakhs||10.25%|
|Vehicle loan - Above Rs 2. lakhs||10.30%|
|Loan Tenure||Maximum Tenure - 84 months|
|Loan Margin||15% for new cars|
|Processing Charges||Ranging from 0.1% to 0.55%, depending on the loan amount.|
|Quantum of Loan||Up to 85% of the cost or invoice value. 100% of the invoice value or cost of the vehicle will be given during the following scenarios - Salaried Employees - If the salary mandate is provided by the employer and the applicant’s salary is remitted through Vijaya Bank. If the mortgage of a property secured to an existing home loan is provided as security.|
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]
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%.
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 10.05% 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, 527, out of which the interest will be around Rs. 5527.
In the following example, for a car loan amount of Rs. 4,00,000 to be repaid in 60 months at an interest rate of 10.05% from Vijaya Bank (Calculations based on EMIs paid in advance):
|Year||EMI Amount||Interest Amount||Principal Amount||Balance Due|
|2015||Rs. 25,526||Rs. 9,920||Rs. 15,606||Rs. 3,84,394|
|2016||Rs. 1,02,104||Rs. 35,625||Rs. 66,479||Rs. 3,17,915|
|2017||Rs. 1,02,104||Rs. 28,627||Rs. 73,477||Rs. 2,44,438|
|2018||Rs. 1,02,104||Rs. 20,893||Rs. 81,211||Rs. 1,63,227|
|2019||Rs. 1,02,104||Rs. 12,344||Rs. 89,759||Rs. 73,467|
|2020||Rs. 76,578||Rs. 3,111||Rs. 73,467||Rs. 0|
The total interest to be paid towards a Vijaya Bank Car Loan for an amount of Rs. 4, 00,000 would be Rs. 81893.
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.
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.