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DENA Bank Car Loan

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DENA Bank Car Loan

Established in 1938, Dena Bank is a public sector banking institution and one of the earliest nationalized banks in India. Dena Bank covers 1739 branches and more than 1482 ATMs pan India. Dena Bank Car Loans are offered to individuals and partnership firms, proprietary firms, corporate etc for purchasing new cars or used cars. Dena Bank is one the banks in India that offers discounted rate of interest to women on car loans.

Features of Dena Bank Car Loan

Mentioned below are some of the salient features of Dena Bank Car Loan:

  • Loan Amount- The bank offers car loans up to Rs 200 lacs for buying a new car.
  • Car Loan Disbursals- The approved car loan amount for Dena Bank Car Loan is disbursed to the car dealership directly.
  • Loan Margin- The bank requires 10% loan margin for a corporate salary arrangement, 15% for new car, and 20% for a used car which should not be older than 3 years.
  • Loan Tenure- Dena Bank offers loan tenure of up to 60 months i.e. 5 years.
  • Security/Collateral- Bank asks for security/collateral against the car loan required by the applicant i.e., the hypothecation of the purchased car is required as security against the car loan.
  • Processing Fee- Bank charges flat processing fee of Rs 500 applicable irrespective of any loan amount.
  • Prepayment Charges- There is no prepayment charges involved for early closure of Dena Bank Car loan.

Eligibility for Dena Bank Car Loan

In order to avail Dena Bank car loan, an applicant needs to satisfy the eligibility criteria set by the bank. Mentioned below are the eligibility criteria set by the bank for availing the car loan:

  • Salaried or self- employed individuals, proprietorship firms, etc having an annual income of Rs 2.5 lacs
  • Organizations, companies and partnership firms showing profit for past two years are eligible for car loan. Also, last year’s profit reflected in the audited balance sheet must be more than Rs 3 lacs.

If the above-mentioned criteria are not met by the applicant, there are ways with which the borrower can improve their eligibility. For example, if the income requirements are not met, applicant can add their family member as a co-applicant and the total income can be proposed to meet the Dena Bank car loan requirements.

Dena Bank Car Loan Interest Rates

Dena bank follows RBI mandated MCLR (Marginal Cost Based Lending Rate) to calculate the Car loan interest rate. This is how the actual interest amount payable is different for borrowers. Mentioned below are the car loan interest rates offered by Dena bank:

  • Interest rate of 9.05% p.a. for general borrowers for new car loans
  • Interest rate of 8.95% p.a. for women borrowers for new car loans
  • Interest rate of 11.40% p.a. for used car loans.

The MCLR is subject to periodic revision as per RBI’s quarterly review. You should ensure the prevailing rates at the time of applying for the car loan and check the terms and conditions of the car loan.

Also, GST of 18% is applicable on bank related services and products post 1st July 2017.

Factors affecting Dena Bank Car Loan interest rate

There are numerous factors that may affect the Dena Bank car loan interest rate and the interest amount to be paid by the applicant every month. Mentioned below are some of the factors that determine the Estimated Monthly Instalment (EMI) to be paid by the loan applicants:

Credit Score- An individual’s credit history is a great insight for banking institutions to determine whether the person is creditworthy or not. Your bank account details, your credit card statements and your previous loan records often constitute your credit score which in turn is a great piece of information to banks on which they decide whether to grant the loan to the applicant or not. The credit score is generated on your credit information report. If the applicant’s credit score is high, he/she is favoured to get the required loan amount sanctioned quickly. A score of 750 is considered favourable for getting a loan on the applicant’s name.

Loan Tenure- To negate the risk of default payments, the banks increase the interest rate applicable on the Dena Bank Car Loan. If the applicant goes for lower loan tenure, the bank is assured of quicker loan repayment and so the applicant can expect a lower interest rate.

Down Payment- If the applicant pays higher down payment, then the principal amount taken from the bank is reduced and so is the interest rate. Therefore, the percentage of loan amount reduced by the down payment made by the borrower has a favourable effect on the interest rate.

Security- Suppose the applicant doesn’t fulfil the income requirement for the car loan application. In this case, the spouse or offspring of the applicant can co-apply for car loan and get the loan approved. Their income together is considered as one for their creditworthiness and both the applicants can bargain for a low rate of interest on car loan.

Income- This ensures that applicants with high net income are credit worthy as they have high repayment credibility. A person with repayment ability can bargain with the banks for a favourable rate of interest on the car loans.

Documentation required for Dena Bank Car Loan

Mentioned below are some of the documents that are required for applying for Dena Bank Car Loan:

  • Application form duly signed along with photograph
  • Photo ID proof
  • Address proof
  • Bank statement for past 6 months

Documents required for salaried applicants

  • Salary slips for past 3 months
  • Form 16 or ITR for past 2 years

Documents required for self-employed applicants

  • ITR for past 3 years with computation of income
  • CA certified/audited balance sheet and profit and loss account statement for past 3 years.

Dena Bank Car Loan FAQs

What are the required income documents that need to be given for car loan to Dena Bank?

Mentioned below are the documents required by individuals as per their employment category:

  • For Salaried individuals- Pay slips for past 6 months, Form 16, Appointment letter/letter of increment, company profile, salary account statement for past 6 months.
  • Self Employed individuals- IT return for past 3 years, P&L statement, audited balance sheet, bank current/saving account statement for past one year.

How can we apply for Dena Bank Car Loans?

Customers can apply for Dena Bank Car loan with two options

  • Online application form
  • By hand at any nearest Dena Bank branch

Both options are chosen while applying for the loan via bank’s website. The details that need to be entered are mobile number, proposal id, ticket number etc.

What is the maximum amount of loan approved by Dena Bank for auto loans?

Dena Bank offers the maximum loan amount of Rs 200 lacs which is disbursed directly to the dealership.

Does Dena Bank charge any processing fees on the car loan from borrowers?

Yes, Dena Bank charges an amount of Rs. 500 from the borrowers along with the GST from Car loan borrowers. This amount is common for all car loans, irrespective of the loan amount.

Should the borrower have a good credit score to qualify for car loan from Dena Bank?

Yes, a good credit score is highly appreciated by the banks for offering car loans. However, bank looks at many other factors as well before approving the car loan.

Is any loan margin required for car loans from Dena Bank?

Yes, the bank charges a loan margin of 15% for new car loans. If the customer is a corporate client with Dena Bank, then the loan margin is 10% of the on-road car price. The margin requirement for used cars is 20% for cars which should not be older than 3 years.

Customer Reviews

4 / 5 (1 Reviews)
9 Feb 2019

Very good

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