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Introduction

Indian Bank is one of the oldest banks in India and has been operational since 1907. It offers various banking services like consumer banking, corporate banking, finance and insurance, mortgage loans, investment banking, merchant banking, private equity, private banking, savings and credit cards. It is a public-sector banking organisation owned by the government that has its headquarters in Chennai, Tamil Nadu. The bank has more than 2,500 branches worldwide.

Indian Bank car loans come with a speedy approval process hence making it one of the most popular loans in the market. Indian Bank, one of the leading banks in India, offers car loans to varied individuals depending on the loan requirement. The loan provided can be repaid in EMIs over a comfortable period of up to 84 months. The borrower can get low interest rates in the market.

One can get an IB Vehicle Loan to purchase a new car, or a used car. The loan amount sanctioned is up to 85% of the on road cost of the vehicle. IB Vehicle Loans also come with attractive interest rates and repayment tenure. The interest rate on a car loan depends on various factors; the loan amount, repayment tenure, your repayment capacity and so on.

The applicant should gauge these factors carefully, before choosing the best car loan for them. Let’s have a look at Indian Bank Car Loan interest rates and the various factors affecting it.

Snapshot of Indian Bank Car Loan Interest Rates

Indian Bank Car Loan Interest Rates

Indian Bank Car Loan Types

New Car Loan Interest Rates

Used Car Loan Interest Rates

IB Vehicle Loan

7.90%

10.85%

Eco vahan

Salary 7.65%

Not Applicable

Professional 7.75%

Business Class 8.00%

Loan Tenure

Upto 7 years

Upto 5 years

Loan Amount

Up to 85% of on road price

Up to 60% of the vehicle’s market value

Factors Affecting your Indian Bank Car Loan Interest Rates

Car loan interest rates are not the same for every applicant. It differs based on a few factors like your age, salary, employer, credit score and so on. Here is a look at the most important factors that affect your Car Loan interest rates at Indian Bank;

Credit Score

Your credit score is an important criterion to determine your car loan interest rate. A good credit score means that you are good with your repayment history. It ensures a higher loan amount and lower interest rate. Banks consider a higher credit score as an indication of your creditworthiness. This highly impacts your loan amount and interest rate eligibility.

Income

A higher income ensures timely repayment of the loan. Banks give better loan terms to individuals with higher income and low credit utilisation ratios. Banks also prefer salaried individuals as against self-employed individuals because salary ensures regular cash flow into your account. However, self-employed professionals have an advantage over salaried individuals as they earn higher than salaried individuals.

Age

The applicant’s age plays an important role in the car loan application process. Younger the applicant, more the number of earning years he has to repay the loan. Car loans can be availed by individuals who are 21 years of age. The loan amount as well as the interest rates are very favourable for applicants of younger age as compared to older applicants.

Employment type & Employer

Employment with a reputable organisation will definitely get you a good deal on your Indian Bank Car Loan interest rates. Many banks have a list of accredited employers and respectable entities that they refer to when approving the loan. Jobs in these companies guarantee work security and income flow to the bankers. You are also bound to receive an offering of higher loan amounts and lower interest rates.

Vehicle Model and Age

In the case of a car loan, the vehicle shall serve as collateral. In the event that the EMIs are not received, the bank or the NBFC will seize the vehicle. The type and age of the vehicle are then taken into account when setting interest rates. New vehicles from a reputable maker have lower interest rates relative to older ones. Used vehicles often come with high interest rates, since the value of the vehicle depreciates with age.

Relationship with the lender

Customers of the bank with a long standing relationship are often granted priority, depending on the fact that their credit background is easier to access. If you are a current Indian Bank customer, the bank will be able to verify your account records, any existing credit or credit card payments and your general financial status. Preferential interest rates on loans are thus granted to the existing customer.

Contributions from a co-applicant

If you have another earning family member, you can add them as co-applicant on the loan so that their income is also taken into consideration while processing your car loan application. When both your incomes are entered, it results in higher repayment capacity and thus giving you a lower interest rate.

Down Payment Amount

Though Indian Bank gives you up to 85% of the on road cost of the vehicle as loan amount, if you can pitch in a higher down payment, you can negotiate for better interest rates. Higher down payments mean lower loan amount and better repayment capacity. Banks are constantly looking for low risk loan customers to reduce their loan default risk. Hence, when you offer a higher down payment, you have a chance of getting a lower interest rate.

Existing liabilities and assets

Last but not the least, your existing debts and liabilities play an important role in determining your car loan eligibility and interest rates. If you have existing liabilities, it diminishes your repayment capacity. This is considered a high risk proposition for the lender. It will also put additional cash flow stress on you. Hence, an applicant with very low or nil existing liability is a preferred candidate for any bank.

Benefits of getting a car loan from Indian Bank

Indian Bank has been in the service of the Indian public for several decades. They have various financial products to cater to a wide variety of customer segments. IB-Vehicle Loan offers preferential rates and various discounts to its applicants;

  • Indian Bank Car Loans are available for both salaried and self-employed individuals.
  • Exclusive rates for holders of Indian Bank accounts
  • Car Loans given to age groups between 21 and 65 years of age
  • Loan to Value Ratio is up to 85% of the on road price of the vehicle
  • The cumulative term of the loan is up to 7 years
  • Interest rates starting from just 7.90%

Indian Bank Car Loan Eligibility Criteria

Eligibility Criteria

Eligibility Details

Age

21 years - 65 years

Minimum Annual Income

Salaried: Rs. 2.40 Lakhs
Self Employed Professionals: Rs. 2.40 Lakhs
Self Employed Businessmen: Rs. 2.40 Lakhs

Loan Tenure

7 years

Loan to Value Ratio

85% of on-road price

Documents Required for Indian Bank Car Loans

One has to submit the following documents, along with the duly filled application form, to avail an Indian Bank Car Loan:

Salaried Employees

  • Filled up loan application form
  • 2 Passport Size Photo
  • Copy of Income Tax PAN
  • Identity Proof –Aadhaar, Passport/ Driving License/ Voter ID/ PAN
  • Quotation of car
  • Residential Address Proof - Leave and License/ Registered Rent Agreement/ Utility Bill (up to 3 months old), Passport
  • Income Documents – 3 months’ pay slip, 2 years Form 16, 3 months’ bank statement showing salary credit and any EMI debit
  • R.C of Vehicle and Insurance of Car (For Used Cars)

Self-Employed

  • Filled up loan application form
  • 2 Passport Size Photo
  • Copy of Income Tax PAN
  • Identity Proof – Aadhaar, Passport/ Driving License/ Voter ID/ PAN
  • Quotation of car
  • Residential Address Proof - Leave and License/ Registered Rent Agreement/ Utility Bill (up to 3 months old), Passport
  • Income Documents – 3 months’ pay slip, 2 years’ Form 16, 3 months’ bank statement showing salary credit and any EMI debit
  • R.C of Vehicle and Insurance of Car (for used cars)

How to apply for Indian Bank Car Loan?

You may apply for a car loan from Indian Bank by calling the bank directly or by applying online. Loan application through an online platform increases the odds of having the best lending rates, low payment costs and exclusive deals in the form of cash backs. When you contact the bank, they will gather your paperwork and start the loan process which involves verifying your credit score, the valuation of the car, and the calculation of eligibility. The bank will make a recommendation on your loan depending on the outcome of the appraisal.

FAQs

1. What are the common factors affecting my Indian Bank Car Loan Interest rates?

The following factors play a vital role in determining your car loan interest rates:

  • Credit score
  • Income
  • Age
  • Vehicle make and model
  • Employment status & Employer
  • Co-applicant details
  • Down payment
  • Existing liabilities and assets

2. What is the lowest interest rate I can get on Indian Bank car loans?

Currently, Indian Bank offers car loans starting with an interest rate of 7.90%. as stated earlier, the number is determined based on various factors.

3. Can I add my wife, who is an employee with a reputed MNC, as my co-applicant on the car loan application?

Very much. Adding a co-applicant increases your chance of getting competitive interest rates on your Indian Bank Car Loan. Also, a reputed employer can give you additional preference.

4. Can I make part pre-payments into my Indian Bank Car loan account?

No, part pre payments are currently not allowed under your Indian Bank Car Loan account.

5. What is the maximum tenure of Indian Bank car loan?

Indian Bank car loans come with a flexible repayment tenure of up to 7 years.

6. How much processing fee is charged by Indian Bank on car loan?

Indian Bank charges a processing fee of 0.50% on the loan amount subject to a Max. of Rs. 10000 with applicable taxes.

7. How much car loan can I borrow from Indian Bank?

Indian Bank offers you 85% of the on-road price of the car as loan amount.

8. Is age an eligibility factor to get a car loan from Indian Bank?

Yes, age is an important eligibility factor to get Indian Bank car loan. You should be at least 21 years old at loan approval time and 65 years old at loan maturity time. Younger the applicant, more the number of earning years he has to repay the loan.

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