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Indian Overseas Bank is a public sector bank in India that is based in Chennai and was started in the year 1937 with two main objectives which is to specialize in foreign banking and overseas banking. The bank has grown from its humble roots in the pre-independence era to a major name in the banking world and caters to retail, corporate and NRI customers. It has many products and services that have been tailored to meet the specific needs of customers whether it is in the area of loans i.e. borrowings, deposits, digital banking, insurance, forex or merchant banking.

The loan products of the bank include many types of loans like home loans, vehicle loans, education loans, personal loans and much more. The vehicle loans of the bank are among the favoured products among many other lenders in the market. The rate of interest offered by the bank for its vehicle loans is very competent and reasonable making it an attractive option for customers. Continue reading to find all details on car loan interest rates of the Indian Overseas Bank.

Eligibility for IOB Car Loan

Indian Overseas Bank Car Loan Interest Rates

The car loans offered by Indian Overseas Bank are known as Vehicle Loans-Pushpaka. These loans can be availed for the purchase of new cars, old or used cars as well as for two wheelers. The rate of interest in each case differs as per the guidelines set by the bank in this regard. The eligibility for such loans is twofold and is discussed below.

Individual Eligibility

The eligible persons that can apply for a car loan from Indian Overseas Bank should hold permanent employment in any of the following entities,

  • A Public Sector Undertaking (PSU)
  • A Government Office
  • A Private Sector Entity
  • A self-employed Professional

The bank allows a car loan to be applied in the name of the firm or company as well. The other eligible person for these loans is an NRI provided they are able to furnish a suitable guarantee from a Resident of the country and such guarantee is acceptable by the bank.

Income Eligibility

The Bank also provides eligibility guidelines in case of the income of the applicant. A person is eligible to apply for the loan in following cases

  • The take home pay of the eligible applicant mentioned in clause A should be above a minimum of 50% of the gross salary. Such calculation is after considering the PF and Insurance Deductions.
  • The minimum monthly income of the applicant including that of the spouse to be eligible for the loan is tabled below.

Vehicle Type

Minimum Monthly Income

Car (New or used)

Rs. 8,000

Two Wheeler

Rs. 5,000

Factors Impacting the Rate of Interest of IOB Car Loans

There are several factors that impact the rate of interest of the car loans. These factors can range from personal eligibility to external factors like market fluctuation, inflation, etc. Some of the main factors influencing the rate of interest on the car loans of the Bank are detailed below.

Loan Amount

One of the biggest influencers of rate of interest on a car loan is the loan is the loan amount sought by the applicant. Indian Overseas Bank has laid an upper limit on the amount of loan that can be sanctioned in case of vehicle loans. The maximum loan permissible in case of cars and two wheelers is,

Type of Vehicle

Maximum Quantum of Loan

New Cars

90% of the market Value of car

Used Cars

75% of the Market Value of Car

Two Wheelers

Lower of ,

  • 90% of the market Value
  • 10 times gross monthly income
  • Rs. 60,000

The loan amount you borrow is one of the main contributing factors in determining the rate of interest on the car loan product.

Tenure of Loan

The tenure of the loan is another determining factor that impacts interest rates of car loans. The maximum permissible tenure of the vehicle loans of IOB varies on the type of vehicle.

Type of Vehicle

Tenure of the loan

New Cars

84 monthly installments or 7 years

Used Cars

84 monthly installments or 7 years (less the age of vehicle)

Two Wheelers

72 monthly installments or 6 years

The tenure of the loan is indirectly proportional to the rate of interest on the loan. If the tenure is longer, the rate of interest will be lesser in comparison to a loan that has lesser tenure.

Type of Vehicle

The type of vehicle is also crucial in determining the rate of interest on the loan provided. The current rate of interest offered by Indian Overseas Bank on the Vehicle loans is tabled below.

Type of Vehicle

Rate of Interest

New Cars

7.55% per annum

Used Cars

  • Up to Rs. 10,00,000 – 8.55% per annum
  • Above Rs. 10,00,000 – 9.55% per annum

Two Wheelers

10.05% per annum

Profile of the applicant

The profile of the applicant is also an important consideration in determining the rate of interest on the vehicle loan. The profile of the applicant will include consideration of various factors like the credit score of the applicant, credit history, repayment capacity, other obligations, etc.

If the credit score and the repayment capacity of the applicant are good, then the rate of interest is lower and vice versa. This is due to the fact that a person with a good credit history and credit score backed with a good repayment capacity of loan provided is a lesser risk for the bank as compared to a situation otherwise.

Down Payment

The applicant has to provide down payment in case of vehicle loans. This margin money is like a down payment that has to be paid by the borrower and is part of the cost of the vehicle to be bought on loan. The margin money is inversely proportional to the rate of interest. The higher the margin money, the lower the interest rate is the general rule in determination of the interest rate.

Type of Interest

Indian Overseas bank offers loans on fixed rate of interest or floating rate of interest. These interest types are also a critical factor in determining the rate of interest.


The inflation of the country is another factor influencing the rate of interest i.e. the floating rate of interest. When the inflation increases, the floating rate of interest also increases and vice versa. In case of fixed rate of interest, the fluctuation in inflation rate does not influence it. However, it does make it more expensive or more competitive.

Compare Car Loan Interest Rates from various Lenders

The car loans are offered by multiple lenders in the market. These lenders can be public sector banks, private sector banks or even NBFCs in some cases. Customers can have a thorough comparison of the interest rates of various lenders and can select the most suitable and affordable loan product or lender according to their needs.

The home bank i.e., the bank where the customer already has an account provides a preferential rate of interest to the existing customers as they already have a good and working relationship with such customer. A borrower can thus approach his/her home bank first for vehicle loans.

Indian Overseas Bank Car Loan Interest Calculator

Interest calculator is the option available with almost every lender where the borrower can input the details relating to the loan to be taken and can get an estimate of the interest cost and the EMI to be paid each month. The inputs to be provided for this purpose are,

  • Loan Amount
  • Interest Rate
  • Tenure

Borrowers can also use the interest rate calculator or the EMI calculator available on the website of CreditMantri to get an estimate of the interest cost involved in borrowing a vehicle loan of IOB.

Application process for the Car Loan of IOB

IOB car loans can be applied either through online or offline. Applicants can download the application form from the website of the bank or can directly approach the nearest branch of the bank to apply for a car loan. The documents required to be submitted along with the application form include:

  • Identity proof of the applicant
  • Address proof of the applicant
  • Income proof of the applicant
  • Recent Photograph
  • Proforma Invoice (for new Vehicle) and Valuation Certificate from two auto dealers of repute (for used cars)

After providing all the necessary documents and the application form, it will be further processed to determine the eligibility and credit viability of the borrower. If all the documents are in order and the credit worthiness of the borrower is sufficient as per the guidelines of the Bank, he/ she will be granted the vehicle loan under the permissible parameters.

FAQs – Indian Overseas Bank Car Loan Interest Rates

1. What is the current rate of interest offered by Indian Overseas Bank for car loans?

Indian Overseas Bank provides vehicle loans starting from 7.55% per annum. The rate of interest varies depending on the vehicle type. The details of the same are,

  • New Car Loan – starts from 7.55% per annum
  • Used car – starts from 8.55% per annum
  • Two Wheelers – starts from 10.55% per annum

2. What is the car loan of Indian Overseas Bank known as?

Indian Overseas Bank Car Loan is known as Vehicle Loans – Pushpaka

3. Is income of an applicant a deciding factor in the rate of interest for the loan borrowed?

Yes. Income of the applicant is a crucial factor in determining the rate of interest applicable on the loan sought. If the income is higher and the repayment capacity is sound, the risk borne by the lender is lower and hence the rate of interest is lower.

4. Is downpayment essential to be paid while applying for the car loan of the bank?

Yes. Downpayment is a mandatory part of the loan process. Some lenders provide 100% finance for the vehicle to be purchased, however, IOB requires down payment of minimum 10% depending on the type of loan. It also influences the interest rate as higher down payment will result in a lower loan requirement and hence lower interest rate.

5. What is the toll free number for IOB?

The toll free number of IOB is 1800 890 4445 or 1800 425 4445.

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