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Introduction

Lakshmi Vilas Bank is a leading private sector bank of the country. It was established way back in 1926 and over the years has grown to build a large customer base. It has a huge range of products and services offered to Retail, Corporate, NRI and MSME customers. The loan products of the Bank include the car loans which can be availed to purchase a car for personal use as well as commercial vehicles. Given below are the details of the car loans available at the bank for personal use.

Key Points of Lakshmi Vilas Bank Car Loans

Lakshmi Vilas Bank Car Loan Interest Rates

The car loans of the bank for personal use are known as Lakshmi Personal Vehicle Loans. These loans can be availed for purchase of new cars as well as used cars and two wheelers. The underlying condition in case of loans for used cars is that such car cannot be older than 4 years from the date of its first registration. The key points of such vehicle loans are tabled below.

Particulars

Details

Maximum Amount of Loan

For New Cars

Lower of,

  • 85% of price of vehicle as per invoice
  • 25 times Net Monthly Income
  • Rs. 25,00,000

For Used Cars

Lower of,

  • 60% of price of vehicle as per invoice
  • Rs. 10,00,000

Rate of Interest

For New Cars

  • 8.80%

For Used Cars

  • 11.55%

Tenure

For New Cars

  • Maximum 72 months (6 years)

For Used Cars

  • Maximum 36 months (3 years)

Primary Security

Hypothecation of the vehicle to be purchased out of loan 

Guarantee

Suitable guarantor that has a sufficient net worth as acceptable by the bank (mandatory in case of four wheeler loans)

Processing Charges

0.5% of the loan amount.

  • Minimum – Rs. 1,000
  • Maximum – Rs. 10,000

The details of the key points mentioned above are detailed hereunder.

Quantum of Loan

Lakshmi Vilas Bank provides up to 85% of the value of the on road price of the vehicle. The quantum of loan disbursed is different in case of new cars and used cars. The loan amount to be sanctioned in each case is calculated as per the guidelines of the bank as tabled below.

New Cars

Used Cars

Lower of,

  • 85% of price of vehicle as per invoice
  • 25 times Net Monthly Income
  • Rs. 25,00,000

Lower of,

  • 60% of price of vehicle as per invoice
  • Rs. 10,00,000

Rate of Interest

The rates of interest levied on the Car Loans of the bank are based on the Repo rate. These rates differ in case of loans for purchase of new cars or used or second hand cars. The current applicable rates levied by Lakshmi Vilas Bank for Vehicle Loans are tabled below.

Loan Type

Calculation 

Applicable Interest Rate

New Cars

Repo rate + operating expenses 2.10%

8.80%

Used Cars

Repo rate + operating expenses 4.85%

11.55%

Tenure

The tenure of the car loan offered by the bank is different in case of new cars and used cars. The tenure for new cars is longer as compared to that of the used cars. The details of the same are tabled below.

Type of Vehicles

Tenure 

New Vehicle

6 years (72 months)

Old/ Used Vehicle

3 years (36 months)

Borrowers can repay the loan through post dated cheques or ECS or auto debits.

Security

Like any other car loan, the primary security against the loan provided by the Bank is the vehicle purchased out of the loan. Lakshmi Vilas Bank has a hypothecation charge on such vehicles which has to be registered as well. Additional security if required on case to case basis can be demanded by the bank based on its discretion.

Apart from the above, the bank also requires the borrower to provide guarantee of the owners of the collateral security or a third party guarantee of a person having suitable net worth that can be acceptable to the Bank. Such guarantee is mandatory in case of four wheelers.

Processing fees

The bank also charges nominal processing fees in case of loans sanctioned. These charges are a percentage of the loan amount (0.5% of the loan amount) subject to minimum and maximum fees levied on each loan.

Processing charges

Amount

Minimum Charge 

Rs. 1,000

Maximum Charge

Rs. 10,000

Part payment or Foreclosure Charges

Lakshmi Vysya Bank currently does not levy any part payment or foreclosure charges on its personal vehicle loans. However, the proposed charges for the same are,

Processing charges

Amount

Part Payment Charge 

2% of the Principal Outstanding amount

Foreclosure Charge

4% of the Principal Outstanding amount

What are the current interest rates on car loans from Lakshmi Vilas Bank?

The car loan interest rates offered by Lakshmi Vilas Bank are very competitive and affordable as compared to many other lenders in the market.

Rate of Interest

For New Cars

  • Starts from 8.80%

For Used Cars

  • Starts from 11.55%

What are the various factors that affect the interest rates on car loans?

Interest cost is the cost of getting finance from an external lender. The interest rate is dependent on many factors like the policies of the bank, the cost to the bank for lending the funds, external factors, credit history of the applicant, etc. These factors impact the interest rate that is levied on the car loans offered by the Bank.

Some of such factors are discussed below.

  • Lakshmi Vilas Bank charges interest based on the Repo rate and these rates are further influenced based on the cost incurred by the bank for lending the funds.
  • Type of interest rates also impacts the final interest rate. Floating rates of interest are generally lower than the fixed rate of interest and hence make it a better option for the customers to choose a loan product.
  • A reduced tenure will also reduce the rate of interest. This is as the risk of default is reduced in case of loans with shorter tenure as compared to a longer tenure. Although a shorter tenure will result in higher outflow of EMI which is another point of consideration for the Bank. In such cases, the repaying capacity of the borrower is reviewed thoroughly.
  • Inflation in a country also impacts the interest rates, especially the floating rates which are directly proportional to the inflation.
  • Fixed rate of interest although does not change directly due to inflation but does become cheaper or costlier depending on the inflation.
  • The credit profile of the applicant is a key factor in determining the interest rate. Lower credit score is a higher risk applicant and hence will not get the benefit of lower interest rate and vice versa.

A person with good repaying capacity also gets the benefit of a lower or reduced rate of interest as it will ensure the Bank that such borrower is of lower risk for default in payment of EMIs.

Who is eligible for Lakshmi Vilas Bank Car Loan?

Lakshmi Vilas Bank provides car loans for purchase of new cars and used cars for personal use. Such loans are provided to the following class of applicants.

  • Permanent Employees of Reputed Organizations
  • Professionals
  • Self-Employed Individuals
  • Entrepreneurs
  • Agriculturists

The age requirement for such applicants to be eligible is

Age Requirement

Years

Minimum Age

21 years

Maximum Age

65 years

Furthermore, the bank has also laid down income criterion for the applicants to qualify for the loans. The minimum annual income requirement of the bank for its personal vehicle loans is Rs. 1,20,000 in case of loan for purchase of four wheelers. The bank has also stipulated that the net monthly income of the applicant has to be at least twice the proposed EMI of the loan applied. For this purpose, the bank may consider the income of the spouse or family members of the applicant (provided it is thoroughly verified).

What are the documents needed for Lakshmi Vilas Bank Car Loans?

The bank requires the applicants to provide certain documents that form part of the application. These documents are basic KYC documents along with documents related to the vehicle to be purchased and income related documents.

The details of such documents are provided below.

KYC Documents

Identity Proof 

  • Passport
  • Aadhaar Card
  • PAN Card
  • Election Id card
  • Driving License

Address Proof

  • Passport
  • Aadhaar Card
  • PAN Card
  • Election Id card
  • Driving License
  • Rental Agreement
  • Sale Title/Property Title of the House
  • Latest Utility Bills

Recent Passport Size Photograph

Bank Statement for past 6 months

Income documents

For agriculturists

  • Declaration by the applicant detailing the land holdings, crops cultivated on such land, income from such occupation certified by VAO and confirmed by Branch Head/ AFO (Agri  Field Officer)

For others

  • Form 16
  • Latest Salary Slip/Certificate
  • Latest ITR

Documentary evidence in case of rental income, dividend income, interest or commission income

Vehicle Documents

  • Proforma Invoice of the vehicle to be purchased
  • RC copy of the Vehicle
  • Insurance Copy of the Vehicle

FAQs - Lakshmi Vilas Bank – Car Loan Interest Rates

1. What is the application process for Lakshmi Vilas Bank Car Loan?

Applicants can apply for the car loans of the bank either by directly visiting the nearest branch of the bank or by making an online application through the website of the bank. The link for such online application is, Home>>Retail Banking>> Retail Loans>> Personal Vehicle Loans>> Apply Online Applicants can also download the application form available online on the website of the bank. The link for the same is given below. Home>>Retail Banking>> Retail Loans>> Personal Vehicle Loans>> Loan Application

2. What is the current interest rate on car loans of Lakshmi Vilas Bank?

The current interest rate on car loans of Lakshmi Vilas Bank is

Type of Vehicles

Rate of Interest

New Vehicle

8.80%

Old/ Used Vehicle

11.55%

3. What is the part payment and foreclosure charges of Lakshmi Vilas Bank Car Loan?

The bank does not currently levy any charges on part payment of the loan or foreclosure of the loan before the completion of the tenure. However, the bank has proposed to levy nominal charges on such payments namely, 2% and 4% of the principal outstanding amount respectively.

4. What are the age requirements to be eligible to apply for the bank’s car loans?

The bank states that an applicant has to be minimum 21 years of age and maximum 65 years of age to be eligible for the bank’s car loans.

5. What is the maximum quantum of loan that can be availed for purchasing a used or second hand car?

The maximum amount of loan under Lakshmi Vilas Bank Personal Vehicle Loan for purchasing a used car is 60% of the value of the car or Rs. 10,00,000.

6. What is the minimum amount of processing fees to be paid for car loans of LVB?

The minimum processing fees for car loans of LVB is Rs. 1,000.

7. What is the tenure for a used car loan of the bank?

The tenure for the used car loan of the bank is 3 years or 36 months.

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