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Tamilnad Mercantile Bank Car Loan

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Tamilnad Mercantile Bank Car Loan

Cars are considered as a luxury that everyone wishes to have. Whether it is for the drive to work or a long trip on a leisurely weekend, cars serve the purpose of providing the much-needed comfort for long or small distances.

Buying a car used to be a milestone in any individual’s life, but today owning a car is not a big deal. Yes, individuals have to shell out a huge amount to make this dream come true but with a myriad of financial institutions offering car loans, buying a car was never this simple.

Tamilnad Mercantile Bank offers one such car loan option you can look into. However, it is important that you make adequate plans before opting for Tamilnad Mercantile Bank car loan. In the following sections, we will discuss some tips on getting your Tamilnad Mercantile Bank car loan approved:

About Tamilnad Mercantile Bank

Tamilnad Mercantile Bank (TMB) was established in 1921 in Tuticorin, Tamil Nadu and was known as Nadar Bank. In 1962, it was renamed to Tamilnad Mercantile Bank in 1962. Currently, the bank has more than 400 branches across India and has its headquarter in Tuticorin.

Features of Tamilnad Mercantile Bank Car Loan

With a range of attractive interest rates on its car loan schemes, car loans can be availed by individuals, legal entities such as Corporations, Trusts, Partnership Firms and Hindu Undivided Families (HUF).

ObjectiveTo purchase a new car/four wheeler of borrower’s choice for personal or professional use.
Processing Amount1.00% of Limit sanctioned without any maximum cap.
Loan QuantumUpto Rs. 150 lakhs for new cars
Upto Rs 15 lakhs for purchasing second hand cars.

Car Loan Interest Rate

Annual Interest Rates
  • Interest rate of 11.40% (BR + 1.00%) for a loan tenure below 36 months
  • Interest rate of 11.65% (BR + 1.25%) for a loan tenure above 36 months till 60 months.
  • 10.40% is the current Base Rate (BR).
Maximum Loan amount offeredUpto Rs. 150 lakhs if offered for purchase of a new car as the maximum loan amount.
Loan Tenure12 months to 60 months
Pre payment charges0.25%
EMIRs. 2,207-(estimated value) for a tenure of 5 years at 11.65 % interest rate

Documentation required for applying Tamilnad Mercantile car loan

Here is the list of documents needed for applying for Tamilnad Mercantile car loan:

Identity ProofsFollowing identity proofs are needed:
  • Age proof
  • ID proof
  • Resident proof
Forms to be filled
  • Bank’s application form
  • Two passport sized photographs
For Salaried individuals
  • Pay slips of last 3 months
  • Bank statement of last 3 months
  • IT return and Form 16 for past 2 years
For Self employed
  • Proof of existence of business
  • Bank statement of past 12 months
  • IT returns for past 2 years
Other Documents
  • Sale letter and valuation letter from authorized car dealer (in case of used car loans)
  • Property documents for car loans above 25 lakhs

Factors that affect Car Loan Interest Rates

Mentioned below are some of the factors that play a crucial role in applying for car loan and getting the favourable interest rates:

Credit Score-

Once an individual submits his/her car loan application form with the bank, the bank checks applicant’s credit history and calculate their credit score. A high credit score can influence the interest rate in Tamilnad Mercantile Bank Car Loan. It is true that credit score alone is not the deciding factor for the interest rates, other factors also play an important part; but credit score is of key importance. You might get a loan on an average credit score, but chances are that the interest rate applicable on your application can be more so as to go against the risks involved with it.

Fluctuation of Base Rate-

Often the fluctuation in base rate plays a vital role in calculating car loan interest rate as the interest rate is related to this factor. Fluctuations in stock market, inflation, repo rate deductions from Reserve Bank of India etc are the factors that affect the loan base rate. For example, Inflation marks an increase in interest rates and therefore the borrowers need to stay prepared for any such situation when they apply for a loan.

Tenure

The borrower can select the tenure for Estimated Monthly Instalments (EMIs) and this is also a major factor that affects the car loan interest rates. If you choose the car loan for short term repayment, then the interest rate on the loan is low. Tamilnad Mercantile car loan offers a low interest rates but if the tenure of the car loan is higher than 36 months or 3 years then the interest rate applicable is 0.25% higher than the normal. Low interest rate on short term car loans indicates minimised risk involved with that particular loan applicant.

Down Payment

The amount of down payment also decides a lot on interest rate. As the percentage of amount borrowed is reduced, the interest to be paid in EMIs is also reduced. The higher the down payment, more are the chances for a favourable interest rate on the car loan. Down payment indicates the repayment capability of the person and therefore minimizes the risk involved.

Age of the borrower

Age of the borrower also plays an important role in increasing your chances of getting a favourable car loan interest rate from Tamilnad Mercantile Bank. If the borrower falls within the upper half of the age criteria set by the bank entitled for the car loan, then he/she can negotiate with the bank for the required interest rate based on the amount of loan required and the tenure of the loan. The risk factor involved with the people of higher age is in terms of repayment capacity, income stability, health risks etc. Bank or other financial institutions may offer the car loan to the older age group as well, but the rate of interest involved is high.

Income of the borrower-

The Tamilnad Mercantile Bank also scrutinizes the salary or income of the borrower. The monthly income of the borrower and the time he has spent in the current organization projects the credit worthiness and the repayment capacity of the borrower. The cash (credit/debit) outflow of the borrower indicates his capacity of his/her repayments which can be a deciding factor for the bank to analyze the person’s credibility.

Car Version/Model-

The model of the car chosen by the borrower also affects the car loan interest rate provided by the bank. The model of the vehicle is taken into consideration while making this decision on interest rate. The resale value of the car is also evaluated for calculating the interest rate. This is done to prevent any situation with loan defaulters. In such cases, the bank seizes the car and sells it to recover the loan amount.

Tamilnad Mercantile Bank Car Loan FAQs

1. I wish to apply for the car loan through Tamilnad Mercantile Bank. Can I negotiate the interest rates?

Yes, you can negotiate on the interest rates as these are not fixed. The interest rates can be negotiated. For the loyal customers of the bank, who make regular payments for previous loan(s), banks revise the interest rates.

2. Can I as a customer select the type of interest rate?

Banks offer two types of interest rates which are fixed and floating. You as a customer, have the flexibility to select the bank that offers you the type of interest rate you require.

3. Can I select the loan tenure for my car loan?

The typical car loan tenure for Tamilnad Mercantile Bank ranges from 1-5 year. A borrower can opt for a lower tenure if they can pay a higher EMI or a higher tenure loan if they cannot afford higher EMI. The Tamilnad Mercantile Bank offers loan tenure upto 5 years.

4. Can my car loan application be rejected for some reason?

Bad credit score can get your application rejected and this might also happen if you have applied for loans multiple times, defaulted EMI payments etc. However, if you have applied for the loan application for the first time, then the factors like income, organizations etc are considered.

5. Can I pay EMIs online? How will the pre-payments be charged?

Yes, EMIs can be paid online. Estimated monthly instalments are payable through post-dated cheques or ECS (Electronic clearing system). Part payments are not allowed in car loans; however, you can make the pre-payment on the entire loan after 6 months to 1 year. But you must check with the bank on this rule.

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