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Introduction

The Indian banking sector has grown tremendously over the last few days. Today, the country is home to numerous public and private sector banks. These banks have a huge customer base not only within the country but even overseas. The Union Bank of India is a public sector bank in India and provides car loans among its many other loan services. These car loans of the bank are known as Union Miles. The details of the car loans of the bank are mentioned below.

Key Features of Union Bank of India Car Loans

Union Bank Of India Car Loan Interest Rates

Union Miles is the car loan from Union Bank of India. The car loan can be availed for purchasing new cars or used cars for personal use. The precondition for getting a car loan to purchase used cars is that the vehicle cannot be older than 3 years.

The key features for getting a Union Miles loan are mentioned below.

Particulars

Details

Maximum Amount of Loan

For new cars

  • No Upper Limit

For Used cars

  • Rs. 20,00,000

Rate of Interest

For New Cars

  • 7.40% - 7.50%

For Used Cars

  • 10.40% - 10.50%

Tenure

For New Cars

  • Maximum 84 months (7 years)

For Used Cars

  • Maximum 60 months (5 years)

Primary Security

Hypothecation of the vehicle to be purchased out of loan 

Guarantee

  • For Individuals – No Guarantee if credit score is good
  • For NRI – Local resident Indian
  • Other cases – Partners/Directors/Promoters

Processing Charges

Rs. 1,000

Margin

For New Cars

  • 15% of on-road price

For Used Cars

  • 40% of on-road price

Prepayment Charges

NIL in case loan paid through own funds

Factors affecting the interest rate of a car loan at Union Bank of India

The factors affecting the interest rate of car loan are,

  • Repayment period of the vehicle
  • Type of the vehicle to be purchased out of loan
  • Type of interest rate levied whether fixed rate or floating rate
  • Inflation in the country
  • Demand for vehicles in the market
  • Loan amount required by the borrower
  • Category of the borrower whether an individual or a non-individual
  • Credit history of the applicant
  • Repayment capacity of the applicant
  • Relationship of the applicant with the lender

Let’s take a closer look at the key features of the car loan from Union Bank of India.

Quantum of Loan

Union Bank of India provides car finance to the tune of up to 85% of the value of the vehicle in case of new cars and 60% of the value of the vehicle in case of used cars. The bank has not set any minimum amount of loan that can be sanctioned to the borrower. The maximum amount of loan that can be sanctioned by the bank for new cars or used cars is tabled below.

Type of vehicle

Maximum Amount of Loan

New car

Need based. (No upper Limit)

Used cars

Rs. 20,00,000

Rate of Interest

Union Bank of India Car Loans interest rates are based on the credit score of the applicant. A person having a credit score higher than 700 will get a reduced rate of interest as compared to a person having a credit score lower than 700. The floating rates are based on the REPO Rates and differ in case of loans for purchase of new cars or second hand cars. The current applicable rates levied by the Bank for its Car loans are tabled below.

Type of vehicle

Rate of Interest (Floating rates)

New Cars

7.40% - 7.50%

Used Cars

10.40% - 10.50%

Further details of the applicable rates can be available by contacting the bank through its nearest branch or through the customer care service of the bank.

Tenure

The repayment period of car loan of the bank depends on the type of vehicle to be purchased out of loan funds. The maximum period of repayment in case of new cars is 7 years (84 monthly EMIs) whereas in case of used cars it is 5 years (60 monthly EMIs).

There is no minimum tenure for repayment of car loans set by the bank. Customers can select the tenure for the loans based on their discretion and their repaying capacity.

Margin

Margin money is the amount or portion of the value of the car that has to be paid by the borrower from their own funds. This is a mandatory requirement of Union Bank of India Car Loan and is specified as a percentage of the value of the car. The quantum of margin money to be provided in case of purchase of new cars as well as used cars as per the guidelines of the Bank for its car loans is tabled below.

Type of Loan

Margin Money

New Cars

15of the on road price of the car

Used Cars

40% of the on road price of the car

Furthermore, the bank states that customers that have their salary account with the bank can have a concession of 5% in the margin money to be paid for loan taken to purchase a new car. The concession is not applicable for loans to purchase used cars.

Security

The primary security of the loan provided by the bank is the vehicle purchased out of loan. Bank has the hypothecation charge on such vehicles which has to be duly registered with the RTO.

The Bank requires additional security in the form of guarantee for its loans apart from the primary security mentioned above.

Such guarantee requirement is based on the category of the borrower. The details of the same are mentioned below

Category of Borrowers

Guarantee 

Individuals

No Guarantee if credit score is good (700 or above)

NRI

Local resident Indian having resources equal to the loan amount

Partnership Firm

All Partners

Company

Directors/Promoters

Processing fees

Union Bank of India levies Rs. 1,000 as processing fees. These charges are levied at the time of sanction of loan. These are levied irrespective of the class of applicants

Part payment or Foreclosure Charges

Union Bank of India does not levy any prepayment charge in case of loan is repaid by the borrower of their own funds. In case the loan is taken over by another bank, the details of the applicable charges can be obtained by contacting the bank either through their branch or through the customer care service.

What are the eligibility requirements for Union Bank of India Car Loans?

The car loan of the Union Bank of India can be applied by any resident of the country or by a Non-Resident Indian (NRI).

The purpose of purchasing the vehicle has to be for personal use.

The age criterion for such persons is

  • Minimum age – 18 years
  • Maximum age – 75 years

The loan can be jointly availed by a person and the eligible family members. The eligible members for this purpose are,

  • Father
  • Mother
  • Son
  • Spouse
  • Daughter (unmarried)

The bank also allows the Companies / Firms to apply for the loans for the use of their Director or any employee.

The Bank does not specify any income criterion for eligibility but a person with unsound repayment capacity will not be eligible for the loan.

What are the documents needed for Union Bank of India Car Loans?

The documents needed for Union Bank of India car loans are basic KYC documents and vehicle related documents along with documents relating to the income proof of the applicant. These documents have to be submitted along with the application to complete it.

Identity Proof and Signature Proof

The identity proof of the applicant and co-applicant has to be provided in the form of any of the following documents

Address Proof

The address proof can be provided through any of the following documents

  • Aadhaar Card
  • PAN Card
  • Passport
  • Driving License
  • Latest Utility Bills
  • Registered Rent Agreement/ Sale Deed/ Lease Agreement

Loan Application Form

Duly filled and signed application form has to be signed by all the applicants (in case of more than one applicant)

Photographs

The applicant will have to provide three recent passport photographs of the applicant as well as co-applicants (if any)

Income Proof

  • For salaried class 
  • Last one year ITR
  • Form16 / letter from Employer
  • Last 6 months salary slip
  • For business class 
  • Last three years ITR
  • P & L, Balance sheet

Car related documents

  • Proforma /  Invoice
  • Valuation report from approved automobile engineer for old vehicle

FAQs – Union Bank of India - Car Loan Interest Rates

1. What is the application process for car loans of the bank?

Applicant can apply for the car loan of the bank by physically visiting the bank or by contacting the bank through its branch or by contacting the phone banking service of the bank. Applicants can also apply for the loan through the website of the bank through the following link Home>> Products>> Personal >> Car loan >> Vehicle loan>> Online Loan Application

2. What is the minimum age required to be eligible for the car loan of the bank?

The minimum age to be eligible for the car loan of the bank is 18 years.

3. What is the maximum loan available for purchasing new cars under Union Miles?

The bank does not put any upper limit on the maximum amount that can be allowed as a loan to a borrower. The bank will provide 85% of the value of the car as a loan for purchase of new cars.

4. What are the interest rates at leading lenders in India for car loans?

The interest rates for cars loans of various lenders are tabled below.

Lender

Rate of Interest

Central Bank of India

Starting from 7.25%

Federal Bank of India

Starting from 8.50%

IDBI Bank

Starting from 7.50%

Karnataka Bank

Starting from 8.49% (8.39% for electric vehicles)

Karur Vysya Bank

Starting from 8.50%

Lakshmi Vilas Bank

Starting from 8.80%

Punjab and Sind Bank 

Starting from 7.10%

Punjab National Bank

Starting from 7.55%

South Indian Bank

Starting from 8.80% 

Tamilnad Mercantile Bank

Starting from 9.70%

Union Bank of India

Starting from 7.40%

SBI

Starting from 7.75%

5. How can a person repay the loan taken under Union Miles?

The loan taken under Union Miles can be repaid through either of the following ways,

  • Standing instruction to the Union Bank of India savings account of the borrower
  • Internet banking facility available on Union Bank of India savings account of the borrower
  • ECS (Debit) facility
  • Post Dated Cheques (PDCs)

6. What is the time taken to process the loan under Union miles?

The bank takes a processing time of 2 days to sanction the loan under Union Miles provided the application and documents are all complete as per the guidelines of the bank.

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