The interest rate applicable on a car loan by IOB is the 1 yr MCLR of 10.05% on a monthly reducing balance.
The various applicable Indian Overseas car loan interest rates are as follows:
- Processing fee for Indian Overseas Bank car loan is based on the total loan amount:
- Up to an amount of Rs. 25000 – NIL
- For an amount from Rs. 25000 to Rs. 200000 – Rs. 525
- For an amount above Rs. 200000 – Rs. 395 per lakh (or part thereof)
- Loan Tenure – 1 to 7 years
Factors that affect an Indian Overseas Bank car loan interest rates
- Credit Score and History: rather self-explanatory, the credit score and the history of a person are a reflection of their repayment habits. Indian Overseas Bank car loan rates are affected by the CIBIL score of an individual, as this score helps the bank classify the risk factor in lending money to the applicant.
- Down payment: The down payment affects the loan- to- value rate, or the LTV. The higher the down payment, the lower will be the Indian Overseas car loan rate that is offered to an individual. The minimum down payment that is recommended is around 20 % to 25 % of the total car value. Banks generally believe that the more of your car you own, the less likely you will be to default on a loan.
- Car condition: Owing to a fact that applicants taking car loans on new cars are considered to be less of a risk, the Indian Overseas Bank interest rate on a new car is generally lower than the Indian Overseas Bank car loan rates offered on an old car.
- Loan tenure: It is a well-known fact that when the tenure for a car loan is for a shorter period, it will attract lower interest rates than loans that are to be repaid over longer loan periods.
- Expenses: Expenses, in this regard, encompass any debt that an applicant is already obligated to pay. This includes any other EMIs that the applicant might already be paying, as well as any outstanding dues. The ratio of an individual’s expenses and their gross income plays a major role in the Indian Overseas Bank car loan interest rate. Therefore, especially in the approval process, the applicant should be able to demonstrate a high disposable income, in relation to the total monthly income.
- The income: It is a general advice that people should not opt for a monthly payment that is more than 25 % of their gross monthly income. Banks, before considering an applicant as eligible for a car loan, consider their EMI to income ratio, and it also tends to play its own part in the overall interest rate that is offered.
- Employment length: As the person’s source of income relates directly to their repayment capacity, the time that they have been employed with their current organization also affects the interest rates that are offered to an applicant. In case of self-employed individuals, the time that they have spent in the same business field is taken into consideration.
- Relationship with the bank: The applicant’s past dealing with the bank can also help in affecting the rates that are offered to you. If the applicant already has an Indian Overseas Bank bank account, they can avail better deals on car loans, whether it is an Indian Overseas Bank loan for a new car, or a used car loan.