Bank of India (BOI) Car Loan Interest Rates
Car Loan Interest rates vary with each bank and are dependent on a number of factors. Banks and financial institutions offer competitive interest rates so as to coerce prospective applicants into availing a loan from them. Loan tenures are another main concern for applicants. Bank of India offers a loan tenure of up to seven years for the purchase of four wheelers. However, if the four-wheeler is being purchased by a corporate or a firm then a maximum loan repayment tenure of five years is applicable. Bank of India offers loans for all types of cars be it hatchbacks or S.U.Vs or any other kind. The current rate of interest applicable is 1 Year MCLR +0.60%.
Bank of India Car Loan Interest Rates Table
| MCLR | 8.30% |
| Rate of Interest | 8.90% |
| Processing Fee | Rs. 500 |
| Loan Tenure | A maximum of 7 years |
| Margin | A maximum of 25% |
| Maximum limit for finance | A maximum of Rs.200 lakhs depending on whether the make and model is Indian or foreign and if the borrower is an individual or a corporate entity |
How to calculate the interest rate on the Bank of India Car Loan
Customers who have borrowed loans from Bank of India in order to purchase a vehicle can repay the same via Equated Monthly Installments or EMIs. EMI includes both the principal amount along with the interest amount. There is an increase in the principal amount and a reduction in the amount of interest to be paid as the loan tenure progresses.
The formula for calculating the EMI on a car loan is –
E = P*r*[(1+r)^n/((1+r)^n-1)]
Where E is the Monthly EMI, P is the principal amount, r is the rate of interest per month, n is the number of years.
Factors affecting Bank of India Car Loan Interest Rates
There are numerous factors that have an impact on the interest rates for a Bank of India car loan. These in turn help determine the loan amount that is offered to the prospective applicant, along with the amount that is decided as the EMI to be paid. Some of these factors are given below.
- Amount of down payment – The amount paid as down payment is a significant factor in determining the loan amount and interest rates. Higher the amount paid, lower will be the amount to be given by the bank or financial institution. Hence customers who pay higher down payments are perceived to be less risky by the bank and therefore stand a greater chance of availing loans at better interest rates.
- Income – Annual income of the applicant is seen as important by banks and financial institutions. Most of these institutions have a minimum annual income that is necessary for customers to have in order to avail a car loan and this minimum amount varies based on whether the customer is salaried or self-employed among other factors.
- CIBIL Score – CIBIL scores are highly significant and applicants with higher scores have a greater chance of availing loans at good interest rates. Those with scores above 750 are seen to have a greater chance of repaying the loans on time and hence can procure loans more easily.
- Tenure – Loan tenures for car loans vary with each bank and financial institution. The amount of interest and EMI varies with the tenure. The longer the tenure, higher will be the interest rate to be paid therefore most choose a shorter tenure so as to reduce the overall interest amount that is to be paid.
- A relationship with the bank is also significant. Bank of India has various offers and benefits for customers who have a previous working relationship with the bank.
