Corporation Bank Car Loan Interest Rates

Corporation Bank Car Loan Interest Rates 2018

How to Calculate Interest Rate on my Corporation Bank Car Loan

With the flexibility of paying back your car loan in the form of Equated Monthly Installments (EMIs), customers can easily own a car without having to bear the brunt of a lump sum expense. By paying nominal rates of interest for a loan tenure of your choice, you can own your dream car.

If you wish to know how EMI on your car loan is calculated, the formula that is used to derive it is as follows:

EMI (E) = [P x r x (1+r) ^n]/ [(1+r) ^n-1]

Here,

P stands for the principal or the loan quantum,

R is the rate of interest applicable per month [Therefore, for an annual interest rate of 10.20%, the rate of interest will be 10.20/ (12 x 100)],

N is the number of monthly instalments made/ no. of months taken for car loan repayment.

Factors Affecting Corporation Bank Car Loan Interest Rates

• Third-party Guarantee – The spouse / or may other individual can stand as guarantor to the car loan taken by an applicant. If the guarantor has a substantial income to back their status and creditworthiness, the applicant can get the auto loan easily approved as well as bargain for a lower car loan interest rate.
• Tenure of the loan – If the borrower chooses a longer tenure for repayment of his/her car loan it might make the bank levy a higher interest rate on the loan. This is because the bank considers this as a higher risk factor for defaulting on loan repayment. In order to balance this risk the bank might increase the interest rate charged on the car loan. On the other hand, if you opt for a lower loan tenure, this assures the bank of faster repayment so you can expect a lower interest rate.
• Income- Applicants who earn an income falling within the income eligibility criteria, especially with a higher income and lower debt outflow, are deemed more creditworthy by Banks. In this situation, the applicant can negotiate with the Bank for a lower rate of interest.
• Down payment – The percentage of loan margin or down payment that is paid by the borrower out of his own savings also has an ancillary influence on the borrower’s car loan interest rate. This is inversely proportional since the higher the down payment the lower is your interest rate on the car loan.
• CIBIL Score – CIBIL score is one of the most popular credit rating measures undertaken by banks. This score which reflect the credit history of an individual, is generated on the basis of the Credit Information Report. If the CIBIL score of an applicant is high, he/she is considered more creditworthy. Therefore, the chances of getting the car loan approved is very high. This will also influence the bank to lower the rate of interest that is applicable on the loan quantum of your choice.
• Bank’s Existing Customers – Existing customers of Corporation Bank will have better chances of availing an advantageous car loan package for themselves. Corporation Bank offers various car loan offers for established customers of the Bank at lower rates of interest. For example, those who have term deposits in Corporation Bank have a better chance of availing a car loan faster, at favorable rates of interest.

Key Pointers on Corporation Bank Car Loan Interest Rates

• Third Party Guarantee: Along with the applicant, the spouse / or may other individual who the Bank considers acceptable, can vouch for the applicant as a guarantor to the loan.
• The Bank includes the cost of Registration, Accessories, Insurance charges and Road tax while calculating the overall cost for new vehicles.
• Floating rate of interest fluctuates periodically since it is linked to the Base Rate
• Current applicable Base Rate is 9.40%
• Loan amount up to Rs. 50 lakhs interest is based on Base Rate + 0.55% = 9.95%
• Loan Amount above Rs. 50 lakhs, interest is based on Base Rate + 1.05% = 10.45%