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CreditMantri Finserve Private Limited Unit No. B2, No 769, Phase-1, Lower Ground Floor, Spencer Plaza, Anna Salai, Chennai - 600002
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Buying a car is no longer a far-fetched dream. Often, individuals would save every penny of their earnings to buy their dream vehicle. Car, in earlier times was also considered a luxury. Now a days it has become a necessity in a time when the commute time and distance have increased manifold.
Car finance is an arrangement, where a financial institution extends fund upfront to enable purchase of car. The amount of money that the lender gives to the dealer is called loan to value (LTV) and is usually capped to about 80% of the total value of the car. The rest of the 20% needs to be borne by the customer. The borrower would pay back this loan in monthly installments called as EMI (Equated monthly installments). The EMI would constitute both principal and interest. The repayment would happen over a pre-determined tenure, typically not exceeding 5-7 years. The tenure would depend on the quantum of loan, ability of borrower to repay the loan.
ICICI Bank provides car loans to varied individuals based on their eligibility criteria. Approval rates are higher once you can establish the eligibility criteria prescribed by the lender.
| Feature | Salaried | Self-employed | Partnership | Private Ltd. / Public company |
|---|---|---|---|---|
| Age | 25 – 58 years | 25 – 58 years | Limited companies should have been in existence for at least 3 years. | |
| Income | Gross annual income of at least Rs. 2.50 lakhs. | Gross annual income of at least Rs. 2.00 lakhs. | Firm should have a minimum PAT (profit after tax) of Rs. 2.00 lakhs. | Minimum PAT (profit after tax) of Rs. 2.00 lakhs. |
| Stability of income | The total employment stability should be more than 2 years and current employment stability of minimum 1 year. | Business stability should be more than 3 years. | Business stability should be more than 3 years. | Business stability should be more than 3 years. |
These factors affect car loan eligibility to a great extent –
Credit score – This is one of the most critical aspects for car loan eligibility. Higher credit score enables the applicant to negotiate a lower interest rate. Most banks prefer a credit score of 750 and above. Also, a credit score of lower than 600 is not preferred by most banks. Lower credit score could potentially lead to loan rejection.
Age – The age criteria for salaried and self-employed individuals is between 25 – 58 years, the lower the age, the lower is the risk for the bank. Also, the term can be elongated to the maximum of 4 years for applicants with lower age.
Income level – The income level of the applicant is critical for car loan eligibility in ICICI Bank. If the applicant is of a higher income level, the bank runs lower risk of default and hence, is more willing to provide car loan at favorable terms.
Stability of income – This is one of the criteria which is explicitly mentioned in the official website of the bank under the eligibility criteria. There is a need for continued employment of salaried applicant and business continuity in case of self-employed, partnership firm and private or public limited company.
Existing loan liability – While this is considered in calculation of credit score, it may be considered as an individual component to ascertain if the total loan liability is well within the repayment capacity of the individual. This is another factor which will affect the eligibility of car loan.
ICICI Bank extends car loan for new cars and used cars. The loans are extended up to 100% of loan-to-value of on-road price of the car, with attractive interest rates and tenure of up to 7 years.
New car loan features:Refinance refers to granting loan on an existing car is not hypothecated to any bank / financial institution or is hypothecated but with nil outstanding. Max refinance is up to 140% of car valuation.
Refinance features:| Description of Charges | Charges Amount | ||
|---|---|---|---|
| New Car | Used Car | ||
| Gross Loan Amt | Processing Fee Amt | Processing Fee Amt | |
| Non Refundable Loan Processing Fees | <2.5 Lakh | ₹ 3,500 | 2% of loan amount or ₹15,000 whichever is lower |
| 2.5 Lakh to 3.99 Lakh | ₹ 5,000 | ||
| 4 Lakh to 4.99 Lakh | ₹ 6,000 | ||
| 5 Lakh to 9.99 Lakh | ₹ 7000 | ||
| >10 Lakh | ₹ 8500 | ||
| Documentation Charges | ₹ 250 | ||
| CIBIL Report Charges | ₹ 50 | ||
| Registration Certificate Collection Charges | ₹ 350 | ||
| Stamp Duty | Actuals | ||
| Prepayment Charges | 5% on principal outstanding or interest outstanding for unexpired period of loan (whichever is lower) | ||
| Charges for late payment of loans | 2% per month on the outstanding installment | ||
| Swap Charges | ₹ 500 per transaction | ||
| Bounce Charges | ₹ 500 per transaction | ||
| Amortisation Schedule Charges | ₹ 500 per schedule | ||
| Statement of Account Charges | ₹ 200 per statement | ||
| Prepayment Statement Charges | ₹ 200 per statement | ||
| Duplicate No Objection Certificate (NOC)/No Due Certificate (NDC) Charges | ₹ 500 per NOC/NDC | ||
| NOC for conversion from Petrol to LPG/CNG | ₹ 500 per NOC | ||
| Revalidation of NOC Charges | ₹ 500 per NOC | ||
| NOC to convert from Private to Commercial & Commercial to Private Registration | ₹ 2,000 per NOC | ||
| Loan Cancellation Charges | ₹ 3,000 per NOC | ||
| Legal, Repossession and Incidental Charges. (Incidental Charges are those expenses that are not budgeted or specified, but are incurred by the bank on behalf of the customer). | At actuals | ||
The bank’s official website has a car loan eligibility calculator, this provides an indication on the EMI burden that must be borne for the quantum of loan borrowed. The minimum loan that can be availed by the applicant is Rs. 1 Lakh, the interest rates are competent. The interest rates can be a minimum of 8.4% p.a. The maximum tenure for which the loan can be availed is 84 months or 7 years. The loan is extended for a variety of cars manufactured, marketed and distributed in India. Pre-approved and pre-qualified car loans are extended for existing customers.
Range of Interest rates for Car Loans
| Quarter ended on Sept - 2018 | Minimum | Maximum | Mean |
|---|---|---|---|
| New Car Loan | 8.40% | 14.51% | 9.43% |
| Used Car Loan | 10.25% | 17.51% | 14.30% |
While lower credit score, reduces the possibility of availing car loan from ICICI Bank. It is not entirely impossible to improve credit score and re-apply. The individual can consider the following techniques to improve the score –
The documents required for availing car loans from ICICI Bank are as mentioned below –
| Application form |
|---|
| KYC |
| Photographs |
| Identity Proof |
| Address Proof |
| Age Proof |
| Bank Statements |
| Signature Verification |
| Income Proof |
| Latest Salary Slip / Form 16 |
| Income Tax returns of 2 previous financial years along with complete financial/audit report |
| Income Tax Returns of 2 previous financial years |
| Other Documentation |
| Business Stability proof / Ownership proof |
| Employment Stability Proof |
| Partnership deed and Letter signed by all partners authorizing one partner |
1. What is Car Loan eligibility calculator?
A car loan eligibility calculator is an online tool which will help the borrower assess one’s eligibility for car loan from ICICI Bank.
2. What are the eligibility criteria of the ICICI Bank car loan?
The eligibility of the ICICI Bank car loan is based on your occupation, income level, age and level of previous debts.
3. Can the borrower avail a car loan if the eligibility criteria is not met?
If the borrower is not eligible for a car loan, then the borrower can improve the chances of being eligible by repaying existing debt, improving credit score or adding co-applicants.
4. Who can apply for car loan from ICICI Bank?
ICICI Bank car loan can be applied by –
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