IDBI Bank Car Loan Eligibility

Advantages of availing car loan from IDBI Bank

There are many key benefits that can be derived from availing a car loan from IDBI Bank, some of the key benefits are as mentioned below -

• Maximum Funding: IDBI Bank gives higher amount of money to buy your dream Vehicle. Maximum loan to value amount offered by IDBI Bank is up to 90% ex-showroom price
• Borrower age should be between 18 years to maximum 70 years
• Wide coverage on vehicles: Auto loan covers wide range of cars, SUVs and high-end bikes
• EMI on reducing balance: Repayment with easy EMIs and avail the loan for up to 7 years, the minimum tenure offered by IDBI Bank is 2 years
• Attractive Interest rates: To ensure a smooth ride, Auto loans offer attractive rate of interest
• Tie-ups with Dealers and Manufacturers: Have tie-ups with dealers and Manufactures of vehicles and make sure to get the best deal

Eligibility Criteria for a car loan from IDBI Bank

IDBI Bank offers Auto loans for both salaried and self-employed professionals at attractive interest rates. It has some very basic criteria for extending car loan, the eligibility criteria are as mentioned below –

Factors affecting eligibility criteria for car loan from IDBI Bank

These factors affect the eligibility criteria for availing car loan from IDBI Bank –

Credibility – Credibility of the applicant is established using the credit score. Higher the credit score, better is the position of the applicant to negotiate a favorable interest rate. Typically, banks lend to individuals with a minimum of 600 credit score and a score above 750 is considered a decent score. Applicant with low credit score runs the risk of loan application rejection which could potentially lead to lower credit score.

Age factor – This is one of the basic criteria for eligibility of car loan. Loan is extended to individuals in the age range of 18 – 70 years. A younger applicant will be able to elongate the loan tenure, thereby reducing the EMI outlay on a monthly basis. This potentially reduces the possibility of default and consequently the risk for the bank.

Income level – The income level is another critical factor. Higher income level potentially increases the chances of favorable terms. The bank perceives higher income level as a sign for reduced risk of default.

Existing debt – If the existing debt is high, then the repayment ability of the applicant becomes lower. Thus, reducing the credit score as well. While this aspect reflects in the credit score, it may still be considered as an individual element to assess the repayment capacity of the applicant.

Stability of income - The bank expects continued employment in the case of salaried applicant and continued business income or income in the case of self-employed business person or professional. The better the visibility of income (longer tenure of earnings) increases the chances of loan sanction from IDBI Bank.

How can a borrower improve credit score to improve chances of car loan eligibility?

An applicant who has a low credit score can use these techniques to improve chances of car loan eligibility. The applicant can re-apply after improving the credit score which will increase the chances of loan approval and sanction.

• Repay existing debt to improve repayment capacity of car loan
• Make prompt payment of credit card dues
• Surrender credit cards, thereby reducing the number of credit cards
• Co-apply for car loan with a close relative who has a better credit score

By taking these steps, the individual will also make an attempt to manage debt better. Keeping the outstanding balance in revolving debt minimal will help improve credit score drastically.

Documentation required to avail a car loan from IDBI Bank

The representative from IDBI Bank would guide the aspirant with the entire paper work. There are a set of documents required to be submitted alongside auto loan and photo of the prospective borrower. The list of documents required for Auto loan are as mentioned below –

Foreclosure charges applicable on Auto loans from IDBI Bank

• Part payment/Foreclosure allowed after 6 months of loan disbursement from own source without penalty.
• Within 6 months of disbursement or by way of balance transfer 1% of balance outstanding plus applicable charges would be charged

How to apply for a car loan from IDBI Bank?

Auto loans can be availed from the nearest bank branch or one can fill the form online to check for eligibility. The aspirant can call on the customer care number and a bank representative will get in touch with the potential customer to guide them through the process.

Car loans eligibility calculator

The IDBI Bank official website has an eligibility calculator for car loans. The calculator seeks some basic details like first name, last name, mobile number, date of birth, make & model of car, on-road car price, type of employment etc., based on which the loan eligibility is determined. The lowest car loan interest rate currently offered by IDBI Bank is 9%, for which the EMI per Rs. 1 Lakh loan amount comes to Rs. 4,555 for a 2 year loan and Rs. 2,061 for a 5 year loan. Car loan EMI in IDBI Bank depends upon loan amount, repayment tenure and interest rate.

Frequently asked questions: IDBI Bank Car Loan Eligibility

1. Who can apply for auto loans from IDBI Bank?

Auto loans are extended for both salaried and self- employed professionals by IDBI Bank.

2. What is Multiplier based loan amount eligibility?

IDBI Bank calculates loan amount eligibility by applying a multiplier to net take home salary. This is the simplest method for calculating a loan eligibility used by banks. Generally, it is 2.5 to 3 times the annual salary for salaried individuals and 6 times the annual income for self-employed professionals. The multiplier depends on the bank’s internal categorization of the employer company based on its reputation, stability, size and growth in turnover.

3. What is FOIR based loan amount eligibility?

IDBI Bank will estimate Fixed Obligation to Income Ratio (FOIR) to ascertain the maximum EMI the aspirant borrower can service based on the current income and other monthly expenses. The bank applies a certain ratio to the income to estimate monthly expenses and then adds other EMI obligations to calculate the total fixed obligations. The proportion of fixed income to calculated fixed obligations gives the FOIR. Generally, banks lend up to a maximum FOIR of 0.50. Based on the FOIR, the bank will also estimate the maximum amount of EMI the borrower can service. IDBI Bank's assessment may be different from self-assessment of the potential borrower. Any differences in assessment may require the aspirant to readjust the loan amount requirement.