IDBI Bank Car Loan Interest Rates

IDBI Bank provides vehicle loans or Auto Loans for purchase of new four wheelers and two wheelers. The highlights of the car loans of the bank are tabled below.

Factors that affect the interest rates on auto loans at IDBI Bank

The interest rates on any loan product are affected due to many external and internal factors. Such factors increase or reduce the interest rate that is levied on the auto loans offered by the Bank.

Some of such factors are discussed below.

• IDBI Bank charges floating rate of interest on Auto loans. These rates are generally lower than the fixed rate of interest and hence make it an attractive option
• The credit score of the applicant is reviewed to determine the rate of interest on auto loan. A person with a higher credit score will have a reduced rate of interest as compared to the other way round. Also non- individual borrowers are charged a flat rate of 8.10% by IDBI Bank.
• A good repayment capacity will also benefit the borrower with a lower or reduced rate of interest as it will ensure the Bank that such borrower is of lower risk to the Bank.
• A reduced or a shorter tenure will also reduce the rate of interest as the risk of non-repayment of loan is reduced as compared to a longer tenure.
• Inflation is also crucial in determining the rate of interest on any loan product. A higher inflation rate will result in a higher rate of interest. Floating rates are directly affected by the change in inflation.

Closer Look at the Features of Car Loan from IDBI Bank

The above highlights of the car loans of IDBI Bank can be discussed in depth hereunder.

Quantum of Loan to be provided

IDBI Bank aims to provide a maximum amount of loan to the borrowers for the purpose of purchasing a vehicle for personal use. The bank does not put any upper limit on the amount of loan to be sanctioned. The quantum of loan to be disbursed will depend on the repayment capacity of the applicant.

Rate of Interest

The rate of interest on auto loans of IDBI Bank is based on the floating rates of interest. These rates are dependent on the credit score of the applicant as well as on the type of the borrower. The current applicable interest rates for the auto loans of IDBI Bank are tabled below.

Tenure

The tenure or the repayment period of the loans provided by the Bank is a maximum period of 7 years i.e. 84 months. Borrowers repay the auto loan taken from the Bank in equal monthly installments which are made up of the interest component as well as the principal amount.

Foreclosure Charges

The bank permits the borrowers to repay the loan in full before the completion of the tenure. This is known as foreclosure of the loan. IDBI bank levies a nominal charge on such foreclosure in case the borrower is a non-individual and the foreclosure is before completion of 6 months from the date of sanction of loan. The applicable charge in such cases is 1% of the outstanding amount (excluding applicable taxes). If such foreclosure is done after the completion of 6 months, there will be no additional charge levied on the non-individual borrower. In case of individual borrowers, there is no such condition of time limit. The Bank does not levy any charge on foreclosure of loans taken by individual borrowers irrespective of the period from the issue of loan.

Part Payment Charges

Like foreclosure, the bank also permits the borrowers to prepay the loan taken in parts higher than the EMIs. There are many conditions to be adhered to by the borrowers in respect of such part payment of loans and such part payment is also subject to a nominal charge in case of non-individual borrowers. Non-Individual Borrowers have to pay 1% of the outstanding loan amount as part payment charges and such charges are excluding the applicable taxes.

The conditions that have to be taken care of while making the part payment are,

• Minimum payment that can be made is Rs. 25,000
• Maximum number of payments that can be made during a year is 3
• Maximum part payment allowed at any time is 10% of the outstanding amount.
• Minimum interval between any part payment during a year is 90 days.

Processing Charges

IDBI bank levies a nominal charge on every loan processed. The minimum amount charged as processing fees by the bank is Rs. 1,500. The processing fees are collected by the bank at the time of sanction of loan.

Penalty Charges

IDBI Bank also charges a penalty on borrowers that have defaulted in the timely payment of the EMIs (Equated Monthly Installments). This penalty charge is levied at the rate of 2% per annum on the overdue amount and overdue period.

What is an EMI Calculator?

IDBI bank has an EMI calculator on its website that can be used by the potential borrowers to calculate the estimated EMI expense that is payable by such borrower each month. Borrowers can find the link to such EMI calculator below,

Home>>Personal>>Calculator>>Auto Loan EMI Calculator

The information required to calculate the estimated EMI are mentioned hereunder,

• Loan Amount
• Rate of Interest
• Tenure/ Loan Term

After providing the above details, the applicant has to click on ‘calculate’ and they will get the EMI payable amount displayed on their screen. This feature can be used multiple times by clicking on ‘clear’ to get the best suited combination of loan term, interest rate and loan amount that is feasible for the potential borrower.

This feature will help the potential borrower to get a fair idea of the EMI to be paid by the borrower at various interest rates.

FAQS – IDBI Bank - Car Loan Interest Rates