About the Bank
Central Bank of India is a government-owned bank and keeps launching a number of unique and innovative banking activities from time to time. One of the largest commercial banks and the oldest in India, Central Bank is based in Mumbai. Since its inception, the bank has now spread all over India, with numerous extension counters and 4700 branches, present to provide a plethora of services to the people.
Established back in the year 1911, the Central Bank is the first commercial bank to be wholly owned and managed by Indians and is aptly renowned as the first ‘Swadeshi Bank’ of India. Of the number of innovative and unique banking services attributed to the bank, it also has made for itself a prime position among banks that disburse car loans. Well known for the numerous financial services and loans offered to the customers, Central Bank’s car finance plans are considered as one of the best car loans in India, owing to their all-encompassing, affordable, and lucrative features. Customers can avail a Central Bank car loan for a new car, as well as a used car loan, based on their individual needs. The car finance plans by Central Bank can help you in realizing your dream of owning your own car. Central Bank car loans are easy to apply and have a hassle free process.
The comprehensive Central Bank car loans offer customers with the required financial assistance, with the flexibility to select a convenient tenure for a car loan that suits their needs and capabilities. The accumulated interest as well as the principal amount can be paid back in easy monthly car loan payments. Central Bank car loans also offer affordable car loan interest rates to make sure that the loan does not affect the customers’ financial capabilities by much. The Central Bank is also well known for its quick car loan disbursals and easy documentation process.
Features of Central Bank Car Loan
- Car loans offered by Central Bank are available for new as well as pre-used/old cars.
- The car loan from Central Bank can be availed for buying cars for personal use and not for use as passenger vehicles.
- The car loan provided by Central Bank for buying new cars can go up to 90% of the on road price and up to 75% of the market value for second hand/pre-used cars.
- The car loan provided by Central Bank is approved only for the on road price of the car. Costs incurred above this (for accessories, etc.) are not financed by the bank.
- Hypothecation of the vehicle has to be done to Central Bank of India, and registered with Regional Transport Office Authorities.
- The loan margin is as follows
- For new cars
- Loans up to 20 Lakh: 10%
- Loans over 20 Lakh: 20%
- For used cars: 25%
- Maximum loan tenure
- For a new car: 84 months
- For an old car
- Less than 3 years old : 60 months
- Older than 3 years: 48 months
Central Bank car loans have a number of advantages that make it a great choice for people who wish to buy a car. However, there are a number of factors that affect not only an applicant’s eligibility for a car loan, but also their overall car loan amount eligibility. To be considered as eligible for a Central Bank car loan, an applicant must fulfill the following requirements:
- Applicant must be over 18 years of age
- Applicant should have a regular source of income, i.e. they should fall into one of the following categories:
- Self-employed applicants
- Independent entrepreneurs
- Permanent salaried employees
- NRIs can open an account only jointly with a resident of India who is related to the NRI.
- Farmers can also fulfill the Central Bank car loan eligibility criteria. This is irrespective of their land holding or whether they are engaged in agricultural activities in terms of production, or in any other allied activities.
- The vehicle to be bought should be kept in India only
- Applicant should fulfill income requirements
- Salaried Persons: the gross monthly income of applicant should be over Rs.20000
- Self-employed: the gross annual income of the applicant should be over Rs.240000
Factors that can affect the Central Bank car loan eligibility
An applicant’s eligibility for Central Bank car loan can be affected by a lot of factors. These factors about the requirements for Central Bank car loan can affect the eligibility negatively as well as positively and will help the bank decide on a number of features and deals on car loans, like the loan amount, the offered Central Bank car loan interest rate, etc.
- The Central Bank car loan EMI that is applicable on a particular car loan from Central Bank should not exceed 50% of the gross monthly salary of the applicant. If an applicant’s major part of the monthly salary would have to be paid as a car loan EMI, it would undermine the repayment capabilities of the applicant and it would lead to the applicant being considered as a risky investment option by the bank.
- The car loan from Central Bank is capped at 90 % of the car’s ex-showroom price
- The applicant’s eligibility for Central Bank car loan is also affected by the existing EMI responsibilities of the applicant. Any EMIs that the applicant is already paying will of course reduce his useable monthly salary, which, as mentioned earlier, will increase the risk of lending to the applicant.
- The CIBIL score of an applicant is an important factor. But when an applicant will apply for a Central Bank car loan, they will be offering the hypothecation of the purchased vehicle as security to the bank; the credit score will not play an important role in the approval of a Central Bank car loan. However, if the applicant has a clean repayment history and a good CIBIL score, it will only help in quicker approvals as well as speedy processing of the Central Bank car loan. A good score will definitely assist in increasing an applicant’s eligibility.
- A number of factors can assist an applicant in increasing their eligibility for a Central Bank car loan. Including an immediate family member as a co-applicant will cause the two incomes to be clubbed, thereby increasing the eligibility of an application. Another way is to choose a longer repayment tenure in order to avail a lower car loan EMI, which will decrease the risk involved in lending to an applicant.
Check your Central Bank Car Loan Eligibility
There are a number of factors that affect the Central Bank car loan eligibility of an applicant. These are the same factors that can also have an impact on the applicant’s total car loan amount eligibility, as well as the offered Central Bank car loan interest rates. Frankly, a rejected car loan application does well for no one. So, it is always a good idea to check your eligibility for Central Bank car loan before you actually apply for a car loan online. This can help you vet out what your application lacks and work towards improving it.
Calculate your Car Loan at PaisaBazaar.com prior to applying for the car loan to know the criteria that you need to fulfill for a Central Bank car loan.
How it works
- Step 1: Select the type of car you are looking for –Used or New
- Step 2: Enter or select from the drop down menu, the city where you are living
- Step 3: Enter or select from the drop down menu, the make of the car that you wish to buy then select the model and the variant of the car that you wish to buy
- Step 4: Enter the details about when you want to buy the car
- Step 5: Next, select the amount that you wish to borrow as a Central Bank car loan
- Step 6: Select the suitable tenure for a car loan that you wish to apply for
- Step: Select your form of employment. The salaried individuals will need to fill in the name of their employer, while the businessmen and the self-employed professionals will have to select their profession type
- Step 7: Enter gross annual income
- Step 8: Enter the amount of EMI that you are already paying at present
- Step 9: Select the bank that you have a bank account with at present
- Step 10: Finally, enter your personal details, like your name, gender, date of birth, email id, mobile number, etc. and click on ‘View all Offers’ to see the loans that you are eligible for.
- Central Bank Car Loan Interest Rates
Interest for a new car = MCLR + 0.40 %, and MCLR +1.50% for old car where the MCLR = 9.35 %. So, the applicable Central Bank interest rate is:
- For a new car loan: 9.75% floating
- For a used car loan: 10.85% floating
- Processing fee for Central Bank car loan: 0.50% (Minimum amount: Rs. 2000; Maximum amount Rs. 20000)
Irrespective of whether you apply for a Central Bank car loan online, or in person, the applicant will be required to submit certain documents for that will be processed before the approval of the loan. These documents include:
- The Central Bank car loan application form, duly signed and filled
- Passport sized photographs
- Cheque or demand draft for the processing fee.
- Photo identification of the applicant
- Proof of age of the applicant
- Proof of residence of the applicant
- Income proof of the applicant
Income Proof of the applicants includes:
- 3 months’ salary slips, or
- Form 16, or
- Income Tax Returns of the applicant (s)
Self Employed Individuals:
- Income Tax Returns for the last 3 years with computation of income, or
- The CA certified and audited Profit & Loss account and balance sheets for the last 3 years
Things to remember
A Central Bank car loan is a long term financial commitment that a borrower is making with a bank. So irrespective of whether it is a new or a used car loan, an aspiring borrower should look at all the aspects and charges that are involved in a car loan. The following are the main factors that an applicant should be well aware of, before they apply for a Central Bank car loan, to make sure that they make a well informed decision that is beneficial for them in the long run.
- Prepayment Charges
- Interest Rate
- Processing Fees
- Down Payment
- Car loan EMI
The car loan EMI, or the equated monthly installment, for a Central Bank car loan is probably one of the most important factors listed above. Though the lucrative car loan interest rates offered by Central Bank play a big role in choosing the bank, it is the EMI that eventually matters in the long run. It is the EMI that a borrower will have to pay month after month throughout the tenure and it is the amount of that applicable EMI that will decide a customer at the time when they choose and apply for a Central Bank car loan. The EMI of is affected by a number of factors like the total principle amount, the car loan interest rates, whether these rates are fixed or floating, the loan tenure, etc. One of the facts that affect it is ,when you calculate EMI for Central Bank car loans a part of the EMI amount is the principle amount that is being paid back, and a part of the EMI amount is the accumulated interest being paid. This ratio of the principle amount and the interest paid is what keeps changing throughout the loan term. In the beginning the interest makes up a major part of the EMI, and with time the ratio of the interest in the EMI keeps decreasing, and the principal keeps increasing. This is an important factor when it comes to floating car loan interest rates and also while making partial or full prepayments of a Central Bank car loan.
The EMI applicable on your Central Bank car loan may be calculated by using the following formula:
EMI = [P x R x (1 + R) ^ n] / [(1 + R) ^ n - 1]
P = Principal loan amount
R = Car loan interest rates offered
N = Loan tenure, or the number of installments applicable
A lot of calculations and numbers might not seem to you as the best option for finding out your applicable EMI; after all, this method is prone to human error as well. So, an easier way to calculate the applicable EMI is by using a car loan EMI calculator before you apply for a Central bank car loan. The Central bank car loan EMI calculator can assist you in finding out the EMI applicable with the different options. You are required to enter the principle amount, the interest rate, and the loan tenure in the EMI calculator to be provided with the EMI for that particular Central Bank car loan option.
Using the car loan EMI calculator
The amount of money that a user will have to pay as monthly payments for a Central Bank car loan is an important concern for all prospective borrowers. The EMI is what will affect your finances directly, and that is why, before applying for the Central bank car loan, you should use the PaisaBazaar car loan EMI calculator to ensure that you choose a car loan option that is best suited to your needs as well as your financial capabilities. The steps involved in using this calculator are listed as follows:
Using the PaisaBazaar EMI calculator for a Central Bank car loan
Enter the principal amount for the car loan that you wish to borrow from the Bank.
In the next section, you need to put in the interest rate that has been offered to you for availing the car loan.
In the last part, you are will have to enter the loan tenure that you would like to opt for. The loan tenure with Central Bank can vary from 1 year to 7 years for a new car, up to 5 years for a used car not older than 3 years, and up to 4 years for a car older than 3 years.
As the required details are entered, on the right side of the page, the amount payable as EMI for that particular Central Bank car loan will be visible. You can also change any or all the values in the three sections and view the changed EMI immediately.
A car loan is a long term commitment with a financial institution. So before applying for a Central Bank car loan, you should be aware of the basic aspects of this kind of loan.
- The Security
The Central Bank car loan is a secured loan, but it requires no guarantor for availing the loan amount. The security that the bank takes in return for providing financial assistance is the hypothecation of the vehicle that will be purchased with the loan amount.
- The decision should not be based on the EMIs alone
Before choosing a car loan, an applicant should consider all the relevant factors, and not just the EMI. A smaller EMI amount might seem a lucrative option, but do not forget that smaller EMI options also mean longer tenures; and longer tenures just mean a higher interest that has to be paid back. Make sure that you look at the bigger picture and consider all of the relevant factors before choosing a Central Bank car loan.
- ‘Zero Down Payments’ not a long term solution
Not having to pay a down payment when it comes to buying a car seems like one of the best possible options, but not in the long term. The fact is that the total amount for the car will come out of your pocket, whether you pay it right now, or later is again up to you. Not paying a down payment will either increase the amount of the EMIs that you have to pay, or end up as a longer tenure. Also, the interest is calculated on the principle amount, so more money you borrow, more interest you pay.
- Stick to the decided limit
Assess everything with logic. You might at times be tempted to stretch your financial limit because a ‘little extra’ EMI seems hardly a bad solution. But in the long term, the little extra can cause you more financial strain than you bargained for.
- The Shorter Term
A long term ensures low EMIs, but also means more interest paid. So when you apply for a Central Bank car loan, ensure that you choose the shortest term that you can manage.
Applying for the Central Bank car loan
Individuals availing car loan by Central Bank can put in their car loan application in a number of ways.
- You can visit one of the branches of Central Bank and receive the Central Bank car loan details and then proceed to directly apply for the loan.
- Another way to apply for one of the Central Bank plans is by applying for a Central Bank car loan online through the official website.
- Another way to apply is to apply through the PaisaBazaar portal.
- The Central Bank also offers customers with a Central Bank account to avail a pre-approved car loan.
1. What all charges are covered by a Central Bank car loan?
A. Central Bank of India provides car loans for financing the on road price of a car. Any charges that are incurred over the on road price (for accessories, gadgets etc.) are not covered by the loan. The charges that are covered however, include:
- Cost Of vehicle
- Registration Charges
- Road Tax
2. What kind of cars can be financed by a Central Bank of India car loan?
A. Any new or used car can be financed by a Central Bank of India car loan, as long as the bought vehicle is intended for personal use and not as a passenger vehicle. The quantum of finance that is provided for buying a new car is Rs.75 Lakh and Rs. 10 Lakh for second hand/pre-used cars.
3. Can farmers avail a Central Bank car loan?
A. Yes, irrespective of their land holdings or whether they are engaged in any agricultural production, farmers can apply for a Central bank of India car loan.
4. What is the maximum loan tenure for car loans from Central Bank?
A. The maximum tenure for a Central Bank car loan is:
- New Vehicles - 84 months
- Used Vehicles (not older than 3 years) - 60 months
- Used Vehicles (older than 3 years) - 48 months
5. What can one do if their income is less than that is required to be eligible for a Central Bank car loan?
A. If in case your income falls short of the required income bracket, you can also include your spouse as a co-applicant, in that case the eligibility will be based on the clubbed income of both.
6. Who can apply for a Central Bank car loan?
A. Anyone from employed individuals, entrepreneurs, and NRIs to partnership firms, companies, and societies can apply for a car loan from Central Bank, as long as they can show that they have a regular income that fulfills the minimum income requirements.
7. For what purpose can an individual apply for a car loan from Central Bank?
A. An applicant can take a car loan from Central Bank for the purpose of buying new or used cars for personal use. Central Bank, however, does not provide a car loan for buying cars that will be used for hiring purposes or for ferrying passengers.
8. What are the age requirements for applying for a car loan from Central Bank?
A. At the time of applying for a Central Bank car loan, an applicant should be at least 18 years old. The maximum age limit for this type of loan is 65 years of age.
9. What is the minimum income that an applicant should have before applying for a Central Bank car loan?
A. The minimum income requirement for a Central Bank car loan is that an applicant should be earning at least Rs. 240000 per year. This criterion for income is the same for salaried as well as non-salaried applicants.
10. What is the maximum loan amount that an applicant can take as a Central Bank car loan?
A. The maximum amount that an applicant can borrow from Central Bank as a car loan depends on a number of factors like the applicant’s eligibility, the make and model of the car, etc. Depending on these factors, an applicant can take from Central Bank, an amount of up to Rs. 7500000 as a car loan for a new car, and up to Rs. 100000 as a car loan for a used car.
11. Is there a margin applicable on the car loans taken from Central Bank?
A. Yes, there is a margin that is applicable on all loans given by the Central Bank. These loan margins are listed as follows:
- For new cars
- Loans up to 20 Lakh: 10%
- Loans over 20 Lakh: 20%
- For used cars: 25%
12. How can an individual apply for a Central Bank car loan?
A. Individuals wishing to apply for a car loan by Central Bank can put in their car loan application in a number of ways.
- You can visit one of the branches of Central Bank and receive the details about the car loan and then proceed to directly apply for the loan.
- Another way to apply for one of the Central Bank plans is by applying online through the official Central Bank website.
- Another way to apply for a Central Bank car loan online is to apply through the PaisaBazaar portal.
- The Central Bank also offers customers with a Central Bank account to avail a pre-approved car loan.
13. What is the rate of interest applicable on Central Bank car loans?
A. The rate of interest on a Central Bank car loan for a new vehicle is calculated as the MCLR plus 0.40 %, while for used cars it is calculated as MCLR plus 1.50 %. The MCLR at Central Bank is 9.35%. Offered at a floating type interest rate, the interest rate is:
- For a new car: 9.75 %
- For an old car: 10.85 %
14. What are the documentation charges applicable when an individual applies for a car loan by Central Bank?
A. Applicants have to pay a documentation charge if the loan amount that they are applying for is more than Rs. 200000. The applicable charges are as follows:
- If the loan amount is more than Rs. 200000, but less than Rs. 1000000, then the charge applicable will be Rs. 250 per lakh, with a maximum amount of Rs. 2500.
- If the loan amount is more than Rs. 1000000, but less than Rs. 5000000, then the charge applicable will be Rs. 230 per lakh, with a minimum amount of Rs. 2500 and a maximum amount of Rs. 11500
- If the loan amount is more than Rs. 5000000, then the charge applicable will be Rs. 200 per lakh, with a minimum amount of Rs. 11500, and a maximum amount of Rs. 20000
15. What is the hypothecation policy for cars financed by Central Bank?
A. Hypothecation of the vehicle purchased using Central Bank car loan is a mandatory condition of the car loan. The hypothecation charge needs to be registered with the Regional Transport Office authorities.