Indian Overseas Bank (IOB) is a major public sector bank in India headquartered at Chennai, Tamil Nadu. Established in the year 1937, the Bank is known for its wide range of banking and financial services covering the personal, corporate, NRI and agricultural sectors. Indian Overseas Bank offers banking products and services and has about over 3700 domestic branches and more than 3300 ATMs spread all over the country.
The Indian Overseas car loan just happens to be one of the most sought financing products for cars. It comes with attractive benefits like easy loan sanction, competitive interest rates and a long repayment time period.
Features of Indian Overseas Bank car loan
The car loan provided by Indian Overseas Bank is better known as the Pushpaka car loan scheme, and it comes with a number of repayment options including easy payments and other benefits. The Indian Overseas Bank charges lower interest rates than most of its competition. IOB also offers to finance relatively huge portions of the total car cost.
- Get your car financed up to a loan amount of 90% of the cost of a new car and 75% of the market value of a used car.
- For the car loan offered by Indian Overseas Bank, customers can easily pay back the loan amount through EMIs during the long repayment tenure options of up to 7 years
- The repayment tenure is flexible and there are no foreclosure charges for IOB car loan.
- The Indian Overseas Bank requires the car loan applicants to submit a security or collateral with the bank, against which the car loan is provided. In case of a new vehicle, the vehicle needs to be hypothecated to the bank by mentioning the name of Indian Overseas Bank in the vehicle’s registration certificate book.
- A small processing fee is charged with the car loan from Indian Overseas Bank depending on the total loan amount that has been borrowed.
The interest rate applicable on a car loan by IOB is the 1 yr MCLR of 10.05% on a monthly reducing balance.
The various applicable Indian Overseas car loan interest rates are as follows:
- Processing fee for Indian Overseas Bank car loan is based on the total loan amount:
- Up to an amount of Rs. 25000 – NIL
- For an amount from Rs. 25000 to Rs. 200000 – Rs. 525
- For an amount above Rs. 200000 – Rs. 395 per lakh (or part thereof)
- Loan Tenure – 1 to 7 years
Factors that affect an Indian Overseas Bank car loan interest rates
- Credit Score and History: rather self-explanatory, the credit score and the history of a person are a reflection of their repayment habits. Indian Overseas Bank car loan rates are affected by the CIBIL score of an individual, as this score helps the bank classify the risk factor in lending money to the applicant.
- Down payment: The down payment affects the loan- to- value rate, or the LTV. The higher the down payment, the lower will be the Indian Overseas car loan rate that is offered to an individual. The minimum down payment that is recommended is around 20 % to 25 % of the total car value. Banks generally believe that the more of your car you own, the less likely you will be to default on a loan.
- Car condition: Owing to a fact that applicants taking car loans on new cars are considered to be less of a risk, the Indian Overseas Bank interest rate on a new car is generally lower than the Indian Overseas Bank car loan rates offered on an old car.
- Loan tenure: It is a well-known fact that when the tenure for a car loan is for a shorter period, it will attract lower interest rates than loans that are to be repaid over longer loan periods.
- Expenses: Expenses, in this regard, encompass any debt that an applicant is already obligated to pay. This includes any other EMIs that the applicant might already be paying, as well as any outstanding dues. The ratio of an individual’s expenses and their gross income plays a major role in the Indian Overseas Bank car loan interest rate. Therefore, especially in the approval process, the applicant should be able to demonstrate a high disposable income, in relation to the total monthly income.
- The income: It is a general advice that people should not opt for a monthly payment that is more than 25 % of their gross monthly income. Banks, before considering an applicant as eligible for a car loan, consider their EMI to income ratio, and it also tends to play its own part in the overall interest rate that is offered.
- Employment length: As the person’s source of income relates directly to their repayment capacity, the time that they have been employed with their current organization also affects the interest rates that are offered to an applicant. In case of self-employed individuals, the time that they have spent in the same business field is taken into consideration.
- Relationship with the bank: The applicant’s past dealing with the bank can also help in affecting the rates that are offered to you. If the applicant already has an Indian Overseas Bank bank account, they can avail better deals on car loans, whether it is an Indian Overseas Bank loan for a new car, or a used car loan.
To be eligible for an IOB car loan you should be a salaried professional working in a Government Office, Public sector undertaking, Reputed private enterprise Or a self-employed professional. NRIs are also eligible for a car loan provided they render the required guarantee from a Resident Indian. The main criteria for eligibility for Indian Overseas Bank Car Loan are as follows:
- Age criteria: To be eligible for an Indian Overseas Bank car loan, you should fall in the age bracket of 21-65 years of age.
- Income criteria: The applicant must have a regular income source. The total monthly income of the applicant (including that of spouse and other sources) should be not less than Rs.8000.
Factors that can affect the eligibility for an Indian Overseas Bank car loan
There are a number of factors involved that can affect your eligibility for Indian Overseas Bank car loans. These factors include:
- The minimum applicable monthly car loan payments should be less than 50% of your gross monthly salary.
- The car loans from Indian Overseas Bank are capped at 90% of the ex-showroom price
- Eligibility for car loans from Indian Overseas Bank is also affected by whether or not you are already paying any other EMIs
A few simple steps that you can take to ensure higher eligibility include measures like paying off any outstanding credit card bills to ensure a clean credit history, or you can also opt for longer loan tenures when applying for car loans offered by Indian Overseas Bank.
Check your Indian Overseas Car Loan Eligibility
To know in detail about the eligibility criteria in case of a car loan, you can use the Indian Overseas Bank car loan eligibility calculator at PaisaBazaar before you put forth your car loan application. The factors that affect the applicant’s eligibility also happen to affect car loan amount eligibility. An applicant’s income, present expenses, credit history, etc. also affect their car loan amount eligibility (the maximum amount for which their loan can be approved.
The documents for Indian Overseas Bank car loan that you would require for your car loan application before the bank can disburse the car loan are listed as follows:
- The Indian Overseas Bank car loan application form, duly filled and signed by the applicant
- Passport sized photographs of the applicant
- Photo identification of the applicant (PAN card/ Passport/ Driving License/ Aadhar Card/ Voter ID/ Government issued I-card)
- Proof of age of the applicant (PAN card/ Passport/ Driving License/ Voter ID card/ Birth certificate/ Employee ID card (only for PSU/ Government employees)/ School or college leaving certificate)
- Proof of residence of applicant (Passport/ Driving License/ Election ID card/ Utility Bill/ Bank account statement (no older than 3 months))
- Proof that the applicant’s income falls in the required income brackets
- Form 16 for the last 2 years
- Salary slips of the last 6 months
- Bank account statement showing salary credit for the last 6 months
Self Employed Individuals and Working Professionals
- Income Tax Returns for self and for business for the last 3 years
- Profit and loss account reports
- Balance sheets, certified or audited by a CA
- Bank account statements of self and business for the last 12 months
All the other requirements for Indian Overseas car loan are communicated at the time of application.
- Access the menu for “loans” and under that select “Indian Overseas Bank car loans” under the car loans section.
- The Indian Overseas Bank car loan page will open, which will provide you with the information on the loan eligibility, amount eligibility, documents required, as well as the applicable interest rates for an Indian Overseas Bank car loan.
- If required eligibility criteria are met, you can apply for an Indian Overseas Bank car loan through a link on the same page, which will provide you with an immediate e-approval.
- An executive from Indian Overseas Bank will soon get in touch with you to discuss and complete the further procedures that are involved in processing your Indian Overseas car loan application.
1. Can I avail a loan for a used car?
A. Yes, used car loans are available with the Indian Overseas Bank. IOB grants loans for both new and used cars, only the loan amount varies between a new (90% of the cost) and an old car (75% of the market value).
2. What is the repayment tenure for an IOB car loan?
A. Indian Overseas Bank offers loan tenure of up to 7 years or 84 months. For a used car loan, the repayment tenure can be flexible up to a maximum of 84 months.
3. Are there any loan processing charges associated with the car loan?
A. Yes, loan processing charges are associated with an IOB car loan. For loan up to Rs. 2 Lac it is Rs. 134/- to Rs. 168/- and for loan above Rs. 2 Lac it is Rs. 134/- to Rs. 168/- per 1 Lac.
4. I am an NRI. Will I be eligible for an IOB car loan?
A. Yes, a Non Resident Indian is also eligible for an IOB car loan provided he has a suitable guarantee from a Resident Indian acceptable to the Bank.
5. What all documents are required with the car loan application form?
A. The documents required with a car loan application form are:
- Photo ID and Age Proof
- Address Proof
- Income Proof
- Application form, filled and signed, with passport size photographs attached
- Bank statements
- Quotation for the vehicle
6. Can the customers of the Indian Overseas Bank check the status of their car loan through the Bank’s official website?
A. The Indian Overseas Bank car loan status can be easily checked by logging into their bank accounts on the IOB website using their net banking services.
7. Can the customers of the Indian Overseas Bank access their car loan statement online?
A. Yes, the Indian Overseas Bank website has provisions to let their customers access and view their car loan statements online.
8. Who is eligible for a car loan from Indian Overseas Bank?
A. The following are the categories of customers are eligible to apply for a car loan from Indian Overseas Bank
- Permanent employees in government offices
- Permanent employees in public sector undertakings
- Working professionals or self-employed individuals
- Permanent employees of a known private enterprise
- A registered company or firm may also apply for this specific car loan.
9. What are the income requirements when applying for an Indian Overseas Bank car loan?
A. Individuals applying for an Indian Overseas Bank car loan need to ensure that their take home pay exceeds 50% of their gross salary received from their current employer. In other words, after the deduction of insurance and Provident Fund payments, this income should cross the 505 mark of the gross salary of the applicant. Another income criterion that an individual needs to ensure that they meet is that the total monthly income that an applicant receives (along with other sources of income, and a spouse’s income, if applicable) should exceed an amount of Rs. 8000.
10. What is the gamut of financing that is available under an Indian Overseas car loan?
A. If an individual wishes to purchase a new vehicle, IOB offers up to 90 % of the ex-showroom price of a new car. In case the applicant wishes to buy a used car, the Indian Overseas Bank provides loans of not more than 75 % of the car in question’s market value.
11. What has to put up as security or collateral for taking an Indian Overseas car loan?
A. For taking an Indian Overseas Bank loan the applicant needs to provide the following as security, against which the loan will be disbursed:
- Hypothecation of the used or the new car that is bought using the disbursed Indian Overseas Bank car loan.
- The car’s Registration Certificate book will be marked to show the bank’s lien.
- The vehicle that has been purchased needs to be insured for its complete value.
12. What are the details of the applicant’s income and employment that have to be submitted with the application for an Indian Overseas car loan?
A. An applicant has to submit the following information about the employment and the income in the application form along with proofs of the same:
- Net salary of the applicant
- The gross monthly salary of the applicant
- The number of years spent by the applicant in service
- The total number of years of work experience of the applicant
13. What are the income documents that a salaried individual has to provide while they apply for an Indian Overseas Bank car loan?
A. A salaried applicant has to submit the following documents pertaining as proofs of their income along with their application for an Indian Overseas Bank car loan:
- The latest documents for an applicant’s income tax returns
- An assessment order for the applicant
- The latest salary slips that clearly mention the applicant’s present gross and net incomes
- The bank statements for the previous 3 months that show the monthly credit of the applicant’s income
14. What are the steps that are involved in an Indian Overseas Bank car loan application?
A. An applicant has to submit a quotation that lists the price of the car that the applicant wishes to buy with the application. Every application for an Indian Overseas car loan goes through the following steps:
- Application by the customer aspiring to take out an Indian Overseas car loan
- Processing of the application for the Indian Overseas car loan
- Documentation to be submitted by the applicant and then verified by the bank
- The disbursement of the loan on successful processing
15. Will an applicant be required to furnish their CIBIL score when applying for an Indian Overseas Bank car loan?
A. The Indian Overseas car loan is a secured loan, which implies that the CIBIL score will not be asked for unless absolutely necessary. That being said, a good CIBIL score can help an applicant secure the car loan faster and the approval is attained much quicker. Generally, a CIBIL score is considered good when it is over 750.
16. Is a third party guarantee required when applying for Indian Overseas Bank car loans?
A. No, a third party guarantee is not required when an applicant applies for Indian Overseas Bank car loans as it is a secured loan. This holds true for Indian residents. NRIs however, need to provide a suitable guarantor who is an Indian citizen in order to apply for this car loan.
17. How can one remove the condition of hypothecation, on the car that was purchased, after the car loan has been paid back?
A. To remove the hypothecation of your vehicle, you will have to collect the following documents and submit them at your RTO:
- No Objection Certificate from the Indian Overseas Bank
- No Objection Certificate from your insurance company, as well as the RTO where your vehicle has been registered
- Original copy of the Form 35