Car Loan Interest Rate
In the present day and age it is often difficult for people to commute easily from one place to another even in India’s big cities unless individuals have access to personal means of transport. But most of us are incapable of buying our dream vehicle because of financial constraints. Thus, the need for car loans including PNB car loans to finance a vehicle of ones choice. Car loan is a scheme where the banks and NBFCs offer financial aid to individuals for purchasing a vehicle of their choice in return for a small amount payable by them in the form of interest. Loan applicants or borrowers look out for car loans that have a lower interest rate as this would decrease their overall payout and. The reason being, the lower the rate of interest on the loan, the lower will be amount of EMI payable by them during the overall loan tenure of the bank. Presently there are many banks in the market providing car loan services and Punjab National Bank is one of them.

About Punjab National Bank
Punjab National Bank is a leading public sector bank in India and it has a long history of providing financial products that serve the needs of people from various walks of life. It is a banking institution which came into existence in the year 1894. It has its headquarters in New Delhi, India with a wide network of more than 6,986 bank branches with over 9,935 operating ATMs spread across 764 cities in India. Its key products include wealth management, private equity, mortgage loans, private banking, investment banking, finance, insurance, corporate banking, consumer banking and also credit cards. PNB is one of the leading providers of car loans that are comparatively easy to receive, fast and pocket friendly.

PNB Car Loan

PNB offers finances to both individuals and businesses for purchasing both new cars as well as second-hand cars. The loan application process is comparatively simple with less paper work involved. The rates of interest charged on these loans are also very affordable. The following are the various features and advantages of car loans that are offered by PNB:
  • Car loan is offered to both commercial and individual private individuals.
  • Car loans are offered at both fixed as well as floating loan methods.
  • Loan repayment period is up to 7 years.
Financing offered to purchase car is of a maximum of Rs. 25 lacs.

PNB Car Loan Interest Rate

The car loan offered by PNB has a very affordable interest rate. These lower interest rates lower the EMI payable by the borrower per month. Thus, delivers the applicants from financial constraints. Again, if the interest rate is lower than more and more applicants get drawn towards car finance option. Car Loan interest rates directly affect the Equated Monthly Instalment payable monthly. A higher loan interest rate requires a higher EMI and vice versa.
Car loan by PNB is offered at both fixed as well as floating interest rates with the period of loan repayment being 7 years. These interests are different for both men and women. Let us have a look at the various interest rates offered by PNB -
Floating Interest Rates
  • The Base Rate is fixed at 9.60%.
  • In case of floating interest rate for a maximum period of 7 years, if the person’s or businesses PNB score is more than 60 or if their offer 100% security against loan in the form of mortgage of immovable property or liquid security, then the interest rate becomes base rate plus 0.25%.
  • In case of female loan applicants for a maximum tenure of 7 years, the interest rate is base rate plus 0.15%.
  • For applicants other than the ones mentioned above, loan period below 3 years, the interest rate becomes base rate plus 1% and for loan period 3 years and more, the interest rates increases and becomes base rate plus 1.50%.
Fixed Interest Rates
  • Here also the base rate is constant at 9.60%.
  • For all the applicants for a maximum loan period of 7 years, the rate of interest becomes base rate plus 0.40%. In this case however, a reset clause of loan of 3 years is applied.

PNB Other fees and Charges

Apart from the rate of interest, the loan applicant also has to bear certain fees and charges for successful completion of the car loan application. Some of these key charges are as follows:
  • Pre-payment charges - the charges of pre-payment in case of floating interest rate is nil and in case of fixed interest rate, it is 2% on the unpaid left over amount.
  • Charges for documentation – These charges tend to vary from time to time. Occasionally no such charges are levied on applicants in case of special offers or specific customers.
Margin of loan- the loan margin on brand new vehicles is 15% of the on-road price or value of the new car including insurance and road tax that is payable one time only. For other vehicles, where PNB has made collaboration with dealers, the loan margin is 10% of the on-road price of the vehicle.

Factors Impacting PNB car Loan Interest Rates

Lower interest rates are one of the most sought after features in a car loan. Everyone wants a car loan with lower interest rates as it decreases the overall loan payouts. Interest rates on car loans depend on a number of factors. They are as follows:
  • To lessen the interest rate and repay the loan, the applicants can take into consideration the income of family members such as spouse, children or parents also. This will enable them meet the minimum income requirements of Rs. 20,000 stipulated by the bank.
  • Period of loan is another factor affecting interest rates. They range between 12 months to 84 months. Longer the loan tenure, lesser will be the EMI payable and higher will be the level of risk involved. Thus applicants generally opt for shorter loan tenures.
  • Another important factor is the credit score of the applicant that includes his previous credit card debts, loans and the payments made till date. Through this score, the loan repayment eligibility of the applicant can be easily ascertained. Applicants having a good CIBIL score are more likely to get car loans from the bank.
Again, a good relationship of the applicant with the bank is considered essential for being approved for a car loan. Additional discounts, concessions and privileges such as a low PNB car loan interest rate are often offered to borrowers who already have a good working relationship with the bank.