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Key Features of Indian Bank Car Loan

  • Competitive Interest Rates:
    For new cars, interest rates start at 8.75% per annum, making it an affordable option for borrowers.
    For used cars, the rates begin at 10.80% per annum, which is competitive given the higher risk associated with pre-owned vehicles.
    Rates may vary based on factors like credit score, loan tenure, and the applicant’s relationship with the bank.
  • Flexible Loan Tenure:
    Offers a repayment period of up to 84 months (7 years) for new cars, allowing borrowers to spread out payments and manage monthly budgets effectively.
    For used cars, the tenure can go up to 60 months (5 years), depending on the vehicle's age, ensuring the loan term aligns with the car’s usable life.
  • High Loan Amount:
    The maximum loan amount can go up to Rs. 2 crore, catering to a wide range of vehicles, from budget cars to luxury models.
    Financing covers up to 85% of the on-road price for new cars (including registration, insurance, and accessories) and a similar percentage for used cars based on valuation.
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    • New and Used Car Financing: Supports the purchase of new cars, including passenger cars, SUVs, and multi-utility vehicles (MUVs). Also finances used cars, provided they are not more than 3 years old and certified by a reputed automobile engineer.
    • High Loan-to-Value (LTV) Ratio: - New Car Loans: Up to 100% funding of the car’s invoice value, minimizing the need for additional savings.
      - Used Car Loans: Up to 95% of the car’s value, with premium vehicles eligible for up to 110% LTV under specific conditions.
    • Loan Against Car (Top-Up Loan): Pledge your existing vehicle as collateral to avail additional funds up to ₹50 lakhs or 90%-250% of the car’s value, depending on credit score and repayment history. Ideal for urgent financial needs without selling your car.
    • Pre-Approved Offers: Eligible new and existing customers can enjoy pre-approved car loans, simplifying the process and ensuring faster access to funds.
    • No Additional Collateral Required: The vehicle itself acts as collateral, making the loan more accessible with no need for extra security or guarantees.
    • Convenient Application Channels: Apply online through the Indian Bank website or mobile app, or visit a branch. You can also use virtual assistants like TIA (24/7) and WhatsApp support for a seamless experience.
    • Additional Benefits:
      • Quick disbursal: Funds transferred swiftly post-approval.
      • Customizable plans: EMI structure and loan terms tailored to your needs.
      • Transparency: No hidden charges, full disclosure of terms and fees.
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Benefits of Indian Bank Car Loan

  • Affordable Financing with Low Interest Rates: Starting at 8.75% p.a. for new cars and 10.80% p.a. for used cars, the competitive interest rates reduce the overall cost of borrowing.
    This affordability translates into lower monthly EMIs, making car ownership accessible even for those with moderate incomes.
    Compared to market averages (where car loan rates can exceed 10-12%), this saves borrowers significant interest over the loan tenure.
  • Flexible Repayment Options: With a repayment tenure of up to 7 years (84 months) for new cars and 5 years (60 months) for used cars, borrowers can choose a term that suits their financial situation.
    Longer tenures mean smaller monthly payments, easing the burden on monthly budgets, while shorter tenures allow faster debt clearance for those who can afford higher EMIs.
  • High Loan Coverage: Financing up to 85% of the on-road price (including taxes, insurance, and accessories) reduces the upfront cash burden on buyers.
    With a maximum loan limit of Rs. 2 crore, it caters to diverse needs—from affordable compact cars to premium SUVs or luxury sedans—ensuring most vehicle aspirations are within reach.
      • Freedom to Prepay Without Penalties: The absence of prepayment charges is a major advantage, allowing borrowers to pay off the loan early if they come into extra funds.
      • Cost-Effective with Low Processing Fees: A modest processing fee of 0.23% of the loan amount (capped at Rs. 10,000) ensures that borrowers aren’t hit with high upfront costs.
      • Quick and Convenient Application Process: Fast approvals mean borrowers can drive away their vehicle sooner, especially beneficial for those needing a car urgently for work or family needs.
      • Support for Both New and Used Cars: Financing for used cars (up to 3 years old) makes vehicle ownership affordable for budget-conscious buyers who may not want or need a brand-new car.
      • No Extra Collateral Needed: The financed vehicle itself secures the loan, eliminating the need to pledge additional assets, which reduces risk and complexity for borrowers.
      • Financial Flexibility with Top-Up Loans: Access additional funds (up to 180% of the car’s value, capped at ₹47 lakhs) through refinancing or top-up options, providing a safety net for emergencies or other expenses.
      • Bundled Insurance Convenience: Option to include comprehensive insurance with EMI payments via Mahindra Insurance Brokers Ltd., simplifying vehicle protection and budgeting under one plan.
      • Empowers Rural and Semi-Urban Buyers: With a strong presence beyond metro cities, Indian Bank supports customers in smaller towns and villages, bridging the gap where banking services may be limited.
      • Customizable EMI Plans: Flexibility to opt for fixed EMIs or adjustable plans (e.g., step-up or reducing balance) ensures payments align with your financial growth, enhancing affordability over time.
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How to Apply for an Indian Bank Car Loan

  1. Step 1: Determine Your Eligibility
    • Age: 21 to 65 years at the time of application.
    • Income: Steady income for salaried individuals; for self-employed, repayment capacity based on average income over the last two years.
    • For NRIs: Minimum monthly income of Rs. 40,000, with a co-applicant or guarantor if required.
    • Loan Amount: Up to Rs. 2 crore based on repayment capacity.
    • Tool: Use the Indian Bank EMI Calculator to assess repayment capacity.
  2. Step 2: Choose Your Application Mode
    • Online Application:
      • Visit www.indianbank.in.
      • Navigate to the “Loans” or “Retail Loans” section and select “Vehicle Loan.”
      • Click on “Apply Online” or download the application form.
    • Offline Application:
      • Visit the nearest Indian Bank branch.
      • Request and fill out the IB Vehicle Loan application form.
  3. Step 3: Gather Required Documents
    • Identity Proof: Aadhaar, PAN, Passport, Voter ID, or Driving License.
    • Address Proof: Utility bill, Aadhaar, Passport, or Rental Agreement.
    • Income Proof:
      • Salaried: Last 3 salary slips, Form 16, and 6 months’ bank statement.
      • Self-Employed: Last 2 years' ITR, profit/loss statement, and bank statement.
      • NRIs: Salary certificate, employment contract, and NRE/NRO account statements.
    • Vehicle Documents:
      • New Cars: Proforma invoice/quotation from the dealer.
      • Used Cars: Valuation certificate and RC copy.
    • Others: 2-3 passport photos; for loans > Rs. 25 lakh, additional collateral documents.
  4. Step 4: Fill Out the Application Form
    • Online: Fill in personal, income, and loan details; upload documents if prompted.
    • Offline: Complete the physical form and attach photocopies of documents.
  5. Step 5: Submit the Application
    • Online: Submit electronically and save the reference number.
    • Offline: Submit to a bank official and collect acknowledgment.
  6. Step 6: Verification and Approval
    • The bank reviews your documents, credit score, and vehicle (especially for used cars).
    • Additional collateral verification for loans above Rs. 25 lakh.
    • Approval time: 3–7 working days.
  7. Step 7: Loan Sanction and Disbursal
    • You’ll receive a sanction letter with loan terms upon approval.
    • Sign the agreement and complete final formalities.
    • Funds are disbursed directly to the dealer or seller.
  8. Step 8: Take Delivery of Your Vehicle
    • Collect your vehicle after payment is made.
    • Ensure it is registered and insured as required for disbursement.

Eligibility Criteria for Indian Bank Car Loan

  • 1. Age Requirements:
    • Minimum Age: 21 years at the time of loan application.
    • Maximum Age: 65 years at loan maturity.
    • Purpose: Aligns with typical working years to ensure repayment from active income.
  • 2. Applicant Categories:
    • Salaried Individuals:
      • Employment Type: Permanent employees in govt., PSUs, private companies, or reputed institutions.
      • Minimum Service: At least 6 months with the current employer.
      • Income: At least ₹20,000/month (typically 2–3 times the proposed EMI).
    • Self-Employed Professionals:
      • Professions: Doctors, engineers, architects, CAs, lawyers, etc.
      • Experience: Minimum 2 years in practice.
      • Income: Based on ITR or financial statements (last 2 years).
    • Self-Employed Business Owners:
      • Type: Proprietors, partners, or directors of registered businesses.
      • Business Tenure: Minimum 2 years with financial proof.
      • Income: Assessed through ITR, balance sheets, and profit/loss statements.
    • Non-Resident Indians (NRIs):
      • Residency: Indian citizens residing abroad.
      • Minimum Income: ₹40,000/month or equivalent in foreign currency.
      • Employment: At least 1–2 years with a reputed company/business.
      • Co-Applicant: A resident Indian (family member) may be required.
  • 3. Income Stability and Repayment Capacity:
    • Net monthly income should comfortably cover EMI and basic expenses.
    • Preferred EMI-to-Income ratio: Not exceeding 40–50%.
    • For used cars: Loan amount based on vehicle valuation.
  • 4. Creditworthiness:
    • CIBIL Score: Preferably 700+ for better chances and lower interest rates.
    • No past defaults or bankruptcy records.
    • Applicants with lower scores may qualify under stricter terms.
  • 5. Vehicle-Specific Eligibility:
    • New Vehicles:
      • Includes passenger cars, SUVs, MUVs, and two-wheelers.
      • Loan ceiling up to ₹2 crore.
    • Used Vehicles:
      • Vehicle should be less than 3 years old.
      • Must be certified by an automobile engineer.
      • For personal use only (not commercial).
  • 6. Collateral Requirements (If Applicable):
    • Loan up to ₹25 Lakh: No additional collateral required.
    • Loan above ₹25 Lakh: May require collateral like property, FDs, or LIC policies.
  • 7. Other Considerations:
    • Existing Indian Bank customers may get preferential treatment.
    • Adding a co-applicant with stable income improves eligibility.
    • Applicants must be Indian citizens or NRIs with Indian citizenship.
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Documents Required for Indian Bank Car Loan

  • 1. Identity Proof (Any One):
    • Aadhaar Card
    • PAN Card (mandatory for tax purposes and loan processing)
    • Passport
    • Voter ID
    • Driving License

    Note: Ensure the document is valid (not expired). For NRIs, a passport with a valid visa/work permit is essential.

  • 2. Address Proof (Any One):
    • Aadhaar Card (if not used as ID proof)
    • Utility Bill (electricity, water, gas – not older than 3 months)
    • Passport
    • Voter ID
    • Rental Agreement (with landlord’s ID proof)
    • Bank Passbook/Statement with address

    Note: For NRIs, a permanent Indian address is often required (usually linked to the co-applicant).

  • 3. Income Proof:
    • Salaried Individuals:
      • Last 3 months’ salary slips (stamped and signed)
      • Form 16 (last 1–2 years)
      • Bank statement (last 6 months, showing salary credits)
      • Optional: Appointment letter or employment certificate
    • Self-Employed Professionals:
      • ITR with income computation (last 2 years)
      • Profit & Loss Statement and Balance Sheet (certified by CA)
      • Bank statement (last 6 months)
      • Optional: Professional qualification certificate (e.g., medical council)
    • Self-Employed Business Owners:
      • ITR with income computation (last 2 years)
      • Business financials (certified by CA)
      • Bank statement (last 6 months)
      • Optional: Business registration proof (GST, Shop Act)
    • NRIs:
      • Salary certificate or last 3 months' pay slips (attested)
      • Employment contract/work permit
      • NRE/NRO bank statement (last 6 months)
      • Optional: Overseas address proof & co-applicant’s income proof

    Note: Income documents should reflect the declared repayment capacity. Joint applicants may need to submit both parties’ income documents.

  • 4. Photographs:
    • 2–3 passport-sized photographs (recent, preferably within last 6 months)

    Note: For NRIs, co-applicant photos may also be required.

  • 5. Vehicle-Related Documents:
    • New Vehicles:
      • Proforma invoice/quotation from dealer (includes on-road price)
      • Dealer agreement for disbursement details
    • Used Vehicles:
      • Valuation certificate from authorized engineer
      • RC copy (ownership and age proof)
      • Insurance copy
      • Optional: Transfer papers (if applicable)

    Note: Used vehicle certification ensures the bank’s risk is minimized.

  • 6. Application Form:
    • Duly filled and signed Indian Bank Vehicle Loan application form
    • Includes personal, income, loan, and vehicle details

    Note: Online forms may require digital signature or OTP confirmation.

  • 7. Collateral Documents (If Applicable):
    • Property papers: Title deed, sale agreement, valuation
    • FD receipts from Indian Bank/recognized institutions
    • LIC policy: Surrender value certificate and policy copy

    Note: Required only for loans above ₹25 lakh. Originals returned post loan repayment.

  • 8. Co-Applicant/Guarantor Documents (If Applicable):
    • Identity, address, and income proof (as per applicant category)
    • 2 passport-sized photographs

    Note: Co-applicant must be a resident Indian with income proof.

  • 9. Other Potential Requirements:
    • Post-Dated Cheques (PDCs) or ECS mandate for EMI setup
    • Credit Report (bank fetches CIBIL – ideal score: 700+)
    • Undertaking Letter: Especially for NRIs, declaring repayment commitment

Key Factors for an Indian Bank Car Loan

  • 1. Applicant’s Credit Score:
    • Impact: Critical for loan approval and interest rates.
    • Details:
      • 700+ scores get lowest rates (~8.75% p.a. for new cars).
      • 600–700 scores may qualify but with higher rates.
      • Below 600 may need a strong co-applicant.
    • Why It Matters: Reflects repayment reliability and impacts borrowing costs.
    • Actionable Tip: Improve score by clearing overdue debts before applying.
  • 2. Income and Repayment Capacity:
    • Impact: Determines loan eligibility and EMI affordability.
    • Details:
      • Salaried: Steady monthly income (₹20,000+).
      • Self-Employed: Average income via ITR for 2 years.
      • NRIs: Minimum ₹40,000/month income.
      • Ideal debt-to-income ratio: under 40–50%.
    • Why It Matters: Helps ensure timely repayments.
    • Actionable Tip: Use Indian Bank EMI Calculator to plan your loan.
  • 3. Loan Amount and Vehicle Value:
    • Impact: Affects loan size and eligibility.
    • Details:
      • Up to 85% of on-road price for new cars.
      • Up to 85% of valuation for used cars (≤3 years old).
      • Max loan limit: ₹2 crore.
    • Why It Matters: Higher amounts require stronger financial profiles.
    • Actionable Tip: Pick a car within your budget to ease repayment.
  • 4. Loan Tenure:
    • Impact: Influences EMI and interest costs.
    • Details:
      • New Cars: Up to 7 years (84 months).
      • Used Cars: Up to 5 years (60 months).
      • Shorter tenure = less interest but higher EMIs.
    • Why It Matters: Balance monthly payments and interest costs.
    • Actionable Tip: Choose a tenure aligned with your income stability.
  • 5. Interest Rate:
    • Impact: Directly affects EMI and total loan cost.
    • Details:
      • New Cars: Starts at 8.75% p.a.
      • Used Cars: Starts at 10.80% p.a.
      • Rates depend on credit score, tenure, and relationship with the bank.
    • Why It Matters: Even a small rate difference affects long-term cost.
    • Actionable Tip: Negotiate better rates as an existing customer.
  • 6. Type of Vehicle:
    • Impact: New vs. used vehicles affect eligibility and interest rate.
    • Details:
      • New Cars: Easier approval, lower risk, longer tenure.
      • Used Cars: Certified only, higher rate, max 5-year tenure.
      • Two-wheelers also eligible.
    • Why It Matters: Certification is crucial for used cars.
    • Actionable Tip: Ensure vehicle valuation is done in advance.
  • 7. Down Payment:
    • Impact: Reduces loan burden and improves chances of approval.
    • Details:
      • Minimum 15% of on-road price.
      • Higher down payment = lower interest and EMI.
    • Why It Matters: Shows borrower commitment and reduces risk.
    • Actionable Tip: Save for a higher down payment for better terms.
  • 8. Collateral (for high-value loans):
    • Impact: Needed for loans above ₹25 lakh.
    • Details:
      • Vehicle hypothecation up to ₹25 lakh.
      • Above that: property/FD/LIC policies needed.
    • Why It Matters: Secures large loans and improves approval.
    • Actionable Tip: Prepare supporting documents in advance.
  • 9. Applicant Profile:
    • Impact: Occupation and residency influence loan terms.
    • Details:
      • Salaried: Stable income eases approval.
      • Self-Employed: Requires financial proof.
      • NRIs: ₹40,000/month income and co-applicant often needed.
      • Age: 21–65 years at loan maturity.
    • 10. Existing Relationship with Indian Bank:
      • Impact: Enhances loan terms and speeds up approval.

FAQs On Indian Bank Car Loan

What is the Indian Bank Car Loan?
The Indian Bank Car Loan, officially called the IB Vehicle Loan, is a financing scheme to help individuals purchase new or used vehicles (cars, SUVs, MUVs, or two-wheelers) for personal use. It offers competitive interest rates starting at 8.75% p.a. for new cars and up to 85% financing of the on-road price, with a maximum loan amount of Rs. 2 crore.
Who is eligible to apply for this loan?
  • Salaried Individuals: Permanent employees with at least 6 months of service and steady income.
  • Self-Employed Professionals: Doctors, engineers, etc., with 2+ years of practice.
  • Business Owners: Firms operational for 2+ years with verifiable income.
  • NRIs: Indian citizens abroad earning Rs. 40,000/month minimum, often with a co-applicant.
  • Age: 21-65 years (at loan maturity). A good credit score (preferably 700+) enhances approval chances.
Can I use this loan to buy a used car?
Yes, the loan covers used cars up to 3 years old, provided they are certified by a reputed automobile engineer. The interest rate starts at 10.80% p.a., and the tenure is capped at 5 years, with financing up to 85% of the vehicle’s valuation.
What is the maximum loan amount I can get?
You can borrow up to Rs. 2 crore, depending on your income, repayment capacity, and vehicle cost. The bank finances up to 85% of the on-road price for new cars or the certified value for used cars, with the rest as your down payment.
What are the interest rates for the Indian Bank Car Loan?
  • New Cars: Starting at 8.75% p.a.
  • Used Cars: Starting at 10.80% p.a.
Rates vary based on credit score, loan amount, tenure, and your relationship with the bank. Existing customers may get preferential rates.
How long can I take to repay the loan?
  • New Cars: Up to 7 years (84 months).
  • Used Cars: Up to 5 years (60 months), based on the vehicle’s age.
You can choose a shorter tenure to reduce interest costs, tailoring the EMI to your budget.
What documents do I need to apply?
  • Identity Proof: Aadhaar, PAN, Passport, etc.
  • Address Proof: Utility bill, rental agreement, etc.
  • Income Proof: Salary slips (3 months), ITR (2 years), or bank statements (6 months), depending on your profile.
  • Vehicle Documents: Proforma invoice (new) or valuation certificate (used).
  • Photos: 2-3 passport-sized.
  • Collateral: For loans above Rs. 25 lakh, collateral documents may be required.
How do I apply for the loan?
  • Online: Via the Indian Bank website under the “Loans” section—fill the form and upload documents.
  • Offline: Visit a branch, collect the form, and submit it with documents.
Processing typically takes 3-7 days after verification.
Is there a processing fee for the loan?
Yes, a processing fee of 0.23% of the loan amount is charged, with a maximum cap of Rs. 10,000. This is relatively low compared to private lenders, making it cost-effective.
Can I prepay the loan early? Are there penalties?
Yes, you can prepay the loan at any time without any penalties. This flexibility allows you to save on interest if you clear the loan ahead of schedule.
Do I need to provide collateral for the loan?
  • For loans up to Rs. 25 lakh, the vehicle itself is hypothecated as security—no additional collateral is needed.
  • For amounts above Rs. 25 lakh, you may need to pledge assets like property, fixed deposits, or LIC policies for the excess portion.
What is the minimum down payment required?
You must pay at least 15% of the on-road price as a down payment (e.g., Rs. 1.5 lakh for a Rs. 10 lakh car). A higher down payment can reduce the loan amount and EMI.
Can NRIs apply for this loan?
Yes, NRIs with a minimum monthly income of Rs. 40,000 can apply. They often need a resident co-applicant or guarantor in India to facilitate the process and ensure repayment.
How is the EMI calculated?
The EMI depends on the loan amount, interest rate, and tenure. You can use the Indian Bank EMI Calculator on their website to estimate it. For example, a Rs. 5 lakh loan at 8.75% p.a. over 7 years results in an EMI of ~Rs. 8,000.
What happens if I miss an EMI payment?
Missing an EMI incurs a late payment penalty (typically 2-3% of the overdue amount) and may harm your credit score. Repeated defaults could lead to legal action or vehicle repossession. Set up auto-debit to avoid this.

List of Indian Bank Car Loans

  • Indian Bank New Car Loan
  • Indian Bank Used Car Loan (Pre-Owned Car Loan)
  • Indian Bank Electric Vehicle (EV) Car Loan
  • Indian Bank Car Loan for Agriculturists
  • Indian Bank NRI Car Loan
  • Indian Bank Top-up Car Loan
  • Indian Bank Loan Against Car (Car Refinance Loan)
  • Indian Bank Commercial Vehicle Loan
  • Indian Bank Luxury Car Loan
  • Indian Bank Insta Car Loan (Instant Approval Online)
  • Indian Bank Pre-approved Car Loan
  • Indian Bank Car Loan Balance Transfer
  • Indian Bank Car Loan for Women (Special Offers)