Used car loan can be a good option to avail as the vehicle depreciate around 10-20% in its value during the first year itself. For example-You can buy a year old Skoda Octavia RS, whose new models are available for about Rs 15 lacs, at a much lesser price of around Rs 10 lacs. Further, an old model of Honda Accord can be available at the cost of new Maruti Swift. Moreover, the used car loan market is gaining momentum with the sale of over 3 million used cars compared to 2.2 million new cars in India. In addition, two out of every three car loan application are made for used vehicles. This gives you an idea of the rapid adoption of used cars among people in India. Seeing such positive trends, several lenders are coming up with suitable financing options for used cars. One such lender is Bank of India (BOI), a major public sector bank. We, through this article, will let you acquaint with the basic features, eligibility, interest rate & other charges, documentation related to used car loan of BOI.
Features, fees and charges
- Maximum Loan- 80% of the car value
- Maximum Loan Tenure- 5 years
- Age of the car must not be more than 3 years
- Interest Rate- 10.95% per annum
- Processing Fee-1% of the loan amount
- Minimum Processing Fee- Rs 500
- Maximum Processing Fee- Rs 10,000
- Minimum Margin- 30% of the depreciated value of the car or value assessed by the valuer
- Other charges as applicable by the bank
Eligibility Criteria
Parameters Salaried Professional Self-employed Age 21-65 years 21-65 years Minimum Income Not specified Not specified Employment/Business Continuity Minimum work experience of 2 years with one year with the existing employer Been in the business for at least 2 years
Documentation
| Proofs | Salaried Professional | Self-employed |
|---|---|---|
| Age Proof | Passport/PAN Card/ Voter ID card, Photo Driving License with birth date/Photo ration card with DOB/Employer certificate/ID/School/College Leaving Certificate | Passport/PAN Card/ Voter ID card, Photo Driving License with birth date/Photo ration card with DOB/Employer certificate/ID/School/College Leaving Certificate |
| Identity Proof | PAN Card/ Voter ID/Passport/Driving License, photograph | PAN Card/ Voter ID/Passport/Driving License, photograph |
| Income Proof | Latest 3 month salary slip, Form 16 | One previous year ITR and Adv. Tax Challan of current year showing the payment of higher tax compared to the previous year |
| Address Proof | Latest Telephone Bill/ Electricity Bill/Property Tax Receipt/Passport/ Voter ID | Latest Telephone Bill/ Electricity Bill/Property Tax Receipt/Passport/ Voter ID |
| Sign Verification Proof | Passport/Photo Driving License with birth date (laminated, recent , legible)/ Credit Card Statement with Credit Card Copy/Banker's Verification, Copy of Margin money paid to bank | Passport/Photo Driving License with birth date (laminated, recent , legible)/ Credit Card Statement with Credit Card Copy/Banker's Verification, Copy of Margin money paid to bank |
| Application Form with Photograph | Yes | Yes |
| Car Valuation Report | Yes | Yes |
| Loan Agreement Duly Signed with RTO Set (Post Sanction/Pre-Disbursement Documentation) | Yes | Yes |
| Standing Instruction (SI) Request / ECS Form / Post Date Cheques (PDCs). Security Cheques required for SI and ECS (Post Sanction/Pre-Disbursement Documentation) | Yes | Yes |
Table showing interests and EMIs on used car loan of Rs 3,00,000 for different periods at Bank of India
Loan Amount Tenure in Years Interest Rate EMI Total Interest Total Amount (Principal+Interest) Rs 3,00,000 1 10.95% Rs 26,508 Rs 8,090 Rs 3,18,090 Rs 3,00,000 2 10.95% Rs 13,975 Rs 35,409 Rs 3,35,409 Rs 3,00,000 3 10.95% Rs 9,815 Rs 53,322 Rs 3,53,322 Rs 3,00,000 4 10.95% Rs 7,746 Rs 71,826 Rs 3,71,826 Rs 3,00,000 5 10.95% Rs 6,515 Rs 90,915 Rs 3,90,915
Now you have the data available with you to assess your feasibility for the used car loan of Bank of India.
(Updated on: 21st October, 2016)
