In India's expanding banking sector, numerous public and private sector banks offer various services. Union Bank of India, a renowned public sector bank, is well-known for its loan offerings, including car loans called Union Miles.
Here are the key details regarding the interest rates for Union Bank car loans that you should be aware of.
You can use car loans to purchase new cars for personal use. The only precondition to be followed is that your car cannot be older than 3 years when applying for the loan. Here are some of the characteristics of Union Bank car loan schemes:
No Loan Amount Limit: When purchasing a car with a Union Bank car loan, there is no upper limit on the loan amount.
Rate of interest: The rate of interest for the Union Bank car loan starts from 8.80%.
Loan Tenure: You have to repay the loan amount within 84 months or 7 years.
Guarantee: The guarantee requirements for Union Bank car loans vary depending on the borrower's profile.
For individuals with a good credit score, no guarantee is required.
Non-Resident Indians (NRIs) are eligible for a car loan but must be residents of India.
In other cases, such as partnerships, directorships, or promoters, specific guarantee requirements may apply. It is advisable to check with Union Bank for the exact guarantee criteria based on your individual circumstances.
Low Processing Charges: Union Bank of India offers the benefit of low processing charges for car loans.
Union Bank of India offers competitive interest rates on their car loans based on various factors.
For new 4-wheelers, the interest rates under the Union Miles Scheme start from 8.85% and can go up to 10.50% depending on the customer's credit score.
If it's a new 4-wheeler electric car, the interest rates under the Union Green Miles Scheme start from 8.8% and can go up to 10.40%.
For old 4-wheelers that are not older than 3 years, the interest rates range from 12.9% to 13%.
Similarly, for old 4-wheeler electric cars not older than 3 years, the interest rates range from 12.2% to 12.3%.
These competitive interest rates make Union Bank's car loans an attractive option for individuals looking to finance their new or used vehicles.
The Union Bank of India offers car loans with interest rates that vary based on the customer's Credit Information Bureau (CIC) score.
For individuals with a CIC score of 750 and above, the premium rate is 0.45% with an effective rate of interest (ROI) of 8.85%.
Customers with a CIC score ranging from 700 to 749 are offered a premium rate of 0.60% and an effective ROI of 9.90%.
Those with a CIC score between 650 and 699 have a premium rate of 1.00% and an effective ROI of 10.30%.
For individuals with a CIC score below 650, the premium rate is 1.20% with an effective ROI of 10.50%.
These varying interest rates allow Union Bank to provide competitive loan options based on the customer's creditworthiness.
Many factors can affect the interest rate of a car loan, and you must be aware of them:
Type of vehicle: The interest rate may vary based on the type of vehicle you are purchasing using the loan, such as a new car, used car, or luxury vehicle.
Repayment duration: The loan term or duration you choose can impact the interest rate. Longer loan terms may have higher interest rates.
Interest rate type: Determine whether the interest rate is fixed or variable. Fixed rates remain constant throughout the loan term, while variable rates can fluctuate.
Market demand: Interest rates may be influenced by the demand for vehicles in the market. Higher demand could result in higher interest rates.
Loan amount: The requested loan amount can affect the interest rate. Higher loan amounts may result in higher interest rates.
Inflation rate: The inflation rate of a country can impact interest rates. Higher inflation rates may lead to higher interest rates.
Credit history: Your credit history plays a significant role in determining the interest rate. A good credit history may result in lower interest rates, while a poor credit history may lead to higher rates.
Repayment capacity: Lenders assess your ability to repay the loan based on factors such as income, expenses, and existing debt. A strong repayment capacity may result in better interest rates.
Relationship with the lender: Existing customers with a good relationship with the lender may be offered preferential interest rates.
Borrower type: Whether you are an individual or non-individual borrower, such as a company or organisation, can influence the interest rate offered to you.
Understanding these factors can help you make informed decisions when applying for a car loan.
The eligibility criteria for applying for a Union Bank car loan are very simple and are mentioned below:
To apply for a Union Bank car loan, you must be a resident of the country or an NRI(Non-resident Indian).
The vehicle must be purchased for personal use.
The minimum age of the borrower must be at least 18 years, and the maximum age should be 75 years.
The loan can be applied by you or any eligible family members like father, mother, son, spouse or daughter.
Union Bank allows companies or organisations to apply for loans for their employees or committee members.
Although there is no income criterion, you must have a good repayment capacity to qualify for the loan.
Applying for a Union Bank car loan is a simple process. Here are the steps to follow:
Gather required documents: Collect all the necessary documents for the loan application. These typically include proof of identity, address proof, income proof, bank statements, and details of the car you intend to purchase.
Visit the branch or apply online: You can either visit the nearest Union Bank branch or apply online through their official website.
If you prefer to visit the branch, meet with a loan officer who will guide you through the application process.
If you choose to apply online, visit the Union Bank website and navigate to the car loan section.
Fill out the application form: Complete the car loan application form and ensure that you provide all the required details, including personal information, employment details, and loan requirements.
Submit the necessary documents: Attach all the required documents to your application form. Double-check that you have included all the necessary paperwork to avoid any delays in the loan processing.
Review and submit: Carefully review the application form and attached documents for accuracy and completeness. Make any necessary corrections or additions before submitting the application.
Wait for loan approval: After submitting the application, the bank will review your documents and assess your eligibility. This process may take some time, so be patient and wait for the bank's decision.
You should have adequate preparation and effective communication for negotiating the lowest car loan interest rate with Union Bank. To get a favourable interest rate, here are some of the steps that you can take:
Research and compare: Compare interest rates from different lenders to establish a reasonable range for negotiation.
Maintain a good credit score: A high credit score increases your chances of securing a lower interest rate. Ensure your credit score is in good shape before negotiating.
Prepare necessary documents: Gather all required documentation, including proof of income and employment details, to demonstrate your financial stability and professionalism.
Inquire about promotions and discounts: Ask if Union Bank has any ongoing promotions or discounts for car loans that could potentially lower your interest rate.
Make a reasonable offer: Based on your research, propose an interest rate that is both reasonable and realistic.
Discuss other loan terms: If the lender is not willing to lower the interest rate, explore negotiating other loan terms such as the down payment amount or loan duration to create a more favourable overall loan package.
Interest rates may vary, so it is recommended to check the Union Bank website or contact customer service for the latest information.
Yes, interest rates may differ depending on the type of vehicle, with different tiers for new cars and specific categories.
Applicants must be at least 18 years old or above to be eligible for car loans at Union Bank of India.
There is no upper limit on the loan amount, and the bank typically offers up to 85% of the cars value for new car purchases.
Assuming all application and documentation requirements are met, the bank typically takes around 2 days to sanction the loan.
Union Bank offers both fixed and variable interest rate options for car loans. Fixed rates remain constant throughout the loan tenure, while variable rates fluctuate based on market conditions.
Yes, your credit score plays a role in determining the interest rate. Higher credit scores generally result in lower interest rates, which are more favourable for borrowers.
Yes, it is possible to refinance an existing car loan to obtain a lower interest rate.
Making a larger down payment can be beneficial as it reduces the amount borrowed and, subsequently, the interest paid. This can lead to a more favourable interest rate on the car loan.