Punjab National Bank Car Loan

Interest Rate	8.50% to 8.95%
Processing Fees	Fully waived under Monsoon Bonanza Offer from 01.06.2017 to 30.09.2017
Pre-Closure Charges	Nil
Loan Tenure	1 year to 7 years
Guarantor Requirement	Guarantor Required

Leading the loan products offering is Punjab National Bank Car Loan known popularly as PNB car finance. Positive customer reviews across various channels speak volumes of the service provided by PNB.

Features of PNB Car Loan

Nominal Income Eligibility

Salaried & self-employed individuals and business concerns drawing a minimum net income of Rs.20,000 per month are welcome to apply for a car loan with PNB. An applicant can add income of parent/spouse to increase the ceiling. This rider acts as an incentive if the individual monthly income is low and does not satisfy the primary condition.

Loan Amount

For salaried individuals and proprietorship concerns, up to 25 times the monthly net income or Rs.100 lakh(whichever is lower) is extended as the car loan amount. For business houses(corporates & non corporate), there is no limit on the loan amount. In both cases, you can apply for a loan for one or more vehicles.

Maximum Funding

For new cars, up to 85% of the ex-showroom price is funded by the bank. In case of used cars, the percentage of funding comes down to 70% and under a tie-up arrangement, it is 90%.

Hypothecation Loan Agreement

Cars procured under the PNB car loan scheme is jointly registered in the name of the bank and borrower, which implies the vehicle is hypothecated to PNB until the time the borrower pays off the loan amount. After conclusion of the repayment tenure, borrower becomes the sole owner of the car.

Car Loan Security

In certain cases, PNB may require a third-party guarantor or collateral to indemnify the car loan. However, this clause can be relaxed for individuals who have a credible credit profile.

Terms of Loan Repayment

If an individual decides to avail this loan in order to purchase a new car, Jeep, van, SUV or MUV, he or she will be eligible to repay the debt with a maximum of 84 EMIs. However, in case of a used vehicle, the loan repayment has to be done within 60 EMIs.

If the borrower is a part of the agriculture industry or any other allied activity, the loan can be repaid at yearly or half-yearly intervals during the time of the harvest.

Prepayment Fees

There are no additional prepayment charges applicable if the candidate has availed a loan at a floating interest rate. On the other hand, an additional fee of 2% of the outstanding prepaid amount has to paid by the borrower if the car loan has been taken at a fixed rate of interest. Prepayments are exempt of any charges if:

• The borrower prepays the loan using personal resources
• There is a change in the terms of the loan sanction
• The individual moves to a different bank in 30 days post an upward interest revision

Documentation and Verification Fees

Loans carry a small processing charge in addition to security inspection or verification fees. While the banks usually charges 1% of the loan amount till a maximum of Rs.6,000, this amount can be waived as part of a seasonal offer.

There is no need for any periodical inspection when the loan is repaid regularly, therefore, no charges are levied in such a scenario. However, if a loan account under the NPA category has been receiving irregular repayments, the borrower will have to obtain PNB 551 twice every year after regular inspections. The candidate has to pay a fine of Rs.1,000 in addition to the applied GST in such a scenario.

Low Interest Rates

Like most of its counterparts in public sector banking, PNB car loan interest rates consist of a fixed and a variable component. The variable component is known as the Marginal Cost of Funds-Based Lending Rate (MCLR), and is generally applicable to all the lending products offered from the bank. The present 1-year MCLR is 8.30% as on 7 March 2018.