UCO Bank Car Loan Interest Rates

UCO Bank Car Loan Interest Rates 2018

Salaried employees, self-employed professionals, agriculturists, businessmen, ex-staff of UCO Bank, business firms, pensioners and Non-resident Indians are eligible to avail a UCO Bank car loan. The interest rate for a UCO Bank car loan is decided depending on the base rate of the bank and currently is 10.20%. UCO Bank offers this as a floating interest rate, which will vary according to the revision in the base rate. The interest rate is calculated on a daily reducing balance basis on the outstanding loan amount.

UCO Bank Interest Rate = Base Rate + 0.25%

	New Car Interest Rates – FLOATING
Loan Tenure of up to 7 years	Interest Rate = 10.20%

Loan Processing Charges	1% of the loan amount / Maximum of Rs 1500
Loan Tenure	Maximum Tenure – 84 Months
Quantum of Loan	Up to 85% of the on-road price. The road tax and insurance is included here. No cap on the maximum limit.
Loan Margin	15%
Foreclosure Charges	NIL
Insurance	Life Insurance for the borrower – UCO Rin Jeevan Suraksha

How do you calculate Interest Rates for a UCO Bank Car Loan?

Borrowers can choose to repay back a UCO Bank car loan using an EMI or an equated monthly installment. An equated monthly installment is the total of the principal amount taken by the borrower and the interest rate charged by UCO Bank. The repayment for the car loan will be done over the selected loan tenure. Borrowers have to repay a certain amount every month and initially the monthly installment will consist majorly of the interest and will only carry a small portion of the principal amount. As the loan term advances, the interest amount will sufficiently reduce, with the principal amount increasing towards the end of the loan tenure. Loan repayments via monthly installments will work out to be cost-effective for a borrower in the long term.

The EMI for a UCO Bank car loan can be calculated as follows –

EMI (E) = [P x r x (1+r) ^n]/ [(1+r) ^n-1]

Where,

P = The Principal Loan Amount

R = The Interest rate charged per month. UCO Bank charges a floating interest rate of 10.20% for all types of applicants. This is calculated depending on the base rate of the bank.

N = Number of monthly installments i.e. the number of years opted for the repayment of loan.

For a principal amount of Rs. 1, 00,000 given at an interest rate of 10.20% and a loan tenure of one year, an estimate of the total sum of EMIs that has to be paid by the borrower is Rs. 1, 04, 720, out of which the interest will be around Rs. 4720.

In the following example, for a car loan amount of Rs. 4,00,000 to be repaid in 60 months at an interest rate of 10.20% from UCO Bank (Calculations based on EMIs paid in advance):

Year	EMI Amount	Interest Amount	Principal Amount	Balance Due
2015	Rs. 25,399	Rs. 6,612	Rs. 18,786	Rs. 3,81,214
2016	Rs. 1,01,595	Rs. 35,867	Rs. 65,728	Rs. 3,15,486
2017	Rs. 1,01,595	Rs. 28,841	Rs. 72,755	Rs. 2,42,731
2018	Rs. 1,01,595	Rs. 21,063	Rs. 80,533	Rs. 1,62,198
2019	Rs. 1,01,595	Rs. 12,453	Rs. 89,142	Rs. 73,057
2020	Rs. 76,196	Rs. 3,140	Rs. 73,057	Rs. 0

The total interest to be paid towards a UCO Bank Car Loan for an amount of Rs. 4, 00,000 would be Rs. 107976.

Factors affecting UCO Bank Car Loan Interest Rates

There are multiple factors affecting the interest rate given to car loan customers by UCO Bank. Some of the common factors playing a key role have been listed below –

Market Fluctuations – UCO Bank offers car loans at floating interest rates which change according to market fluctuations. Depending on the inflation rate, interest rates might go up or down, with the bank revising as per the changes. If the inflation is low, then the interest rates get lowered and vice versa. Borrowers must be financially prepared for this when they avail a car loan and must plan as required.

Car Model – Banks sometimes give different interest rates for different car models. The bank looks at the resale value and the popularity of the car model when it offers car loans at a particular interest rate. In most cases, while availing a car loan hypothecation of the new vehicle is required. If the borrower is unable to repay the loan, then since the car is kept as security, the bank might seize the vehicle and sell it to get back the loan amount. Every time a borrower opts for a car loan, the car model and repayment capacity should always be kept in mind to avoid unnecessary complications.

Down Payment – Banks look into the down payment amount done by a prospective borrower, when a car loan is availed. Though the down payment amount can be decided by the borrower according to the financial situation, banks always prefer individuals who make higher down payments. Mostly this ensures that banks offer the best interest rates to borrowers. With the interest rate being lower, this reflects on the monthly installment as well, which in turns becomes significantly less.

Income – Banks generally approve car loans for customers who meet a certain income criteria. UCO Bank requires that depending on the type of applicant, the necessary income criteria has to be met. The borrower’s income is generally given weightage because the loan has to be conveniently repaid without any arrears and disruptions. The borrower should be able to sustain the new car loan along with other debts and liabilities, with the current income shown. Depending on the income factor, banks might offer a better interest rate for borrowers in general.

How does CIBIL score affect UCO Bank Car Loan Interest rates?

CIBIL score is a key factor when it comes to car loan interest rates. The score held by an individual plays a major role in determining the interest rate offered by a lender for a new car loan. Prospective borrowers should always carry a good score regardless of their income and other outstanding liabilities. A good score ensures that the customer gets the best deals with regards to interest rates. Low credit score reflects poorly on the individual’s financial capabilities and money management abilities. In this scenario, banks might not give an attractive rate and might even increase the interest rates.

Key Pointers to know about UCO Bank Car Loan Interest Rates

• Since the interest rates offered by UCO Bank is a floating rate, borrowers should be aware of market fluctuation and related changes to keep track of their monthly installments amounts.
• The interest rate for a UCO Bank car loan is calculated on a daily balance reducing basis. This helps customers to save and significantly cut down on the total cost of the car loan.
• UCO Bank gives a standard interest rate for car loans and does not vary the rate depending on the selected loan tenure.