Are UCO Bank Car Loan Interest Rates Lowest in the Industry?

It’s always a fun riding a stylish car with eye-catching interiors and exteriors. Tasting the roadside eateries while riding a car with your spouse or love interest is an amazing feeling. But when the wallet is put under the scanner to check whether it is ready to deal with the cost that is required to bring home a car, many become inept due to the surging interest rates on a car loan. The interest rates, to a greater extent, determine the outflow of money from your pocket towards servicing the loan.

So, when the rates charged are on the higher side, you would end up paying more which otherwise can be saved with lower interest rates. Your search for lower rates finishes with UCO Bank, a Kolkata-headquartered public lender which has been in the banking space since 75 years. The bank offers a car loan at affordable rates. But how much affordable is the question you would ask, right! So, let’s explore UCO Bank Car Loan Interest rates here and set the course for an easy and low-cost car acquisition.

UCO Bank Car Loan Interest Rates

UCO Bank finances the purchase of both new and used cars. The interest rate mechanism at UCO is purely based on Marginal Cost of Lending Rate, which applies for floating rate loans.

New Car Loan- 1-year MCLR+0.40%

                      - 8.60%+0.40%=9% p.a.

Used Car Loan- 1-year MCLR+1.50% if you buy from a certified dealer

                       -  8.60%+1.50%=10.10% p.a.

                       - 1-year MCLR+2% for others

                       - 8.60%+2%= 10.60% p.a.

Now let us see where does UCO Bank stand in terms of interest rates compared to its peers. Below are the interest rates of various lenders with the new car rate mentioned first followed by that of used car in each of the cases.

(Interest Rates in % p.a.)

State Bank of India (SBI)- 9.20-9.25

                                         - 12.65

                    HDFC Bank - 11.50-13.75

                                         - 14.50-17.50

   

                      ICICI Bank - 10.75-12.75

                                         - 15.75.  

                      Axis Bank - 11-12, 9.15 for salaried

                                        -  14.50-16.25

                   

   Bank of Baroda (BoB)  - 8.85-10.85  

Punjab National Bank (PNB)- 8.80-9.40

          Bank of India (BOI) - 9.35 for both new and used cars

Oriental Bank of Commerce (OBC) - 10.20-10.45

                                                           - 12.70

                    Canara Bank -8.75-8.95

           Corporation Bank - 9.40-9.90

                Syndicate Bank - 9.40

So, there you saw a list of car loan lenders with their respective interest rates on both new and used cars. You could find some banks which do not offer a loan for buying a used car. It is evident from the chart that UCO Bank is certainly one of the most affordable lenders available today, but not offering the lowest interest rate in the industry.  

How Much EMI You Need to Pay with UCO Bank Car Loan Interest Rates?

The interest rate is one of the vital factors determining the quantum of Equated Monthly Installment (EMI) towards a car loan. Assume you are buying a new car worth ₹7 lakhs. So, as per the new interest rate regime, you would need to service the loan at 9% while availing it from UCO Bank. The maximum time for which you can avail a loan is 7 years. Based on the eligibility, the bank decides to lend ₹6 lakhs. So, on a 7-year loan of ₹6 lakhs at the rate of 9% would bring forth an EMI and interest outflow of ₹9,653 and ₹2,10,890, respectively.

The interest outgo, however, can be reduced if you opt for a slightly lesser tenure, say 5 years, but with an expense of comparatively higher EMI. If you do follow this, the monthly installment and overall interest repayment are going to read as ₹12,455 and ₹1,47,301, respectively. The EMI, as you see, is higher by ₹2,802, but interest slashes by ₹63,589, quite a lot of bucks, isn’t it folks? As a buyer wanting to safeguard the money, this is one practice you should follow to cut down the interest repayment.

I hope, you are now fully updated on UCO Bank Car Loan Interest rates and their effects on your repayment journey. So, I leave it to you to decide whether UCO Bank is the one where you should apply for a Car loan or not. The choice is yours, but make sure your repayment capability is good enough to suffice the EMI payment and thus preventing any incidents of default, which if happens, could lower down your CIBIL score. With that, the chances of future loan approval from the lender can get either bleak or the eventual loan amount could be a lot lower than what you would need.