Kotak Mahindra Bank Car Loan
Now we will analyze that if you are planning to take a car loan from Kotak Mahindra Bank, then what are the rules and regulations if you belong to the salaried class, meaning if you are doing a job. Similarly, if you are self-employed or run your own business, then what are the rules and regulations for taking a car loan from Kotak Mahindra Bank in that case.
Apart from this, what rate of interest Kotak Mahindra Bank offers, what is the concept of hypothecation, and what power the bank has when your car loan is running. You might have noticed that the word “Hypothecation” is written on the RC when the car loan is active. What authority the bank gets through this hypothecation in a car loan, and all other questions related to car loans, we will discuss all of them.
We will see how a car loan is provided and all the related questions one by one. Apart from this, if you are planning to take a car loan from Kotak Mahindra Bank, then in this case, the minimum age requirement according to Kotak Mahindra Bank is 21 years, and the maximum age should be 60 years.
what does this mean?
It does not mean that you can take a fresh car loan at the age of 60. The simple meaning of 60 years is that when you reach the age of 60, any car loan running in your name should be completely closed by that time.
Now here the bank says that the minimum loan tenure must be at least one year. That means you have to take the car loan for a minimum of one year. You cannot go to Kotak Mahindra Bank and say that you want a car loan for six months. For example, if you need ₹10 lakh and you ask the bank for a six-month loan, Kotak Mahindra Bank, and not only this bank but almost every bank, will not allow this. This is a thumb rule followed by all banks that the minimum car loan tenure is one year.
The maximum tenure for a car loan is up to seven years. This rule is not only for Kotak Mahindra Bank but applies to almost all banks. Generally, banks provide car loans for a tenure ranging from 1 year to 7 years.
Now, as explained in the previous example, let us understand this clearly. Suppose a person is 55 years old and wants to take a car loan. In this case, that person cannot take a 7-year loan. Because the maximum age limit is 60 years, a 55-year-old person can avail a car loan only for 5 years.
Maximum Car Loan As Per Income
how much maximum car loan they can get if their salary is ₹20,000, or how much maximum car loan they can get if their salary is ₹50,000.
In this case, the bank simply says that whatever your salary is, or if you belong to the business class, whatever your monthly income is, you should multiply it by twenty. That amount is the maximum loan you can avail for a car loan.
For example, if someone’s salary is ₹20,000, then multiplying it by twenty means that this person can avail a maximum car loan of ₹4,00,000.
Car Loan Rate of Interest – Kotak Mahindra Bank
Kotak Mahindra Bank simply states that their car loan rate of interest varies between 6.50% and 20%. This wide variation exists because the rate of interest mainly depends on your credit score.
If a person has a perfect credit score, has previously taken a car loan, bike loan, or any other loan, and has made all repayments on time, then in such a case, the person can get a car loan at an interest rate of 6.5%.
Now, if there is a person who has never taken any loan before, then the bank does not know whether this person is creditworthy or not. Since there is no past loan history, the bank cannot be sure whether the person will repay the loan properly. In such a case, the rate of interest can be slightly higher than 6.5%, around 7.5% to 8%.
If there is a person who has had small loan defaults in the past, then first of all, it becomes very difficult to get a loan. Even if the loan is approved, it is very likely that the rate of interest will be higher. In cases where there have been minor loan defaults or delayed repayments, the interest rate can go up to around 10% or more.
So overall, the car loan rate of interest at Kotak Mahindra Bank can vary anywhere between 6.5% and 20%, depending on the borrower’s credit profile.
What Is Hypothecation in a Car Loan
Whenever we purchase a car through a car loan from any bank, in that case, most of the money invested in the car is the bank’s money, which we take as a loan. We invest only a small portion of the amount from our side, which is called the down payment.
Since the major portion of the money belongs to the bank, the bank says that until you repay the entire loan, the bank will create a charge on your car. This charge is called hypothecation.
The simple meaning of hypothecation is that it gives the bank the power that if at any point you stop paying your car loan EMIs, then the bank has the authority to take your car and keep it under its custody. This is known as hypothecation.
On the day you repay the entire loan amount to the bank, the bank will remove the hypothecation charge. This means you will have to visit the bank branch and take an NOC (No Objection Certificate) from the bank. This NOC is the most important document. On the day your car loan is completely closed, you must visit the branch and collect your NOC from there.
Car Loan: Ex-Showroom Price & On-Road Price
Will the loan be given on the ex-showroom price or on the on-road price? Let us understand this with an example.
Suppose there is a car whose ex-showroom price is ₹7,96,442. This is the price of the car when it is standing inside the dealership. After purchasing the car, you have to get the car registered and take car insurance. Suppose the registration fee is ₹75,211, the insurance cost is ₹34,401, and some other additional charges are ₹500. So the total price of the car, which is the total on-road price, becomes ₹9,06,554.
Now, let us understand how banks used to work earlier. If we talk about 4–5 years ago, banks used to say that they would provide the loan on the ex-showroom price. In this example, banks would say that out of the amount of around ₹7,96,442, they would give 80% as a loan, and the remaining 20% had to be paid as a down payment. Apart from this, registration charges and insurance had to be paid from your own pocket. These were also considered part of the down payment. Because of this, the down payment amount was higher and the loan amount was lower.
But due to competition, today almost every bank says that they will provide the loan on the on-road price. That means the loan will be calculated on the on-road price of ₹9,06,554. The good thing about Kotak Mahindra Bank is that they say they will provide the loan on the on-road price itself. In this case, they will give up to 90% of the on-road price, which is ₹9,06,554. While many banks provide only 80% loan, Kotak Mahindra Bank provides up to 90% loan on the on-road price. This means you need to pay only 10% as a down payment.
Document Required for Car Loan
Documents for Salaried Individuals
- Form 16
- Latest salary slip
- Proof of residence (address proof such as electricity bill or voter ID)
- KYC documents (PAN card or Aadhaar card)
Documents for Self-Employed Individuals
- Proof of residence (address proof such as electricity bill or voter ID)
- ITR for the last 2 years
- Profit and loss account statement
- Balance sheet for the last 2 years
Now let us also discuss the car loan calculator. If you take a loan, how much EMI will be generated. Let us understand this with an example.
📊 Car Loan EMI Calculator – Examples
| Loan Amount | Loan Tenure | Interest Rate | Monthly EMI |
|---|---|---|---|
| ₹10,00,000 | 7 Years | 8% | लगभग ₹15,560 |
| ₹5,00,000 | 5 Years | 8% | लगभग ₹7,790 |
| ₹3,00,000 | 7 Years | 8% | लगभग ₹4,676 |
💰 Minimum Income Requirement (Kotak Mahindra Bank)
| Criteria | Details |
|---|---|
| Minimum Monthly Income | ₹15,000 |
| No Other Running Loan & Income Around ₹25,000 | No Guarantor Required |
| Income ₹20,000 + Existing EMI ₹5,000 | Bank May Ask for Guarantor |