ICICI Bank offers full finance for pre-approved car loansICICI Bank has launched a pre-approved loan facility for its savings account customers to finance up to 100% of the on-road price of the car, a first in the industry. This facility enables customers to avail loans up to Rs 20 lakh. The bank said it disburses the loan amount within four working hours. The development comes during the festive season, an extremely busy time for financiers, as customers become eager to buy the vehicles of their choice quickly during this time.

Talking about the initiative, Ravi Narayanan, Senior General Manager & Head – Retail Secured Assets, ICICI Bank said, “This particular proposition is in line with our constant endeavour to add to the customer’s delight during the festive season. This is being extended to lakhs of our customers and we are happy that with the new service, they can now fulfill their festive purchases in a hassle-free manner, within just a few hours and delight their families. We believe that the compelling proposition will offer a unique best-in-class banking experience to our customers.”

Customers can avail the car loan facility by simply walking into any auto-dealership across the country, selecting the car of their choice, checking their pre-approved loan eligibility using their account number, filling in an application form along with documents and getting the loan disbursed within just four working hours.

This facility is based on a new algorithm curated by ICICI Bank for credit assessment of customers.

The banks says its algorithm uses an intelligent combination of various financial parameters including the Credit Bureau information, relationship and vintage patterns with the Bank to ascertain the credit-worthiness of a customer.

Based on the credit score of the customer, the Bank pre-approves the loan amount to customers which help them avail the loan at the time of purchase very quickly.

The bouquet of the unique features of this offer includes up to 100% finance on the on-road price of the car, pre-approved loan up to Rs 20 lakh, loan disbursement in four working hours and tenure up to seven years.

Customers can also walk into any ICICI Bank branch or SMS to 5676766 from their registered mobile number to check their eligibility.

For used car loans, ICICI Bank charges a processing fee of 2% of loan amount or Rs 15,000 whichever is lower. Documentation charges are Rs 250. The CIBIL report charges are Rs 50. The Registration Certificate collection charges are Rs 200. Stamp duty is on actuals.

Part prepayment is not allowed for up to 6 months. Part prepayment charge is 6% of loan amount for cases with loan seasoning of 7 to 12 months, 5% of loan amount for cases with loan seasoning of 13 to 24 months, and 3% of loan amount for cases with loan seasoning above 24 months. The minimum amount that can be part prepaid should be equivalent to one Equated Monthly Instalment (EMI). The maximum amount that can be part prepaid should be 25% of principal outstanding.

Do note that part prepayment is allowed only twice during the loan tenure and once during a year.

Full prepayment charges are 5% on principal outstanding or interest outstanding for the unexpired period of the loan (whichever is lower).

Kumar Shankar Roy

Kumar Shankar Roy is contributing editor with RupeeIQ. He can be contacted on contact@rupeeiq.com