Union Bank of India Car Loan Review: Interest Rates @ 7.40%

Union Bank of India Car Loan Review: Interest Rates @ 7.40%

Union Bank of India provides cheap car loans for used and new vehicles alike.

Good for

  • New car purchases
  • Borrowers with CIBIL score of 700+

Bad for

  • Maximum financing for used cars
  • NRIs without guarantors

Editor's Rating

4.5/5.0

With low interest rates starting from 7.40% and a loan tenure maximum of 7 years, the Union Miles car loan is perfect for borrowers who are seeking to purchase a new vehicle. Additionally, the Union Bank car loan for used cars allows eligible applicants to minimise their total cost of borrowing with a low starting rate of 10.40%. Therefore, whether you're seeking to purchase a new or secondhand vehicle, Union Bank is the first stop you should make when comparing car loan interest rates, loan tenures, and eligibility criteria.

Summary of Union Bank of India Car Loan
New car loan rates from 7.40%
Used car loan rates from 10.40%
Low processing fee of Rs. 1000
New car loan tenures up to 7 years

Table of Contents

What Makes Union Bank of India Car Loans Stand Out to Borrowers

Union Bank of India has great car loan deals for borrowers seeking used four-wheelers and new vehicles alike. The lender's interest rates start low at 7.40% and 10.40% for new cars and used cars, respectively. In addition to these cost-saving rates of interest, the lender also has a small processing fee of Rs. 1000, a long new car loan tenure up to 7 years, and a generous age requirement of 18 to 75 years. Our financial analysts recommend Union Bank of India as a top lender to consider for your car loan financing needs, especially if you are seeking a new vehicle.

Union Miles Car LoanFeatures
Union Bank Used Car Loan
  • Interest Rates from 10.40%
  • For vehicles up to 3 years old
  • 5 year tenure
  • Up to 90% margin
Union Bank New Car Loan
  • Interest Rates from 7.40%
  • No maximum loan amount
  • 7 year tenure
  • Up to 60% margin

Union Bank of India Car Loan Interest Rates

Union Bank of India interest rates start at 7.40%.
Union Bank of India interest rates start at 7.40%.

With new car loan interest rates starting from 7.40%, Union Bank of India is among the top 3 lowest interest car loans in the market. Similarly, Union Bank's used car loan interest rates of 10.40% onwards places the lender at the #4 lowest interest car loan amongst the 25 banks we analysed.

Union Bank Car Loan Interest Rates by CIBIL score

CIBIL ScoreUsed Car Interest RateNew Car Interest Rate
Below 7007.40%7.50%
Above 70010.40%10.50%

Your final car loan rate will be determined by your CIBIL score. Borrowers with a CIBIL score of 700 and above will avail the lowest interest rates at Union Bank of India.

Union Bank of India Car Loan Eligibility Criteria

Consider this if you seek a new car loan

Interest Rates 7.40% - 7.50%
Processing Fee Rs. 1000
Margin 85%
Loan Tenure 7 years

Union Bank of India's car loan eligibility criteria is more inclusive than other banks that our financial team reviewed. First, you do not need to be a salary account holder with Union Bank to be eligible for a car loan. Second, while most banks have a standard age requirement range of 21 and 65, Union Bank car loans are open to borrowers between the ages of 18 and 75.

Additionally, Union Bank provides new and used auto loans to resident Indians and non-resident Indians (NRIs). Since most banks limit their car loan eligibility to resident Indians, Union Bank is a good car loan dealer to consider if you are an NRI or Person of Indian Origin (PIO). However, it's important to note that NRIs must have a resident Indian to guarantee their auto loan.

You can find more car loan details regarding loan tenure and maximum loan amount below.

Maximum Loan AmountMarginLoan Tenure
New Car LoanRs. 20 lakhs60% of car valuation5 years
Used Car LoanNil85% or 90% if you are a salaried borrower7 years

If you are a salaried borrower seeking a new car loan, you can avail a 5.00% concession on your margin. This means that Union Bank of India will finance up to 90% of your car valuation, instead of 85%.

Union Bank of India Car Loan Processing Fee and Other Charges

Union Bank of India has a very low processing fee of Rs. 1000, which is good for borrowers who want to avoid extra costs. Additionally, the lender advertises no prepayment penalty charges if the loan is adjusted from a verifiable source. Since most banks charge a prepayment fee up to 3.00% of the outstanding balance, Union Bank is an excellent car loan lender to consider if you wish to pay down your car loan in advance.

Union Bank of India doesn't advertise other fees and charges, therefore you should speak with a Union Bank customer service representative to calculate an estimate of your total cost of borrowing.

Union Bank of India Car Loan: Apply Online

You can begin your car loan application process online, by phone, or in person at a Union Loan Point (ULP). Before you apply, it's important to collect your required documents for proof of address, identity, income and car valuation (if you are seeking a loan for a used vehicle).

Documents Required for Car Loan from Union Bank of India

While Union Bank of India has standard requirements for proof of income, the lender has very flexible requirements for proof of address and income. Below, you can find the required documents for both salaried and self-employed borrowers.

Salaried BorrowersSelf Employed Borrowers
Proof of Identity (any one of the following)
  • Passport
  • PAN Card
  • Employee identity card
  • Any other valid proof
Proof of Address (any one of the following)
  • Electricity Bills
  • Telephone Bills
  • Aadhar card
  • Any other valid proof
Proof of Income
  • Last 1 year ITR
  • Form-16 or letter from employer
  • Last 6 months salary slip
  • Last 3 years ITR
  • P&L and balance sheet
For Used Cars
  • Proforma / Invoice
  • Valuation report from approved automobile engineer

Union Bank of India Car Loan Customer Care

If you have any queries about the Union Bank of India car loan application process, you can contact Union Bank Customer Service.

Natalia Sanchez-Kumar

Natalia Sanchez-Kumar is a Junior Research Analyst at ValueChampion, specialising in loans in India. She is a History graduate of New York University and has worked in the area of social impact, Future of Work and socio-technological research in the US and India. She has co-authored policy proposals alongside the International Labour Organisation in Sri Lanka and the Maldives, as well as hosted a data privacy conference with Facebook in New Delhi.