Vehicle Finance (Educational Institutions)

get loan under vehicle finance for educational institutions
Vehicle Finance (Educational Institutions)

Learn more about our Vehicle Finance Option for Educational Institutions. The loans under the schemes shall be sanctioned to Educational Institutions which are in operation for at least 2 years or the trustees should have experience of at least 3 years in managing Educational Institution.

Purpose
A. To Purchase:
Vans and Buses and other transport vehicles for transportation of students, for office/ general use of Educational Institutions.
Eligibility
Societies / Trusts / Corporates and other entities running Educational Institutions registered with the appropriate authorities.
The Educational Institution should be in operation for at least 2 years and / or the Trustees should have experience of at least 3 years in managing educational institution.
New institutions may also be considered for extending finances under the scheme. But the same shall be considered only by MD& CEO.
Nature of Advance & Repayment
Purchase of New Vehicles: - Term Loans repayable within a maximum door to door period of 7 years (including moratorium not exceeding 6 months) from the date of first disbursement.
Second Hand Vehicles: - Repayable within a maximum door to door period of 5 years including a moratorium period not exceeding 3 months. The second hand vehicles should not be more than 3 years old and should have a residual life of 1.5 times of the total tenure of the loan as certified by the bank's approved chartered valuer/ panel valuer.
The repayment shall normally be fixed as quarterly / Half yearly installments (in alignment with the fee collection). However monthly interest should be recovered as and when due.
Quantum of Loan
Maximum Exposure to a Single Entity - Rs. 300 Lakhs. However total loan against second hand vehicles shall not exceed Rs. 100 Lakhs to a single entity.
Margin
Margin:
1. a. New Vehicles: 15% of the on road price of the vehicle for new vehicles (including body building cost), b. Second hand vehicles: 30% of the assessed value of the second-hand vehicle by the approved chartered valuer.
Note: On road price of vehicle includes cost of chassis, all accessories including air suspension, audio/video systems, air-condition system, seats, etc, body building cost, Registration Charges, insurance, road Tax and AMC.
Rate of Interest (Floating)
1. Loans for purchase of new vehicles:
  • For Loans Below Rs. 20 Lakhs - BR + 1.00% (11.30% p.a.).
  • For Loans of Rs. 20 Lakhs & Above - BR + 0.75% (11.05% p.a.).
2. Loan for purchase of Second Hand Vehicles.
  • Irrespective of Amount - BR + 2.25% (12.55% p.a.).
  • Note: If Collateral Security cover is above 30% Interest Concession of 0.50% may be provided.
  • Current Base Rate for Lending (BR) is 10.30% p.a.
Security
Primary Security: Hypothecation of vehicle/s to be financed.
Collateral: Only for loans against Second Hand Vehicles - Loans against second hand vehicles should be covered by mortgage of immovable properties to cover at least 30% of loan amount.
Guarantee: Personal Guarantee of the Trustees should be obtained.
Note: For the purpose of collateral securities the surplus value available if any under existing security of immovable property held by the bank arrived at after providing for 150% cover to the existing borrowings, are also permitted to be reckoned.
(Example: If a borrower had offered land and building property valued Rs. 200 Crore for a borrowing of Rs. 100 Crore, the surplus security available is Rs. 50 Crore).
Insurance
The vehicle purchased under the bank's loan should be insured for full value in case of new vehicles or for the value as assessed by the valuer in case of second hand vehicles with bank clause in our bank's favour. Copy of the Insurance policy should be held at the branch.
Penal Interest
Any irregularity or default in repayment will attract penal interest of 2.00% p.a. over and above the above the applicable rate of interest.
Processing Charges
0.75% of the loan amount plus taxes as applicable.
Prepayment charges
At the rate of 2.00% of term loan amount prepaid plus taxes as applicable. Loans closed by way of take-over by other Banks alone will attract prepayment Charges. No pre-payment charges will be levied in case the loan(s) is/are closed by the borrower from own sources of funds.
Other Stipulations
(1)Our Bank's hypothecation charge should be duly registered with the Regional Transport Authority and it should be recorded in the RC Book.
(Note: The vehicle shall be registered either in the name of the trust or in the name of institution. It should not be registered in the personal names of trustees / correspondents, etc.)
(2)Duplicate key and RC book copy should be obtained and kept along with the loan documents. Obtention of duplicate key may be waived by sanctioning authority on case to case basis.
(3) Every year the branch should obtain a copy of the fitness certificate renewed for the vehicle financed.
(4). Efforts should be made to open the operative account of the institution so that loan instalments are directly recovered from the account.
Documentation Charges
Upto Rs. 25 Lakhs - Nil.
Above Rs. 25 Lakhs - Rs. 5,000.00.

All the above Terms and Conditions are subject to change and sanctioning of the loans is at the sole discretion of the Bank. Service Tax on All Service Charges extra wherever applicable.