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Old 16th April 2013, 13:55   #136
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Default Re: The Cheap Loan or the Smart Loan - SBI Advantage Car Loan

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Originally Posted by keyur View Post
1. You don't have to pay the whole amount. Put in whatever you can. It will help to reduce the interest. You will save depending on what you put in.

2. Whatever you pre-pay in regular loans is lost - gone to the bank! You cannot use it and lose liquidiuty.

3. Whatever you put in the OD account does the same thing as pre-pay, except that you can still withdraw it.

So, in all cases, go for the OD and keep topping it up as much as you can. Read the full article (the first few posts atleast) - various scenarios are given there
Here's an interesting development. Recently I had been to the SBI branch and casually popped a question to them about foreclosing my car OD loan account. I asked them to tell me the amount I would need to pay up for the same. Also the way the EMI paid every month is apportioned towards the OD balance is something I am not able to understand. Allow me to explain with an example:

Say my EMI is 10000 per month. In a conventional loan, at the start of the loan term, the interest portion of the same would be close to 4000 odd while the rest would go towards principal repayment. However if I have dumped pretty much the entire outstanding loan amount in the OD account, my interest cost is only a few hundred rupees and the rest of the EMI should go towards principal repayment.

This should result in a much quicker paydown of principal amount. However when I check my OD account, the amount shown as Drawing Power (I'm assuming this is the principal outstanding) is still showing as an amount which would have been calculated as per a conventional loan repayment schedule. In other words, I should have paid close to 40000 in interest over the last 10 months in a conventional loan, while my actual interest cost in the OD loan account has been slightly over 5000.

The difference of 35000 should ideally have reduced the principal outstanding but it doesn't show that on the internet banking screen. The branch staff also asked me to pay up the balance after calculating the amount off the screen, which I feel is grossly incorrect.

I did not have time that day to sit down and explain to them how I feel the calculations should have been done. But plan to go there to discuss this with them shortly. Thought I'd flag it here before I bang my head with them over this.
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Old 19th April 2013, 02:41   #137
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Default Re: The Cheap Loan or the Smart Loan - SBI Advantage Car Loan

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Originally Posted by nkapoor777 View Post
Here's an interesting development. Recently I had been to the SBI branch and casually popped a question to them about foreclosing my car OD loan account.

This should result in a much quicker paydown of principal amount. However when I check my OD account,
1. Do you really need to close your account? The beauty is in keeping the account topped up and having the liquidity. No point in foreclosing.
2. Payments made towards EMI should be split as per your amortization schedule, considering the current top up amount in the account (consider that as the principal, remaining is the outstanding principal - so check amort schedule value at that amount)
3. Easiest way to close the account is to top it up, and THEN ask SBI to close it. You will not have to pay anything.
4. Do check if there are foreclosure charges for closing earlier than a certain period (say 6 months or 1 year)

Cheers
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Old 19th April 2013, 12:16   #138
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Default Re: The Cheap Loan or the Smart Loan - SBI Advantage Car Loan

But, the issue here is "The difference of 35000 should ideally have reduced the principal outstanding but it doesn't show that on the internet banking screen."

How to check and rectify this, or more critical and complex, make the SBI guys understand it ?
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Old 19th April 2013, 12:33   #139
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Default Re: The Cheap Loan or the Smart Loan - SBI Advantage Car Loan

SBI is giving auto loan @ 1.45% Floating, but with benefits of zero fee on pre-closure and pre-payments.
Axis has a 10.5% fixed rate loan, with some restrictions to pre-closure and pre-payment.

Dear members please let me know if the floating rate is a good idea for a 5 year loan considering the current economic environment.
If the rates start climbing badly then i might end up paying a lot of money.
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Old 20th April 2013, 17:05   #140
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Default Re: The Cheap Loan or the Smart Loan - SBI Advantage Car Loan

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Originally Posted by sumeshmani View Post
SBI is giving auto loan @ 1.45% Floating, but with benefits of zero fee on pre-closure and pre-payments.
Axis has a 10.5% fixed rate loan, with some restrictions to pre-closure and pre-payment.

Dear members please let me know if the floating rate is a good idea for a 5 year loan considering the current economic environment.
If the rates start climbing badly then i might end up paying a lot of money.
in the current economic scenario, the rates are only going to go one way i.e. DOWN. or stable at current rates.

Definitely not up.
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Old 22nd April 2013, 12:44   #141
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Default Re: The Cheap Loan or the Smart Loan - SBI Advantage Car Loan

I just got some very bad news.
I called the SBI marketing team member that was in touch with me about my car loan.
He says that SBI does not allow us to withdraw the money from the overdraft account.

So the obvious question was, what is the point of the overdraft account?
He told me that they have been telling their seniors the same thing but nothing has changed.
He says that one reason for this is the loan process takes more time, to create the account, issue cheque books, provide internet banking options etc.
So to avoid such complications, the have blocked withdrawal from the account.

Can other members confirm this by checking with their SBI contacts?
I was so excited about this product, only to be crushed
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Old 22nd April 2013, 15:36   #142
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Quote:
Originally Posted by rohit0103 View Post
But, the issue here is "The difference of 35000 should ideally have reduced the principal outstanding but it doesn't show that on the internet banking screen."

How to check and rectify this, or more critical and complex, make the SBI guys understand it ?
I guess you looked at the wrong detail on screen
Two points to note :
- overdraft amount ( eligibility to withdraw and how much)
- principal outstanding ( which should reduce as per your payments)

Please have a look and revert , I think this should make you happier than you are now !
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Old 22nd April 2013, 17:18   #143
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Default Re: The Cheap Loan or the Smart Loan - SBI Advantage Car Loan

Quote:
Originally Posted by sumeshmani View Post
I just got some very bad news.
I called the SBI marketing team member that was in touch with me about my car loan.
He says that SBI does not allow us to withdraw the money from the overdraft account.

So the obvious question was, what is the point of the overdraft account?
He told me that they have been telling their seniors the same thing but nothing has changed.
He says that one reason for this is the loan process takes more time, to create the account, issue cheque books, provide internet banking options etc.
So to avoid such complications, the have blocked withdrawal from the account.

Can other members confirm this by checking with their SBI contacts?
I was so excited about this product, only to be crushed
Not true.
Just apply for a check-book for the opened OD loan account, and use them as any regular checks.
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Old 30th April 2013, 01:36   #144
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Default Re: The Cheap Loan or the Smart Loan - SBI Advantage Car Loan

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Originally Posted by rohit0103 View Post
But, the issue here is "The difference of 35000 should ideally have reduced the principal outstanding but it doesn't show that on the internet banking screen."

How to check and rectify this, or more critical and complex, make the SBI guys understand it ?
Ideally, your principal outstanding should reduce. I checked mine and it reduces accordingly.
Also, if you want to close it, don't bother explaining, the guys are inherently dumb. Just top up the account and wait for 3-4 days.
Then apply for closure.
Since they will see that there is no amount pending, they will just close it, so the total interest you have paid till date will be the only interest charged to you - nothing else.

Quote:
Originally Posted by sumeshmani View Post
SBI is giving auto loan @ 1.45% Floating, but with benefits of zero fee on pre-closure and pre-payments.
Axis has a 10.5% fixed rate loan, with some restrictions to pre-closure and pre-payment.
Are you sure it is 1.45% - thats too damn low.

Quote:
Originally Posted by sumeshmani View Post
I just got some very bad news.
I called the SBI marketing team member that was in touch with me about my car loan.
He says that SBI does not allow us to withdraw the money from the overdraft account.
That's grossly incorrect. If you read my entire post, you will see that I have stated that these guys don't know their own processes. There is no solution to that.

So you just apply for internet banking, link your account to your regular account that has a debit card and cheque book and use that account for the withdrawals (after transferring from your OD).
By the way, I have full transaction rights on my OD account and am using the same (read my initial posts thoroughly)
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Old 30th April 2013, 09:08   #145
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Smile Re: The Cheap Loan or the Smart Loan - SBI Advantage Car Loan

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Originally Posted by keyur View Post
Are you sure it is 1.45% - thats too damn low.
Its is actually 10.45% pa for the OD car loan from SBI as per theor website. The website shows a few car loan options, however their interest rates for the used car - is it competetive? Also for the used car - is OD loan account possible? One of my office colleague is interested in knowing the same.
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Old 30th April 2013, 10:16   #146
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Default Re: The Cheap Loan or the Smart Loan - SBI Advantage Car Loan

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Originally Posted by keyur View Post

Are you sure it is 1.45% - thats too damn low.

So you just apply for internet banking, link your account to your regular account that has a debit card and cheque book and use that account for the withdrawals (after transferring from your OD).
By the way, I have full transaction rights on my OD account and am using the same (read my initial posts thoroughly)
Sorry, the rate is 10.45% floating
I spoke to other members of the SBI marketing team, and they say that the product is still being offered. We can choose to have an OD acc. and will be allowed to make withdrawals, just like your are doing now.

One question I have is, is your loan also on floating rate?
If yes, has SBI been proactive in bringing down the rate when RBI had reduced key rates?
When you applied for the loan account, did the agent bring the OD account form? OR Did you explicitly ask for it?

B.t.w, I have decided to go with SBI for the loan. Will apply by May end, because the delivery is suppose to be at that time.

Last edited by sumeshmani : 30th April 2013 at 10:17.
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Old 30th April 2013, 12:13   #147
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Default Re: The Cheap Loan or the Smart Loan - SBI Advantage Car Loan

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Originally Posted by ghodlur View Post
The website shows a few car loan options, however their interest rates for the used car - is it competetive? Also for the used car - is OD loan account possible? One of my office colleague is interested in knowing the same.
The whole point of the OD linked loan is to not worry about the actual interest rate, but rather to manage to get the rate we want. So, even if the rate is 15%, you can manage and make it 5% effective.

If SBI is giving loans for used cars, they should be able to link it to OD. It's just a flag that they have to select. Can they do it - YES, will they do it - I don't know!

Quote:
Originally Posted by sumeshmani View Post

One question I have is, is your loan also on floating rate?
If yes, has SBI been proactive in bringing down the rate when RBI had reduced key rates?
When you applied for the loan account, did the agent bring the OD account form? OR Did you explicitly ask for it?

B.t.w, I have decided to go with SBI for the loan. Will apply by May end, because the delivery is suppose to be at that time.

Frankly, I don't know and I never bothered to ask. I got the rate at about 0.5% higher than normal. But the whole point of getting the OD is to manage the loan, which I did effectively and topped it up within a few months.
So floating or not, it never mattered. I got a very very low effective rate!

Go ahead with the loan - all the best!
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Old 19th May 2013, 06:55   #148
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Default Re: The Cheap Loan or the Smart Loan - SBI Advantage Car Loan

I have a query here : Lets say my car cost 10L OTR including Base+RTO+Insurance+Extd Warranty. 85% means I can get a loan 8.5 L.
But, to the dealer I need to pay 8L only as I will getting insurance done outside and not taking extnd warranty. The dealer has said he can adjust the additional amount against the accesories or he can refund me the balance amount.

So, is there going to be problem in such an arrangement or is it OK ?
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Old 19th May 2013, 18:03   #149
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Default Re: The Cheap Loan or the Smart Loan - SBI Advantage Car Loan

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Originally Posted by rohit0103 View Post
I have a query here : Lets say my car cost 10L OTR including Base+RTO+Insurance+Extd Warranty. 85% means I can get a loan 8.5 L.
But, to the dealer I need to pay 8L only as I will getting insurance done outside and not taking extnd warranty. The dealer has said he can adjust the additional amount against the accesories or he can refund me the balance amount.

So, is there going to be problem in such an arrangement or is it OK ?
As long as the dealer has given you the quotation and is ready to do the adjustments, the bank does not need to know. So yes, you can go ahead. Just don't go asking this stuff to the bank!
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Old 26th May 2013, 23:20   #150
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Default Re: The Cheap Loan or the Smart Loan - SBI Advantage Car Loan

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Originally Posted by sumeshmani View Post
Hi Keyur,
Today I applied for my SBI loan. What do I need to do after the loan is sanctioned to get my OD account?
I ask this because the finance agent at the Renault showroom is also clueless about such a feature.

So i am completely lost and worried if i will get the OD account feature. I have an SBI savings account and the internet banking facility. Thus i plan to link the loan account and the OD account once i get them.

Thanks in advance.
The Renault (or any car sales) agent will not be aware of this. You need to ask him to provide the details of the branch that he is affiliated with. Then you need to take the necessary papers and go to the branch, meet the officer there and ensure that he ticks on the OD option on your application form.

While opening your account, you should tell them that you already have an SBI Account and provide your customer id to them, and ensure that it is entered on the form (in the relevant section).

You should also submit the request forms for linking all these accounts and enabling internet banking over them.

You will need to do some work to get the goods man!
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