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Old 18th June 2007, 10:32   #1
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Default Car loan SBI or Kotak ?

Guys Iím looking for car loan of amount 5-6 lakhs, please help me to select best of the following:

SBI:
Rate of interest for 5 yrs: 12.25% (Floating)
Pre-Payment: Can be done after 1 yr for next 1.5 yr (No Pre-Payment after 5/2 = 2.5 yrs)
Pre-Payment or pre-closure penalty: 2%
Processing fees: 0.5 %
Free accident insurance for remaining loan amount.

Kotak Mahindra:

Rate of interest for 5 yrs: 11.25% (Fixed)
Pre-Payment: NA
Pre-Closure: After six months.
Pre-Payment penalty: 5%
Processing fees: 0.6 %

Thanks
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Old 18th June 2007, 11:04   #2
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Hi SX4, I have never heard of floating interest rates for cars. Although I dont deny that it could exist. Well in Nov'06 I took a loan from SBI for my car and got 9.75% for 5 years. Advantages:

1) Loan on On-Road price of the vehicle.
2) Least interest rate I found at that time.
3) Courteous staff who explained everything in detail and assisted in documentation.
4) Least EMI per lakh!

Problems:

1) Processing takes about a week and half
2) LOTS of documents required.

I haven't heard of many good things about Kotak. Hope this helps.
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Old 18th June 2007, 11:10   #3
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If you can manage with preLoan hassles (like document, guarentor etc etc), SBI is anytime better.... You can close down the loan anytime...

But I have never heard of Floating rate on car loan, pls check it, r u sure?

Abhi
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Old 18th June 2007, 11:14   #4
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Originally Posted by akroy View Post
But I have never heard of Floating rate on car loan, pls check it, r u sure?
Abhi
Thanks, Here is the link of SBI car loan stating FLOATING RATES :

STATE BANK OF INDIA :: INDIA's LARGEST BANK

Also, since I have home loan from SBI, no guarantor/ much documents are require and will get discount 0.25%, so effective ROI would be 12% and they said it will take at the most 4-5 days.
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Old 18th June 2007, 11:34   #5
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whats the per lakh Emi for SBI & kotak?
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Old 18th June 2007, 11:48   #6
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Quote:
Originally Posted by akroy View Post
If you can manage with preLoan hassles (like document, guarentor etc etc), SBI is anytime better.... You can close down the loan anytime...

But I have never heard of Floating rate on car loan, pls check it, r u sure?

Abhi
Thanks, Here is the link to SBI car loan stating floating rates:
STATE BANK OF INDIA :: INDIA's LARGEST BANK

Also, since I've home loan from then they will give me discount so effective ROI would be 12 %.

What you guys think of floating rates for car loan, what are the chances of going up or down in the coming years ?

I don't have EMI from banks but EMI calculator gives the following:

For 5 yrs.
EMI/lakh @ 12.25 = Rs. 2,191.28
EMI/lakh @ 11.25 = Rs. 2,141.95
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Old 18th June 2007, 14:23   #7
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hi sx4_2007, so does SBI also have a "fixed" interest rate option? could you check (maybe with them itself) if the "reducing vs flat " is not being confused with "floating vs fixed" terminology here?
Sorry but i dont have any experience with either to support either - though i hear SBI (or any nationalized banks usually) is more preferred for the easy closing vs other banks. But i dont know any data for Kotak.
Cheers.
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Old 18th June 2007, 15:07   #8
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Originally Posted by sithon View Post
hi sx4_2007, so does SBI also have a "fixed" interest rate option? could you check (maybe with them itself) if the "reducing vs flat " is not being confused with "floating vs fixed" terminology here?
Sorry but i dont have any experience with either to support either - though i hear SBI (or any nationalized banks usually) is more preferred for the easy closing vs other banks. But i dont know any data for Kotak.
Cheers.
12.25 % is floating rate with daily reducing balance.

Quote:
Originally Posted by SX4_2007 View Post
I don't have EMI from banks but EMI calculator gives the following:
For 5 yrs.
EMI/lakh @ 12.25 = Rs. 2,191.28
EMI/lakh @ 11.25 = Rs. 2,141.95
There was a typo in my previous post, correct EMI is
EMI/lakh @ 12.25 for 5 yrs = Rs.2237
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Old 18th June 2007, 15:20   #9
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Hi,

This is my first post.

As you are from Pune you can look at bank of Maharashtra. Last week I took loan for my SX4 from them. It was Rs 2212/Lac (11.75%/anum) daily reducing w/o prepayment fees.

Also I enquired at SBI, bund garden Pune, there was foreclosure fee of 2% on principle. That is not there in Bank of Maharashtra.

My two cents

-Om
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Old 18th June 2007, 15:36   #10
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Actually Nationalized banks are a lso going the private way faster than we understand. They are fast loosing that edge that they had in terms of ease of life they offered earlier.

Their charges are becoming higher and higher, and in some cases they are much higher than private banks. This I recently realised when my father said that SBI has told him that they will only issue 25 cheques per year for free. Beyond that they charge Rs.2 for every leaf. On top of that they also charge processing fee and other charges for these extra cheque leaves. They have nowadays started charging for everything including such traditional things like even attesting a signature!

In this case also, if you look at the things they have made things so much more difficult. You can not pre-pay before 1 year. Also, no prepayment is allowed after 2.5 years have elapsed. And in-between when you can prepay it is only for 1.5 years max (out of the total 5 years). They will even charge you 2% for every prepayment or pre-closure.

There are private banks which charge you a penalty for pre-closure but not for pre-payment. And you can utilize that route for early closure without paying any penalty.

I am not playing the devil's advocate or anything. In fact I also used to believe that nationalized banks are better for their rates and ease they offer after the disbursement. However that was till I recently got a reality check with their tariffs and rate cards. At this rate they will loose even the smallest of edge that they ever had.
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Old 18th June 2007, 16:05   #11
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Quote:
This I recently realised when my father said that SBI has told him that they will only issue 25 cheques per year for free. Beyond that they charge Rs.2 for every leaf. On top of that they also charge processing fee and other charges for these extra cheque leaves. They have nowadays started charging for everything including such traditional things like even attesting a signature!
This is the case with almost all of the private banks as well. You dont face this if you have a salary account or similar.

@SX4: dont count EMI based on calculator ask the bank's reps to give you a figure. I have found that these figures often dont match with calulators.
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Old 18th June 2007, 17:00   #12
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Originally Posted by Technocrat View Post
This is the case with almost all of the private banks as well. You dont face this if you have a salary account or similar.

@SX4: dont count EMI based on calculator ask the bank's reps to give you a figure. I have found that these figures often dont match with calulators.
Wow ..don't know what to say...I booked SX4 ZXi on 11th June and I was expecting at least a month of waiting after reading about long waiting for ZXi everywhere. I haven't even applied for loan and today I got a call that one ZXi silver came to the dealer. I think tomorrow I'll rush to SBI and ask them to process my loan fast.
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Old 18th June 2007, 17:17   #13
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Originally Posted by omishra View Post
Hi,

This is my first post.

As you are from Pune you can look at bank of Maharashtra. Last week I took loan for my SX4 from them. It was Rs 2212/Lac (11.75%/anum) daily reducing w/o prepayment fees.

Also I enquired at SBI, bund garden Pune, there was foreclosure fee of 2% on principle. That is not there in Bank of Maharashtra.

My two cents

-Om
Thanks omishra, I already checked with them, problem with them is they are not ready to give loan without guarantor with his 3 yrs IT returns and 3 months of paychecks. I don't want ask someone for all these details.
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Old 18th June 2007, 17:28   #14
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Quote:
Originally Posted by omishra View Post
Hi,

This is my first post.

As you are from Pune you can look at bank of Maharashtra. Last week I took loan for my SX4 from them. It was Rs 2212/Lac (11.75%/anum) daily reducing w/o prepayment fees.

Also I enquired at SBI, bund garden Pune, there was foreclosure fee of 2% on principle. That is not there in Bank of Maharashtra.

My two cents

-Om
How many days BOM took to process your loan ?
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Old 18th June 2007, 17:51   #15
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It took around 1 week to finish everything.
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