Loan query - is this loan deal OK (From HDFC)

[BenjiRoss]

I have met AxisBank and HDFC for my loan for the Chevrolet UVA and HDFC works cheaper. I have informed this to Axisbank and they will be getting back to me in the morning.
HDFC deal
Loan Amount: 375000
Tenure: 48 months
EMI: Rs 10000
Flat Interest Rate: 7% (fixed)
Processing charges: 3120

I have a bank account with HDFC.
If Axis gives me a better deal it will be good.
Is this loan deal good or should I bargain more?
I have read the thread on how to get the lowest percentage and its quite useful - just want to know if this offer from HDFC is good at this point in time?

[Fountainheader]

7% interest for 3.75 lakhs over 4 years amounts to 8979/month. So maybe you should cross check the same.

Axis is offering 11.25 interest rate for 5 Lakhs. Its a tie-up with Maruti it seems.

[shankar.balan]

Please before you sign, work out the difference of the money you will pay back!

Flat Interest Rate may sound good but please note that FLAT rate means they will keep charging interest on the total sum borrowed, throughout the tenure of the loan.

If you negotiate with them for a decent rate on DIMINISHING balance basis you will see the difference. All Bank interest rates have gone up considerably owing to the increased PLR (Prime Lending Rate) coupled with the effects of inflation - 15-16% for a new car loan (on diminishing basis) and nearly 18-19% for an Used Car loan.

Please also do check with RELIANCE - they are pretty competitive, hassle free and most importantly, pretty quick and efficient at the moment.

All the best

Originally Posted by BenjiRoss

I have met AxisBank and HDFC for my loan for the Chevrolet UVA and HDFC works cheaper. I have informed this to Axisbank and they will be getting back to me in the morning.
HDFC deal
Loan Amount: 375000
Tenure: 48 months
EMI: Rs 10000
Flat Interest Rate: 7% (fixed)
Processing charges: 3120

I have a bank account with HDFC.
If Axis gives me a better deal it will be good.
Is this loan deal good or should I bargain more?
I have read the thread on how to get the lowest percentage and its quite useful - just want to know if this offer from HDFC is good at this point in time?

[mjothi]

You get a loan for 3.75 lac and repay 4.8 lacs. So you almost pay 1lac in excess.
26250rs per year and they calculate for the actual loan amount (3.75lac) for the entire tenure. Please do check with other banks.

[rkg]

Originally Posted by Fountainheader

7% interest for 3.75 lakhs over 4 years amounts to 8979/month. So maybe you should cross check the same.

Axis is offering 11.25 interest rate for 5 Lakhs. Its a tie-up with Maruti it seems.

are you sure about the Interest rate?
Among PSU banks these are rates as per respective websites

Vijaya bank @12% processing fee Rs 220/lakh

Indian Bank @12.25, P fee Rs 250/lakh

Canara @12.5(fixed),

IOB & PNB @ 12.5%, P fee Rs 168/lakh(IOB), 1% for PNB + Rs 500

SBI @13% P fee 0.5%

[tsk1979]

You are getting 13% interest rate not 7%.
The lowest you can get today is 12.5% I guess from nationalized banks.
Make sure you have everything in written and signed. Learn from my mistake of going with HDFC, and do not make any verbal agreements

[BaCkSeAtDrIVeR]

Always go for a loan which chanrges interest only on the outstanding balance. Which city are you in?

At 7% reducing interest, you should not be paying more than 9000 pm. At 12.5%, the amount is 9,970. At 13%, you are repaying 10,061.

And for closing the loan before the due date, the bank may charege you a fee. Any clue how much is that? (No, I do not want to know it , the point is, do YOU know how much it is?). Also, some old gen. private banks do not revise the interest down when the prime lending rate goes down. AFAICT, State Bank group's interest rates are prime lending rate + some margin. So, when PLR goes down, your interest goes down too.

[BenjiRoss]

Thanks for all your tips.
I am pretty aware of all the numbers.
The diminishing interest EMI worked out overall for 4 years works out about 6000 Rs lesser totally, but the downside is that the initial EMIs (upto the 22nd EMI) will be more and the amount of principal I would have paid at the end of 2 years will be less. So if I need to close early the diminishing will be at a loss comparitively.
HDFC chrges 5.6 % for closure before 2 years and 5% on outstanding principal after 2 years for early closure.
I have checked other banks and most are above this or around these figures. I am not comfortable with a floating rate as the tenure is 4 years - if it increases towards the end I will lose again.

[Fountainheader]

rkg,
There was a Maruti Roadshow at our office today. The sales guy showed me the official email from Axis. The chap also calculated the EMI for 5 lakh loan over a period of 5 years to around 10600. They are charging some 3600 as processing fees though, which is waived off for Axis Bank customers.

[diabloo]

What are the pre-payment terms? If you are closing the loan early, you don't want to pay 6% on outstanding principal, do you?

By bargaining on rate, you might save 50 bucks a month but you will lose 6K per lac when you do pre payment.

[Fountainheader]

Originally Posted by diabloo

What are the pre-payment terms? If you are closing the loan early, you don't want to pay 6% on outstanding principal, do you?

By bargaining on rate, you might save 50 bucks a month but you will lose 6K per lac when you do pre payment.

I haven't checked that yet. But the comparative figures with the current market rates shows savings of around 45k for a 3.5L loan over 3 years or something like that.

Btw, this offer is valid till August 31st. I was planning to buy the Swift Zxi. But there is no stock in Chennai. :(

[rkg]

Originally Posted by Fountainheader

rkg,
There was a Maruti Roadshow at our office today. The sales guy showed me the official email from Axis. The chap also calculated the EMI for 5 lakh loan over a period of 5 years to around 10600. They are charging some 3600 as processing fees though, which is waived off for Axis Bank customers.

Thanks for the reply

for 11.25% EMI should be 10934 not 10600

check here STATE BANK OF INDIA :: INDIA's LARGEST BANK

[Fountainheader]

Originally Posted by rkg

Thanks for the reply

for 11.25% EMI should be 10934 not 10600

check here STATE BANK OF INDIA :: INDIA's LARGEST BANK

109XX only. Sorry for the error