Used car loan rates

[adityapd]

Hi,

Has anyone of you enquired about the loan rates in the used car market offlate ?

I have been making a few enquiries recently and have been getting offers of 7.5 to 8 % flat from the dealers for a 5 yr period for a loan of 2 to 3 L. However when the emi calculation is done the actual rate works out to in the range of 15 to 16 %. ICICI bank is quoting a rate of 13% ( negotiable) for a 5 yr loan of 2.5 L on a reducing basis.

Anyone else looking for such loans / having good offers, can probably put out your experience on this thread for collective sharing and benefit of all.

~A

[dmitri]

I took my car loan from Federal Bank, the interest rate is 12% with processing charge of 0.5% with a minimum of Rs 1500.

SBI has the lowest rate i think, 10.5% and they dont charge any prepayment penalty also. But its not an easy task to get a loan approved from SBI.

[adityapd]

Originally Posted by dmitri

I took my car loan from Federal Bank, the interest rate is 12% with processing charge of 0.5% with a minimum of Rs 1500.

SBI has the lowest rate i think, 10.5% and they dont charge any prepayment penalty also. But its not an easy task to get a loan approved from SBI.

hey one more thing i forgot to add was that second hand loan rates vary drastically with the car make and model....so dmitri it would greatly help if you can quote details about your car, the amount of loan availed, tenure, etc.

~A

[dev]

Hi,
I took from ICICI for Ikon 2001 .
Amount: 2L
Int: 14.01%
Tenure: 4yrs

U need to check whether it is a Flat rate or Customer rate.
Flat rate will be in between 7-9% and customer rate will be above 12%.
Once u fix bank and interest rate, ask him in written for the interest rate and the EMI.

Get couple of quotes from different banks, and then check the total amount you are paying of the entire tenure. Which ever calculates to less amount, go for that.

Make sure u won't get into there trap.
My Exp:
I lost 20K because of my Executive handling.
When I am applying, he told it is 12% and since I have Home Loan with the same bank, they can offer to 9.6%. I agreed and applied. When the EMI started, it is 14.01%. And when questioned, they are saying: 'We are helpless'.
So beware.

[adityapd]

Originally Posted by dev

Hi,
I took from ICICI for Ikon 2001 .
Amount: 2L
Int: 14.01%
Tenure: 4yrs

U need to check whether it is a Flat rate or Customer rate.
Flat rate will be in between 7-9% and customer rate will be above 12%.
Once u fix bank and interest rate, ask him in written for the interest rate and the EMI.

Get couple of quotes from different banks, and then check the total amount you are paying of the entire tenure. Which ever calculates to less amount, go for that.

Make sure u won't get into there trap.
My Exp:
I lost 20K because of my Executive handling.
When I am applying, he told it is 12% and since I have Home Loan with the same bank, they can offer to 9.6%. I agreed and applied. When the EMI started, it is 14.01%. And when questioned, they are saying: 'We are helpless'.
So beware.

some quick questions dev,

1) So far i had heard about flat and reducing interest rates ...however what is this customer rate ?? this sounds pretty confusing for me ...

2) the only way to compare is the emi per lac for the given tenure...so what's the emi u r paying for the 2.0 L for 4 yr period ?

3) and lastly...why didn't u drag them to the consumer court for such day light robbery ???

~A

[dev]

1) So far i had heard about flat and reducing interest rates ...however what is this customer rate ?? this sounds pretty confusing for me ...

There is no confusing. Always Flat rate will be less compared to the rate which they are going to keep(Customer rate) in the Agreement. So, don't fall to those rates. Just ask the EMI in written and compare with other banks.

One example: When I enquired Int., rate for a new vehicle, they told it will be 4%(Tata Finance). I was surprised how it is low. I asked how come the other banks are 7-8%. Then they are telling it is Customer rate and this 4% will work out to be 7.25% or so.

These excecutives always gives and provides false info's. So, be carefull. I won't tell all the excutives. It all depends on our luck.
From the same bank(ICICI), below are the losses I am baring because of someone else fault.
Home Loan: 50K
4 Wheeler loan: 20K


2) the only way to compare is the EMI per lac for the given tenure...so what's the emi u r paying for the 2.0 L for 4 yr period ?

My EMI came to 5486 per month

3) and lastly...why didn't u drag them to the consumer court for such day light robbery ???

I don't have any written proof. Even I took this issue to manager. No use.

[dev]

KEEP IN MIND:
Don't believe what executive says.
Enquire couple of banks and then sign the dotted line. Take your time.
These Sales guys will make all documents sign from u , as if it is very urgent. But in the end, there won't be anything.

And check for Festive offers from Banks. and there will be a very crucial point. Ur application should get approved from concern people and they have to release the promised amount. Then only the festive offer rate is applicable.
So, guys, be aware.

[moralfibre]

Originally Posted by dmitri

SBI has the lowest rate i think, 10.5% and they dont charge any prepayment penalty also. But its not an easy task to get a loan approved from SBI.

Why is it difficult to get an approval from SBI?

[dev]

Since SBI is a National bank and they take there own time.
But in Festive saeson, they are fast.
I prefer SBI. Complete Transparency.

[Xsailor]

Hi Guys,

Umm...14% is Chori

The Devil, as usual, is in the details. Is the loan on x% rate on 'Reducing' or 'flat' rate.

I was, about a year ago, in dire need of cash. Instead of taking a Credit Card/Personal loan, I just assigned 4 of my LIC policies to the bank and opened a CashCredit account with them (With the Surrender Value[SV] of the policies as the collateral). I was able to negotiate a rate of 9% (no additional charges!).

The best part is that I only pay interest on the amount I withdraw and the moment monies are deposited back in the a/c, the interest ceases to apply. The bank charges for the number of days you use your limit.

So, if the SV is fairly OK (in my case it was about 5 lacs), you actually have a reserve of 5 lacs in a bank account, with a chq book, which you can use for anything that you desire and for which you pay interest only for the duration you use the limit.

Hope that provides another option to work with.

Cheers

[moralfibre]

http://www.outlookmoney.com/scripts/lns001c1.asp

Just browse as much content as you can and you will be able to get some idea of how the entire process works.

[dmitri]

Originally Posted by adityapd

hey one more thing i forgot to add was that second hand loan rates vary drastically with the car make and model....so dmitri it would greatly help if you can quote details about your car, the amount of loan availed, tenure, etc.

~A

the loan was for my esteem 2004 model, loan taken on june 2005. It was for 1.7 Lakh, with an EMI of 4477(my magic number :-)) for a tenure of 48months. The processing charge was 1500Rs.

The loan rates for used cars were fixed for all cars(regardless of the car make and model) with Federal Bank.

[dmitri]

They wanted more processing time and more documents, They also wanted a guarantor who owns some land here in bangalore.

[adityapd]

Originally Posted by dmitri

the loan was for my esteem 2004 model, loan taken on june 2005. It was for 1.7 Lakh, with an EMI of 4477(my magic number :-)) for a tenure of 48months. The processing charge was 1500Rs.

The loan rates for used cars were fixed for all cars(regardless of the car make and model) with Federal Bank.

Dmitri,

That transalates into a 12% effective rate of interest for you

~A

[adityapd]

Hey guys,

for those of you who are interested in acquiring a used car finance, there is a special festival bonanza on offer these days from Punjab national bank with used car loans being offered at an all time low rate of 7.5% for a 5 year period. The emi per lac works out to be 2004 per lac for a 5 yr period and frankly speaking i haven't heard of a better offer than this in the used car market.

Su hurry, those of you who are interested get in touch with your nearest PNB branch as the offer gets over on 31st Dec.

~A