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Old 13th September 2010, 18:23   #1
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Default Sundaram Finance: Worth it?

Got an offer from Sundaram Finance for car loan. Same 8,10,10,12 and 12 percent for 5 years as offered by SBI. Further details will be available in a day or two. I will have to check for usual things before discussing further and deciding like:

- EMI for all the five years.
-Processing fee.
-Pre-payment penalty.
-Any provision in the agreement.
-Anything else I am supposed to ask? Kindly suggest?

while what's more important is the experience in dealing with Sundaram finance. What has been the experience of fellow bhpians dealing with Sundaram? That is more important as it will decide whether to go with Sundaram or not. Or else SBI is still there

Kindly help?
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Old 13th September 2010, 18:30   #2
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As a fixed deposit account holder, I am fully satisifed with Sundaram Finance Ltd. Interests are being credited to my bank account exactly on the designated day. I get reminders for maturing FD receipts well in advance. I get post-dated pay orders for matured FDR. But, I do not have any vehicle loan account with them.
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Old 13th September 2010, 18:36   #3
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I got a mail from Sundaram that their tie-up with L&T finance is broken.
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Old 13th September 2010, 19:35   #4
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I strongly agree with Ravi on the FD part;
@Setuniket - you cannot go wrong with Sundaram & they're very professional people & have been in the industry for sometime. I expect their interest rate to be little higher or at par with industry, but definitely not the best to offer in industry. Sinc, they also have a truck financing unit, they know how to deal with people; I mean, their ethics.

You can count SBI for lowest rate of interest than Sundaram. But when it comes to closure or queries, Sundaram has upper hands with service than SBI.

Last edited by aargee : 13th September 2010 at 19:47.
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Old 13th September 2010, 19:47   #5
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There is a major difference between a Public Sector Bank and a Private Financing Company

Private Finance company is founded for the purpose of promotors commercial interests only. The stake holders interest and the risk of financing always drives their decision making. While sanctioning and disburing the finance, these companies are very quick, might want lower margin money or flexible w.r.t. processing fees, creidt rating etc depending on their needs of disbursing the finance.

Public Sector Banks are founded (or Nationalized) by the Govt for taking care of Social or Economic Growth Sector Financing. PSBs are a tool at the hands of govt to engineer or stimulate the needed financing on priority sectors of consumption and demand. PSBs would be inflexible w.r.t the the processing methodology, fees, margin money, processing time, credit rating, due deligence on the valuation etc etc
but they would ensure that RIGHT process is followed.

This difference is not generally perceived during any regular sunshine day.

The real difference is understood by the "finance" receiver on a rainy day, in other words during the loss of job or short term inability to payback your loans. Suddenly the risk becomes amplified manyfolds and the private financing company will quickly jump to attach the relevent mortage by legal and often not legal/unethical means.

whereas the public sector banks are expected to behave more humane and i have seen them indeed behaving like that in several cases.
PSBs are also expected to follow the right process in case of defaults in priority sector lending e.g. Housing, Education, Self Employment Schemes even for Personal financing, etc hence there are leser chances of un-lawful methods of recovery.

If i were you, i will go with SBI anyday than the private lender.

Last edited by StarVegabond : 13th September 2010 at 20:04.
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Old 13th September 2010, 19:58   #6
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Quote:
Originally Posted by StarVegabond View Post
This difference is not generally perceived during any regular sunshine day. The real difference is understood by the "finance" receiver on a rainy day, in other words during the loss of job or short term inability to payback your loans
@Star - Just trying to understand something here; are you saying that in such a scenario, SBI would be more liberal in terms of reposessing the vehicle while Sundaram would snatch it immediately? Or the means of reposessing the vehicle? I couldn't understand & hence the question.

From my understanding, I assume, people like Sundaram, or even ICICI for that matter, would still go professionally, except on credit cards.

I like to understand this.
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Old 13th September 2010, 20:11   #7
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Quote:
Originally Posted by aargee View Post
@Star - Just trying to understand something here; are you saying that in such a scenario, SBI would be more liberal in terms of reposessing the vehicle while Sundaram would snatch it immediately? Or the means of reposessing the vehicle? I couldn't understand & hence the question.

From my understanding, I assume, people like Sundaram, or even ICICI for that matter, would still go professionally, except on credit cards.

I like to understand this.
Hi aargee,

I added more content to my previous post to make my post more clear.
you can read it again.

i never said provate financier WOULD do re-posessing immediately.
I said... they CAN as their interest is towards their stake holders and to minimize the stake holders risk and maximise the returns.

PSBs by thier structure would need more time to re-act, they obligated to follow the processes be it sanctioning, disbursing or recovering. Ofcourse they would recover the vehicle in case of default, but may not be immediately but with right process.

Credit cards are all together different game anyway. I do not wish to get into any discussion regarding credit cards pros/cons, there is already enough information out there

Last edited by StarVegabond : 13th September 2010 at 20:18.
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Old 13th September 2010, 20:16   #8
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Quote:
Originally Posted by StarVegabond View Post
PSBs by thier structure would need more time to re-act, they obligated to follow the processes be it sanctioning, disbursing or recovering. Ofcourse they would recover the vehicle in case of default, but may not be immediately but with right process.
Thanks Star; I guess you spoke what I'd in mind - take a length of time right from approving a loan to closure or foreclosure or reposessing. I got the point.

I guess that, the PSU bank's rate of interest will also be less. I was trying to bring the example of CC to exhibit the extreme means of recovery only.
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Old 13th September 2010, 21:42   #9
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If you default, they will be gentler than ICICI.

But do not expect namby-pamby treatment; that will be reserved for PSU banks.

Edit:- IIRC, SF too takes couple of days for approvals. Most of their loans have to be processed by their head office.

Last edited by BaCkSeAtDrIVeR : 13th September 2010 at 21:43.
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Old 13th September 2010, 22:34   #10
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Sundaram Finance (SF) is one of the best finance companies in the country, and has been operating for over 50 years. SF has a strong asset base, the highest credit ratings and is known for its strong values.

They do not use teaser rates to lure customers or outsource operations to agents - all work is handled by their own team. You can expect due diligence from them but they would be customer-friendly and completely transparent.

My advice - if you can get a loan from SBI with a lower rate of interest, you can try your luck with them. Else, go for Sundaram Finance. And, do share your experience with the rest of us.
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Old 14th September 2010, 18:22   #11
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Thanks everyone for the response.
@J.Ravi: good to know that. Thanks for the feedback...

Quote:
Originally Posted by aargee View Post
You can count SBI for lowest rate of interest than Sundaram. But when it comes to closure or queries, Sundaram has upper hands with service than SBI.
From what DSA has quoted and posted in my original post, Interest rates are almost same, I wanted to know about their working.

Quote:
Originally Posted by StarVegabond View Post
The real difference is understood by the "finance" receiver on a rainy day, in other words during the loss of job or short term inability to payback your loans. Suddenly the risk becomes amplified manyfolds and the private financing company will quickly jump to attach the relevent mortage by legal and often not legal/unethical means.

whereas the public sector banks are expected to behave more humane and i have seen them indeed behaving like that in several cases.
PSBs are also expected to follow the right process in case of defaults in priority sector lending e.g. Housing, Education, Self Employment Schemes even for Personal financing, etc hence there are leser chances of un-lawful methods of recovery.

If i were you, i will go with SBI anyday than the private lender.
+1 to the rainy day part. I'll see the conditions with SF and decide accordingly.

Quote:
Originally Posted by aargee View Post
@Star - Just trying to understand something here; are you saying that in such a scenario, SBI would be more liberal in terms of reposessing the vehicle while Sundaram would snatch it immediately? Or the means of reposessing the vehicle? I couldn't understand & hence the question.

From my understanding, I assume, people like Sundaram, or even ICICI for that matter, would still go professionally, except on credit cards.

I like to understand this.
Quote:
Originally Posted by StarVegabond View Post
Hi aargee,

I added more content to my previous post to make my post more clear.
you can read it again.

i never said provate financier WOULD do re-posessing immediately.
I said... they CAN as their interest is towards their stake holders and to minimize the stake holders risk and maximise the returns.

PSBs by thier structure would need more time to re-act, they obligated to follow the processes be it sanctioning, disbursing or recovering. Ofcourse they would recover the vehicle in case of default, but may not be immediately but with right process.

Credit cards are all together different game anyway. I do not wish to get into any discussion regarding credit cards pros/cons, there is already enough information out there
Quote:
Originally Posted by BaCkSeAtDrIVeR View Post
If you default, they will be gentler than ICICI.

But do not expect namby-pamby treatment; that will be reserved for PSU banks.

Edit:- IIRC, SF too takes couple of days for approvals. Most of their loans have to be processed by their head office.
Thanks backseatdriver, time is not the concern atm. The car I am looking for is available off the shelf and Shraad+Month end would mean a great deal in my hands.

Quote:
Originally Posted by spindoc View Post
Sundaram Finance (SF) is one of the best finance companies in the country, and has been operating for over 50 years. SF has a strong asset base, the highest credit ratings and is known for its strong values.

They do not use teaser rates to lure customers or outsource operations to agents - all work is handled by their own team. You can expect due diligence from them but they would be customer-friendly and completely transparent.

My advice - if you can get a loan from SBI with a lower rate of interest, you can try your luck with them. Else, go for Sundaram Finance. And, do share your experience with the rest of us.
I would definitely share my experience with the forum, meanwhile I am waiting for them to contact in a day or two. If not then SBI is the way to go.
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Old 15th September 2010, 18:14   #12
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Okay another update, it seems Sundaram has chosen to ignore my request for Car Loan quote. I'll get back to SBI then, there are certain queries regarding SBI:

I was told that SBI will prepare DD in favour of the dealer of the amount specified in Proforma invoice by taking in the balance amount from me. What if I get a better deal in terms of cash discounts from some other dealer, then? will I be able to change the dealer? Branch Manager says no? But posts here say otherwise, kindly confirm.
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Old 15th September 2010, 19:07   #13
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Quote:
Originally Posted by setuniket View Post
I was told that SBI will prepare DD in favour of the dealer of the amount specified in Proforma invoice by taking in the balance amount from me. What if I get a better deal in terms of cash discounts from some other dealer, then? will I be able to change the dealer? Branch Manager says no? But posts here say otherwise, kindly confirm.
I think, It is not just with SBI, but all banks, They will process the loan only after you identify the vehicle, dealer, price etc and provide them complete documents viz. Loan papers, Hypothication documents, proof of margin money payment, Praforma invoice clearly stating the cost of the vehicle and the relevent break up of the costs like registration, taxes, accessories etc etc.

the DD will go directly to the dealer and you can get the delivery of the vehicle.

Hence you need to first finalize all your deals including dealer name.
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Old 15th September 2010, 19:23   #14
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Quote:
Originally Posted by setuniket View Post
I was told that SBI will prepare DD in favour of the dealer of the amount specified in Proforma invoice by taking in the balance amount from me.
That is how all banks disburse loans.

Quote:
What if I get a better deal in terms of cash discounts from some other dealer, then?
You will have to identify the dealer upfront, before moving the papers with the bank. The problem will the Proforma Invoice will always be for the company recommended price + road tax + insurance + registration (bribe). This will not vary much between dealers; but they will vary in the amount of cash they return to you after / during delivery. Problem, the cash discount cannot be taken in writing from any dealer. What if they cahnge their mind after taking the DD? You will be left high and dry.

The long and short - this is a chance you wil have to take.

Quote:
will I be able to change the dealer? Branch Manager says no? But posts here say otherwise, kindly confirm.
No, you cannot change the dealer once loan process start. But you can always submit a fresh application and withdraw the first. This is how things worked when I got my car.

Things depend on your rapport with the staffers at the bank. They will usually have an officer designated as Deputy Manager / Assistant Manager (Advance) or PSB. He too has a role in speeding up things.
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Old 15th September 2010, 19:40   #15
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@StarVegabond: Thanks, it means I'll have to run around now.

Quote:
Originally Posted by BaCkSeAtDrIVeR View Post
You will have to identify the dealer upfront, before moving the papers with the bank. The problem will the Proforma Invoice will always be for the company recommended price + road tax + insurance + registration (bribe). This will not vary much between dealers; but they will vary in the amount of cash they return to you after / during delivery. Problem, the cash discount cannot be taken in writing from any dealer. What if they cahnge their mind after taking the DD? You will be left high and dry.
I have invoice from one of the dealers for now, need to talk to others now and see what is finalised.

Quote:
Originally Posted by BaCkSeAtDrIVeR View Post
No, you cannot change the dealer once loan process start. But you can always submit a fresh application and withdraw the first. This is how things worked when I got my car.
Fresh application means fresh processing fee, right?

Quote:
Originally Posted by BaCkSeAtDrIVeR View Post
Things depend on your rapport with the staffers at the bank. They will usually have an officer designated as Deputy Manager / Assistant Manager (Advance) or PSB. He too has a role in speeding up things.
The branch is relatively new(4 months old), young officers and clerk know nothing but the Branch Manager(lady) is relatively experienced and is knowledgeable. She stated that the loan will be processed in 5 working days(looking at the time frame stated here, I doubt). It means I'll have to go to the dealers again first and finalise.
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