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-   -   ARTICLE: How to get the lowest EMI & the best Finance Deal (https://www.team-bhp.com/forum/buying-car/18526-article-how-get-lowest-emi-best-finance-deal-12.html)

I'm currently on the lookout for a good finance scheme, and based on many forum posts, it seems like government banks give the best deals around. I found SBI offering interest rates of 10.75%. Anyone know of anything better?

Hi,
I'm going to purchase Grand i10 Asta(O) Petrol with delivery on Diwali 2014.
http://www.team-bhp.com/forum/hatchb...ml#post3539041

I'm going to get the car financed with loan amount of Rs. 5 lakh.

Rate of interest (ROI) I'm being offered is:

HDFC: 10.5% Fixed
Axis: 10.85% Fixed
SBI: 10.45% Floating

Axis is out of the question.
So it's either SBI or HDFC.

I calculated EMI using the Loan Amortization Chart given in this thread, which by the way is very helpful for info as well as for haggling with bank agents.
But it does not have any option for calculating EMI on floating ROI (I think).

Moreover, today I read in Times of India (Delhi) that next month, due to festive season, car loan interests might come down.

So should I wait till then or should I apply for loan right now?
What do you suggest?

Hi ,

I am planning to take car loan from SBI and through one of the agent at dealer mentioned EMI 0f 3248 per lac for 36 months. They say the interest rate is 10.45% floating and 800 as stamp fees. There is no service charge. Is this OK? Pls advise.

Regards,
Gopi

The EMI seems to be ok.
You can try the excellent Amortization Schedule attached in this thread for reference.

However, stamp fees is way too much.
I recently enquired my SBI branch for car loan who said that stamp fees for car loan for 5 lakhs would not be more than 100-150 rupees.
The agent at dealership is trying to fool you & make easy money.

I just applied for car loan from SBI and the interest rate was same, processing fee waived off under a new circular till end of the year. Stamp paper charge doesn't make a differece and is nominal. My EMI is different as it is a 7 years loan which I plan/hope to close in a couple of years. The advantage with SBI is that we can make any partial payment anytime and also preclose the loan, both with no penalty or restrictions. ICICI was also offering the same interest rates, but no flexibility with partial prepayments as well as a fee of 4.2 percent for preclosing. For me it is easy to get an ICICI loan, but difficult to get out. With SBI, had to submit a lot of documents, but gets more flexibility.

Keep in mind, the car loan being offered by SBI is on floating rate of interest.
Meaning, if base rate (currently 10%) goes up, then u'll have to shell out more amount in lieu of interest.
As per SBI website, one can see that 10% base rate has been the highest in past 4 years and there no knowing if it won't increase.

See if u can get an equivalent ROI from HDFC or other private bank.
If you're an individual taxpayer (and not corporate/businessman to avoid TDS woes), then you can also try an NBFC. They also offer very competitive ROI.

I've been offered 10.5% ROI for 3 years 5 lakh loan by HDFC. I'm in the process of negotiation regarding waiver of processing fee.
SBI is my second choice.

Im thinking of buying a Celerio CNG this sep. Will save 2 lakhs for downpayment by then and rest by loan .I would like to pay as less interest as possible so duration maybe 2-3 years. However by jan-march next year i'l have a extra lakh or two if my home sale goes through. will i be able to prepay the loan and save majority of interest being paid to bank ? or do they take interest first and then emi start ?

I am thinking of taking car loan either through SBI or HDFC. I have a question regarding repayment.

Currently options are to give post dated cheques or auto debit from bank account.

Is it possible to pay monthly loan instalment via credit card or charge card?

No - you cannot payback a loan using a credit card - unless you withdraw cash using it and deposit in branch (which can be prohibitively expensive)

Hi Everyone,

I am planning to buy Grand i 10 Next month (Asta O)

I have a salary account with HDFC and saving account with both HDFC & ICICI

I have read a lot about SBI but do not hold any account with them

I am most interested in foreclosure of the loan and wanted to know few things

1. HDFC website claims no foreclosure charges after 12 months.....What If I pay certain amount and not full?..Will there be interest charged?

2. SBI as I understand offers floating interest rate..WIll it be wise to go for it?

3. As interst rate is largely the same across banks which 9.85%, Which Bank should I choose considering that I would like to close my loan in about 2 years?

Thanks

Cheers

Ramit

SBI. Period.

No prepayment penalty.

No processing charges till 31 st December.

A little lower interest rate for females.

SBI definitely has its advantages - as drsingh mentioned - no prepayment penalty, no or low processing fees and slightly lower rates than private banks. Also absolutely no hidden charges. But the process and documentation can be more tedious.

Ramit, as you have salary account with HDFC, that may be good option. You talk to your relationship manager and he will be happy to help you. If you don't have a personal relationship manager, check with your HR team, they will give you the corporate relationship manager.

Advantages of HDFC - they will come to your office to do all documentation. With salary account with them, documentation will be easier. Like SBI they also don't have any hidden charges.
Prepayment penalty - after 12 months, no penalty. This should be fine.
Processing fees - if your company has good relation with them, they may waive it off or can make it flat Rs 1000 irrespective of car value.
Interest rate - will be more or less similar to HDFC.
I have taken 2 car loans from HDFC and this is based on my experience.

Where are you reading this? I can see in their FAQs that there is a small pre-payment penalty.

http://www.hdfcbank.com/personal/faq...8mipa-gts8mipb

Thanks, I will check with my HR, and will also get in touch with SBI

Update : After I spoke with my HR, I got to know that we have a corporate tie up with SBI too. I called up the SBI executive and he offered me following points:

1. Zero Processing Fee
2. Rate of Interest : 9.85%
3. Zero prepayment / foreclosure penalty or interest

I clarified the prepayment and foreclosure point and he committed that SBI charges interest on the actual due amount, Hence you can pay additional amount as and when you want apart from the fixed EMI's and interest will be levied on the actual due amount, Hence it is beneficial for you to pre pay or foreclose the loan amount (In fact I was surprised to hear that as mostly Banks discourage foreclosing the loan but may be he was being direct since he knew about the corporate tie up)

One catch : The ROI is floating which means I may end up paying more in case ROI goes up in future. I countered him with this point that HDFC and other Pvt banks offer fixed ROI. I couldn't really understand his explanation but in the nutshell he said you will end up paying higher 'effective ROI' with HDFC & others.. Any idea any one?

Documentation is not a challange as he is ready to provide all services at my office and just three set of documents - Form 16, Salary Slip and Quotation from the dealer, I believe others would be Address and Id Proof max...

Clarified with HDFC - Prepayment is allowed only twice during entire loan duration and 5% interest is applicable. Foreclosure after 12 months attracts nothing