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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-13.html)

HDFC Offer

1. ROI 9.55 %

2. Processing Fee 999

3. Prepayment allowed only twice during the loan duration and up to 25% of the total principal amount and a penalty of 5%

4. Foreclosure after 12 months attracts nothing

Apart from the rate of interest, rest everything is negative about this offer

It seems SBI is the way to go what say Gentlemen ?

Was in the same predicament a few weeks ago. Fixed ROI from HDFC or Floating from SBI. Then read the smart emi thread by keyur and opted for SBI with OD facility. Do search for that thread and read. Also use the amortization schedule in the first post of this thread to calculate interest payout.

Ramit,
You can go with either of this. Both offers are almost same, not much difference.
Don't think too much.

Let us compare the parameters.

1a) Interest rate - No difference at all. For a loan of 5 Lacs for 3 years, EMI @ 9.85% (SBI) is Rs 16,098. For HDFC (9.55%) it will be 16,028. Difference of 70 rupees a month. If the loan is for 5 years, the difference will be about 65 rupees. So really not much. If you want give HDFC a slight advantage. 0.5 points for HDFC

1b) Fixed and floating rate - in case of HDFC you know what you will be paying. In SBI as it is floating rate, it can go up or down. For the certainty, you can give slight advantage to HDFC - 0.5 points.


2) Processing fee - 999 for HDFC and 0 for SBI. Advantage SBI. But it is only 100. So 0.5 points to SBI.

3) Prepayment and foreclosure - SBI advantage. After 12 months, you can close the loan with HDFC also without any penalty. Prepayment with out penalty etc may look like a big advantage now, but in reality, you may not exercise this option, but anyway 1 point for SBI.

4) Documentation and processing - it is great that your company has tie up with SBI and they are ready to come to your office for documentation. HDFC would also do the same. So it is again a tie. 0-0

So overall points - HDFC 1 - SBI 1.5
SBI wins narrowly.

Couple more points. Slightly off topic, but I think relevant.

a) If going with SBI, they may ask you to open an account with them. I think you should. You can transfer money for EMI from your HDFC salary account to SBI account and enable automatic deduction of EMI. You can transfer little extra money every month, for example if your EMI is 13,000, transfer 15,000 to SBI every month (if possible). This will be an automatic saving and at the end of 6th month, you cna use that to do an additional payment for the loan.

b)Even though it looks like SBI is better, there is another thing you may consider. With your salary account with HDFC, getting the loan also from them will improve your relation with the bank. You will be moving up in the customer classification (classic to gold to premium to imperia) and with each level of progression, the facilities and advantage increases. It is good to have a strong relation with a bank. When you are going for a bigger loan (home loan etc), existing relation makes it easier.

Anyway, as I mentioned earlier, there is not much difference between the two offers. Don't spend too much time to decide. Finalise one and go ahead.

And all the best. Have many happy miles in your new car.

Hi @JohnyBoy, Thanks a ton...I think it makes things lot more simpler....I think I will go with SBI as right now, Prepayment is an important parameter I am considering..Thanks once again !

Guys,

Has anyone availed loan from Ford finance for their Ford purchases? Wanted to know specifically if:
1. This is a floating or fixed rate
2. It has a pre-payment penalty / pre-closure penalty
3. % of loan amount
4. Tenure is for 5 years or 3 years
5. How much is the processing charge

Thanks in advance

Is there anything called Stamp duty (@ 0.5% of loan amount) to be paid in case of car loan? I am finalizing a loan from HDFC, ROI is 9.65%, no processing fee, but the showroom guy tells that I need to pay an extra 0.5% of the loan amount in the beginning, which he is calling as stamp duty and claims that it will go to the govt.

There is stamp duty. You will get a receipt also.

Guys,
Need urgent advice. Booked a BMW 320d LCi Prestige. Planning a loan from BMW finance.
Has anyone availed loan from BMW finance for their BMW purchases? Wanted to know specifically if:
1. This is a floating or fixed rate. i am told it will be 9.35% or 9.65%
2. It has a pre-payment penalty / pre-closure penalty (it 2% if done less than 50% emi duration. means if i take loan for 84 months, then pre-payment penalty is applied before 42 months0
3. % of loan amount
4. Tenure is for 7 years or 5 years
5. How much is the processing charge (i am told it is rs 6500/- approx)
while SBI has a offer of 9.85%, No processing charge and No pre-penalty charge.
SBI seems to have more peace of mind.
But the Bird BMW fellow is not giving a Invoice Performa for submission.

Please advice quickly. Thanks in advance

Good Decision :)

I got loan approved from SBH - State bank of Hyderabad, with same terms and conditions of SBI but the ROI was .10 percent higher(negligible).

Normally people think, oh sarkari banks they are not good, but SBH service was WAY WAY better than any private bank, they approved loan super fast, sent all documents for verification over email, they completed formalities (collect signature etc) in my office.

Also, State bank/Govt. Banks don't charge any prepayment penalty, you can pay any number of times!

Hi Dr. Kunal Das , I hope you have purchased the car . I am too looking for the same car from the same showroom and the ROI offered to me is @ 8.75% reducing . They say this is a special scheme from BMW only for this month(i don't know how far that is true)

Kindly share your experience with Bird Automotive . Were they nice and transparent or do they like to play around and hide the facts . Any thing in particular one needs to look out for while dealing with these guys .

Many thanks .

I have a long standing salary account with HDFC with a personal loan in the past. I know that getting an automobile loan from the HDFC would not be difficult at all.

But hearing people say that its always best to get a loan from the SBI for its lower rate of interests and nil pre-closure charges etc, I am now wondering what is the best way to go forward. I do have an active account with the SBI and I had inquired if there are any benefits for being an account holder. I was simply told NO; something very strange :Frustrati

The question therefore goes to all learned fellows out here who has a fair understanding on the basic working on the loan mechanism along with the underpinning and fine prints, Which one is better to go for:- SBI / HDFC and why?

I have PPF account with SBI and salary account with HDFC.

SBI loans typically are of a floating rate type as opposed to HDFC's fixed rate. When the rate cuts happened in the recent years, I benefited due a bit because I was SBI loan holder.

Secondly, SBI loans tend not to have any foreclosure penalties or prepayment penalties. I'm sure you can find finer details on the respective websites.

EDIT: Just noticed that @JohnyBoy has more specific details a few posts above yours. Should've gone through the thread myself. :facepalm:

Same; PPF with SBI and a salary account with HDFC as Preferred customer.

While considering a loan in June, I had a quote of 9.6 from SBI and 9.65 from HDFC. Given that I am a Preferred customer, HDFC waived off the processing fee and early foreclosure fee after 6 months and were flexible with my term (I only wanted a two-year term). The company I work for, made things easier since it is in their Tier-1 list.

Since you have an association with HDFC, that too as a salary account holder, I'd suggest going with them. They are willing to work out benefits.

Also, everything happens over the phone and their agent comes over to collect documents at your residence. All in all, very easy and convenient.

Latest developments with the HDFC is not at all pleasing. For instance, the pre-historic PL that I have with them, is more than a year old. I had inquired for foreclosure viability and was advised of a 4.60% penalty on outstanding amount. The Virtual Relationship Manager also informed the same. :Frustrati

A not so related topic, but HDFC charged Rupees 2.81 for per 700 rupees of petrol filling via their credit card. After much fanfare, they ultimately returned the amount, but I was surprised to find this scrupulous practice prevalent. VRM was again a piece of junk and twitter me helped out. [tweet, tweet]

I would definitely go with HDFC if and only if there is no foreclosure charges after 1 year. But going by their practice, its hard to trust these guys.

SBI does have a pretty lengthy process but to the extent I have been informed by colleagues, if one has all documents ready and organised, then getting a loan is just a matter of days (3-5). Plus with the added benefit of nil foreclosure charges post one year!

Go with SBI eyes closed. I have a salary account with HDFC for the past 17 years. Yet they quoted me a higher rate than SBI where I hold a normal savings account. I specifically mentioned my corporate salary a/c but the sales manager tried to play smart by saying they can give discount on interest rate only if I go for a bigger loan. I outwitted them by getting the loan from SBI at a lesser rate than what was offered by HDFC. In fact the interest rate on my car loan is lower than my home loan which again is from HDFC.

SBI calculates interest on daily rests so if you pay a day earlier, you save interest for one day. Moreover any amount you pay over and above your regular EMI is adjusted against the outstanding principal. HDFC Bank on the other hand calculates interest on monthly rests. So, it doesn't benefit you in any way if you pay your EMI on the 1st of the month rather than the 30th. Basically their calculation is loaded against the customer, unlike SBI who play a fair game. Hence I'd say unless you are able to lock your HDFC loan at atleast 0.5 percent lower than SBI, don't go for HDFC.