ARTICLE: How to get the lowest EMI & the best Finance Deal

supremeBaleno · 7th November 2006, 14:01

Actually, it's sort of like buying fish at the market, with the difference that the haggling is usually done over the phone.

The way I did it was to get quotes from different banks and pit them against each other and finally take the lowest one. Took a little time and effort, but well worth it for the money saved (I paid only 18500 in interest for a 4lakh loan spread over 2 years). Putting that money in a simple bank FD would have fetched me more than twice that interest.

GTS · 7th November 2006, 21:32

Another point: First approach your bank and tell them that you are planning to buy a car and ask for a quotation. The finance options and interest rates for Savings Bank A/c holders, RD, FD customers are much lower than those for others.

After getting the quotes and choosing a particular financier, try to get a pre-approved sum of money (as much as you can afford) from them and then approach the car dealer and tell him that the loan process has been completed, only the name of the dealer has to filled in the cheque....this way the car companies know that you are financially strong and are a definite customer, they will go any lengths to please you. Also you wont have the tension of waiting for the loan process to be approved after selecting your car!

As far as possible do NOT go with car-dealer-suggested-financier as they usually are in cahoots and may charge you extra!

Warm Regards,
GTS

navdeep · 7th November 2006, 22:00

Correct me if I am wrong :

whatever deal ( interest rate ) you strike for loan but interest rate are floating. It may change later.

prabuddhadg · 8th November 2006, 18:03

Quote:

Originally Posted by tsk1979

http://www.bankofbaroda.com/calculators/calculators.asp
This link will help you to calculate your exact EMI based on tenure and rate of interest.
you can calculate using formula too
EMI = {(p*r) (1+r)^n}/{(1+r)^n - 1}

p = principal (amount of loan), r = rate of interest per instalment period, i.e., if interest is 12% p.a. r = 1, n = no. of instalments in the tenure,Y ou can also use `Calculate EMI function' in EXCEL spread sheet.

The simplest formula for working out EMI's is the Excel function "PMT". It works as follows:
=PMT("rate of interest per annum"/"number of instalments per annum, i.e. 12", "total number of instalments, e.g. 60 for a 5 year loan", "loan amount", "any final value at the end of full repayment, which will generally be zero", "1 or 0, where 1 means first instalment at the start of the first month and 0 means first instalment at the end of the first month; usually it will be 1")

Some banks round off the emi's in their favour getting two or three bucks per month.

prabuddhadg · 8th November 2006, 18:05

Quote:

Originally Posted by navdeep

Correct me if I am wrong :

whatever deal ( interest rate ) you strike for loan but interest rate are floating. It may change later.

Car loan rates have been going down steadily, so do not expect to get benefits for existing loan rates.

prabuddhadg · 8th November 2006, 18:10

Quote:

Originally Posted by supremeBaleno

...The way I did it was to get quotes from different banks and pit them against each other and finally take the lowest one. ...

I am in the midst of a tussle with a financier, and will post when things settle down, but let me tell you I did just that, and chose the cheapest (I am a finance person myself) and still I am in a bother. One needs to get everything clarified before one steps in. I had documents, but they still found/created loop holes. I will post in detail soon.

supremeBaleno · 8th November 2006, 18:27

Another thing to keep in mind is to read the set of documents that they want you to sign. Some of the pages are just bull**** and you should refuse to sign them. Also take copies of the pages you signed.

In my case the guy came with a set of docs on which he wanted my sign. Some of them being absurd and not relevant, I refused to sign them. He was like, "Sir, these are standard documents and everyone has to sign them. There is no way our bank is going to give the loan without you signing all the pages." I said, if so I would go to another bank. Then he had me talk to his manager, who tried to feed me some financial jargon and stuff. Asked him to hold it and made it clear that irrelevant pages will not be signed. Finally they accepted and I struck out the irrelevant pages.

One of the declarations that they wanted me to sign was "Even if all the EMI cheques were honoured, they still retain the right to seize my car". What can be more absurd ? I pay them and still have to agree to let them seize my car.

Be aware that the competition is hot in the auto financing industry and the consumer is king, if he knows how to act like a king.

hayasaka · 15th January 2007, 17:17

Got this link while searching for finance availability in india,thought of giving the link rather than doing copy/paste

GA: ABC of car finance

How to get the best deal for your car

What your car dealer won't tell you

cpserrao · 11th February 2007, 11:20

Many thanks for posting this information. Using this information I was able to play ICICI bank against SBI and Citi and negotiate a rate 0.5% less than what was originally quoted. Got an effective rate on 9.65% (after finance payout etc) on 4.75L for 36 months. Managed to lock in the rate before the increase happens.

s0uljah · 23rd February 2007, 08:31

Im a little confused regarding loan values... I havent read any of the loan papers because its being registered in the company name.

The lady at a Hyundai dealership told me that :
Nationalised Banks - Issue loan amount against the ex-showroom value.
MNC's and others - Issue loan amount against the on road price

Im curious because she said I could use the cash discount for in house accessories which they would put in the loan amount ??

moralfibre · 24th February 2007, 07:50

Quote:

Originally Posted by s0uljah

The lady at a Hyundai dealership told me that :
Nationalised Banks - Issue loan amount against the ex-showroom value.
MNC's and others - Issue loan amount against the on road price

I think you got it wrong. Its the reverse. Nationalised banks like SBI give you a loan on the On-Road price of the vehicle whereas banks like ICICI, HDFC, etc. give you a loan on the ex-showroom price.

Nationalised banks are not brand conversant and hence do not discriminate while giving you a loan for any car brand whereas MNC's and others do. Like for example, I got a 90% loan on the on-road price for my Palio through SBI whereas ICICI (cheats) were giving me only 75% on the ex-showroom stating that Fiat is not a well to do manufacturer in their list and they wouldn't be able to process more than 75%.
There was no hassle in procuring a loan from SBI and I got a cheque withing 5 days of application. Only thing you need to take care of is some good and strong documentation.

s0uljah · 24th February 2007, 18:37

Quote:

Originally Posted by moralfibre

I think you got it wrong. Its the reverse. Nationalised banks like SBI give you a loan on the On-Road price of the vehicle whereas banks like ICICI, HDFC, etc. give you a loan on the ex-showroom price.

No actually this is what the Hyundai saleswoman told me and hence the confusion!

Anyway our company cars are being financed with HDFC so they will give us the best rate as an existing customer. Will be booking the swift on Monday!

jango · 27th February 2007, 14:15

Wow how could i miss out on this thread...awesome one, now i know what i need to talk with the bank !!

jobinjv · 28th February 2007, 20:33

Note from the Team-BHP Support Staff : SMS / Slang language is strictly prohibited on this board. Please do type in full and proper english for the benefit of other community members.

We advise you to read the board rules section before proceeding.

jobinjv · 1st March 2007, 19:07

Quote:

Originally Posted by GTO

A discount out of the interest earnings of the finance company.

@GTO

I would like to have a proper understanding about this.IN magazines like Autocar and all its mentioned 4.5% discount on the loan amount.Is this discount that you have mentioned that they are talking about.Is discount on principal that is being asked or on the amount that has been received by them as inerest.

Could a step by step guide be given on the process and documents that are involved in a loan process.

@supremeBALENO

You had stated of one document that you wanted to be removed.Was there just one or more than that.if so please provide information.

sorry asking so many questions but i don't want to flop this process and end up in a mess.

7th November 2006, 14:01	#16
supremeBaleno Senior - BHPian Join Date: Dec 2005 Location: Chennai / Kochi Posts: 5,546 Thanked: 2,697 Times View My Garage	Actually, it's sort of like buying fish at the market, with the difference that the haggling is usually done over the phone. The way I did it was to get quotes from different banks and pit them against each other and finally take the lowest one. Took a little time and effort, but well worth it for the money saved (I paid only 18500 in interest for a 4lakh loan spread over 2 years). Putting that money in a simple bank FD would have fetched me more than twice that interest.
	() Thanks

7th November 2006, 21:32	#17
GTS BHPian Join Date: Jul 2006 Location: Chennai Posts: 69 Thanked: 6 Times	Another point: First approach your bank and tell them that you are planning to buy a car and ask for a quotation. The finance options and interest rates for Savings Bank A/c holders, RD, FD customers are much lower than those for others. After getting the quotes and choosing a particular financier, try to get a pre-approved sum of money (as much as you can afford) from them and then approach the car dealer and tell him that the loan process has been completed, only the name of the dealer has to filled in the cheque....this way the car companies know that you are financially strong and are a definite customer, they will go any lengths to please you. Also you wont have the tension of waiting for the loan process to be approved after selecting your car! As far as possible do NOT go with car-dealer-suggested-financier as they usually are in cahoots and may charge you extra! Warm Regards, GTS
	(1) Thanks

7th November 2006, 22:00	#18
navdeep BHPian Join Date: Sep 2006 Location: Pune Posts: 892 Thanked: 4 Times	Correct me if I am wrong : whatever deal ( interest rate ) you strike for loan but interest rate are floating. It may change later.
	() Thanks

8th November 2006, 18:27	#22
supremeBaleno Senior - BHPian Join Date: Dec 2005 Location: Chennai / Kochi Posts: 5,546 Thanked: 2,697 Times View My Garage	Another thing to keep in mind is to read the set of documents that they want you to sign. Some of the pages are just bull**** and you should refuse to sign them. Also take copies of the pages you signed. In my case the guy came with a set of docs on which he wanted my sign. Some of them being absurd and not relevant, I refused to sign them. He was like, "Sir, these are standard documents and everyone has to sign them. There is no way our bank is going to give the loan without you signing all the pages." I said, if so I would go to another bank. Then he had me talk to his manager, who tried to feed me some financial jargon and stuff. Asked him to hold it and made it clear that irrelevant pages will not be signed. Finally they accepted and I struck out the irrelevant pages. One of the declarations that they wanted me to sign was "Even if all the EMI cheques were honoured, they still retain the right to seize my car". What can be more absurd ? I pay them and still have to agree to let them seize my car. Be aware that the competition is hot in the auto financing industry and the consumer is king, if he knows how to act like a king.
	() Thanks

15th January 2007, 17:17	#23
hayasaka Newbie Join Date: Nov 2006 Location: delhi Posts: 2 Thanked: Once	ABC of car finance Got this link while searching for finance availability in india,thought of giving the link rather than doing copy/paste GA: ABC of car finance How to get the best deal for your car What your car dealer won't tell you Last edited by hayasaka : 15th January 2007 at 17:19.
	(1) Thanks

11th February 2007, 11:20	#24
cpserrao Newbie Join Date: Jan 2007 Location: mumbai Posts: 19 Thanked: Once	Many thanks for posting this information. Using this information I was able to play ICICI bank against SBI and Citi and negotiate a rate 0.5% less than what was originally quoted. Got an effective rate on 9.65% (after finance payout etc) on 4.75L for 36 months. Managed to lock in the rate before the increase happens.
	() Thanks

23rd February 2007, 08:31	#25
s0uljah Senior - BHPian Join Date: Feb 2006 Location: BLR Posts: 2,222 Thanked: 26 Times View My Garage	Im a little confused regarding loan values... I havent read any of the loan papers because its being registered in the company name. The lady at a Hyundai dealership told me that : Nationalised Banks - Issue loan amount against the ex-showroom value. MNC's and others - Issue loan amount against the on road price Im curious because she said I could use the cash discount for in house accessories which they would put in the loan amount ??
	() Thanks

27th February 2007, 14:15	#28
jango BHPian Join Date: Mar 2006 Location: New York & kotayam Posts: 800 Thanked: 23 Times View My Garage	Wow how could i miss out on this thread...awesome one, now i know what i need to talk with the bank !!
	() Thanks

28th February 2007, 20:33	#29
jobinjv BHPian Join Date: Feb 2006 Location: Chennai, Thiruvalla Posts: 126 Thanked: 6 Times	Note from the Team-BHP Support Staff : SMS / Slang language is strictly prohibited on this board. Please do type in full and proper english for the benefit of other community members. We advise you to read the board rules section before proceeding. Last edited by GTO : 1st March 2007 at 09:54.
	() Thanks