[sohu9]

SBI has reduced the base rate effective from 1st Jan 2018. I understand this will impact positively on the existing loans that are not tagged to MCLR rate. However the rates for the new car loan remains the same.

Any chance that the rate for the new loan will also reduce in the next few days? Also, any indication whether other banks will follow SBI to reduce their rates?

[avingodb]

SBI car loan rates have been increased recently from 8.75 to 9.25 %. May come to 8.9 if your CIBIL is greater than 750. Don't understand why there is an increase despite lowering base rates recently.

[srikanthmadhava]

Originally Posted by keyur

The SBI Advantage Car Loan is a Loan Scheme that has an Over Draft (OD) account linked to the loan account.

Hi,

I see that SBI has started taking pre-closure and pre-payment charges for auto loans. I am not sure if it was a recent change, since my friend who had taken sbi car loan around 3 years before did confirm that he had no pre-payment charges.

https://bank.sbi/web/personal-bankin...rms-conditions

Most Important Terms and Conditions PDF

Pre-Payment penalty: -
Charges @1% on part payment amount (plus GST) will be levied quarterly in Fixed Interest rate car loan if prepaid within 24 months from the date of disbursement.

b. Foreclosure Charges: -
Foreclosure charges for Car Loan under Fixed rate of Interest will be recovered @3% on closure amount (plus GST) will be levied if foreclose within 24 months from the disbursement of loan.

• Is the overdraft account on loan facility still available with SBI car loans? Any change in the interest rates compared to normal loan or additional charges for the same?

• If yes, how does the calculations happen?

1. Do they consider the deposit in the OD account as pre-payment and thus charge pre-payment penalty for the same?

2. Do they not consider the deposit in OD as pre-payment (since the EMI's are still happening as normal and no additional payment on top of EMI has been made to the bank). In this case, the final emi tenure will reduce since the deposits in the OD account will reduce the interest rates.

I am planning to take a 5-year loan for my new car purchase. I had some additional funds planned for an investment which I would be making within a year time. So, for next 1 year, I was planning to park those funds in the auto loan OD account and make my emi payments as scheduled.
SBI terms state that pre-payment and pre-closure charges are applicable if done within 2 years of disbursement. I am not planning to close my loan within 2 years, nor pay additional emi's within the 2-year period. But would prefer to use the OD facility and reduce my interest payout.

Thanks in advance.

[vharihar]

With interest rates heading south, does it make sense to switch car loans? (despite the hit of prepayment penalty)

I see a lot of articles on refinancing/renegotiating home loans, but none on car loans.

Thoughts?

[K_Drive]

Originally Posted by vharihar

I see a lot of articles on refinancing/renegotiating home loans, but none on car loans.

It is not easy to transfer car loan to different bank. When you transfer car loan to new bank, latter will consider it as used car loan and interest rates will be high. So no point in transfer. I recently checked with HDFC for transferring car loan from SBI.