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-   -   The Cheap Loan or the Smart Loan - SBI Advantage Car Loan (https://www.team-bhp.com/forum/indian-car-loans-insurance/106710-cheap-loan-smart-loan-sbi-advantage-car-loan-4.html)

you can also try other nationalized co-operative banks.
some of them offer an unique facility of part prepayment of loan without any penalty.
also, you can if you like, take a 7 year tenure. but by smartly making part prepayments now and then, you can go so far as to reduce the tenure to 3.5-4 years!
some of their programs are far better and certainly far more transparent than anything these private banks can come up with, even the private banks bullet payment programs dont help in reducing the loan tenure or the effective rate of interest - basically the nationalized and nat co-op bank loan terms are far more consumer friendly than those given by the private banks.
think on it, do some more research and then move ahead.

Brilliant, brilliant scheme and an even better explanation! Thanks mate!

I'm thinking of availing this loan in the next couple of days but had a question.
I spoke the loan guy at SBI a few minutes ago and according to him, if I deposit the entire principal amount back into the account after a week or so, the account apparently gets closed automatically after a month.

Is this true?

I have enough cash for an outright purchase but some due to some unplannable impending expenditure, I'd like to have access to the money. This loan makes it possible but only if the account does not get closed.

Thanks in advance,

WL

Latest update:

SBI increased the eligible income limit for the car loan from 1L to 2.5L:Frustrati, more details in the link. The reason for this is attributed to car loans being defaulted thereby increasing the bank's NPAs.

Want a car? SBI to offer loans to those who earn at least Rs 2.5 lakh a year - The Economic Times

Is this smart loan for 2 wheels(bikes) also ? .Has any one taken this loan to get a 2 wheeler purchase ?.Please post your experience.

One more thing thats bugging me is that :

Will we be eligible for tax excemptions for interest and principal paid on the loan taken.

Just wondering !

True, but I dont think that this would be an issue to the users of this scheme, as less than 1L per annum (on paper) income would probably not be eligible for this scheme anyways.

I have topped up this loan more than 4 months back, but it is still open. The loan cannot be closed till such time that the tenure expires or I decide to explicitly close it. If they do so, you can happily sue them!

Not applicable for 2 wheelers (even expensive ones)

No exemptions on tax - car and car loans do not come under any kind of tax exemptions, unless it is a company purchase (wherein you can claim depreciation), but this scheme will not be available in that case.

I was thinking about the extension of same concept for Homeloans. Pardon the mis communication

A similar thing exists for Home Loans - that is called as Max Gain in SBI. All the exemptions apply for that one. (1 lac principal + 1.5 lac interest)

Does this SBI Advantage Car Loan processed like normal car loan...... like is there any stringent checks ? Actually I am having about 5L and planning to go for 7L Car. So just thinking to go for 2L normal loan or 5L Advantage loan :confused:

SBI will perform all regular checks like :
1. Loan history, ongoing loans etc
2. Customer profile, income details etc

The ideal thing would be to go for a 5-6 lakh adv car loan, then dump the ready cash into the account.

Keyur,
Good Article. Still lot of confusion. I would be doing some number crunching and will post some figures if I come to a conclusion.
Few queries,
1. Can deposits & withdrawals be done by NEFT, cheque , cash ?
2. Will debit cards and online banking with fund transfer be given?

Yes. You can do transactions (deposits and withdrawals) via NEFT, cheque and cash. I am saying this as I have done all of the above.

You can link the account to your online banking or get online banking activated for the account (if you already don't have online banking on another account). If you already have a debit card, you can get the account linked to the same. Need to confirm about a new debit card.

I asked about this loan at ST Marks Road branch Bangalore and the lady (Asst Manager) mentioned that the rate of interest is 0.5% higher but she would not give me this option, mentioning that there is some 'system problem' in issuing the cheque books for this account. Effectively she said you will not be able to draw money out of the account but you can deposit, and will end up paying 0.5% more for nothing.

Not sure why but I think they are not interested in giving this option to customers. I ended up getting the regular loan for 84 months at 12% with a 0.5% processing fee, they are offering 85% on-road finance (they will fund 85% of the dealer invoice including road tax insurance accessories etc)

All you had to do was insist on it! Though you would not have been able to use the cheque book, you could have done it online (I do it, and can confirm that it works!) The 0.5% overhead can be compensated for on day one itself by just putting in a few thousand rupees as a top up!

There is no point in prolonging a car loan upto 7 years otherwise - you will lose a lot of money if you stay the full term or you will end up foreclosing it sooner!