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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-7.html)

Also, quick question:

Once I transfer a said amount to the OD account, how do I transfer it to my savings account, in time of need?

I don't see an option where I can select this account to transfer from...

By default SB and OD are not linked for online transfers (from OD to SB. SB to OD can be done). You need to visit the branch. Fill some form for this facility. Till then one can visit the branch and manually transfer money from OD to SB.

I take money out of OD only if I have exhausted all other options. So I have not linked these two accounts. And for me to visit the branch and do a manual transfer I should have a really strong reason :)

well, please clarify the below scenario:

I top-up my OD account to the max, say 4L in the below scenario.
After first month emi, say about 10000, the outstanding principle is 3,90,000.

But, my OD account has 4L. So, I can remove the 10K from my OD account, to match the outstanding principle. Similarly, I can withdraw another 10K next month and so on.

If I am not withdrawing this money, then I am parking my money (to the amount of EMI) in OD, for no interest.

what am I missing?

You need to write a letter to the branch manager asking him to give you "Transaction Rights" for the said account.
You also need to "Link" the said account to your already existing Internet Banking user id.

If you do not have an existing savings bank account at SBI, then the process is easier. Just open a new savings bank account, quote this OD account number at the time (THIS IS IMPORTANT) and ask them to ENSURE that both the accounts are linked to the same CIF or Customer ID. Then, ask for Internet Banking access as well as Transaction Rights. You should be done!

But, if you already have an existing account with SBI (other than the OD), there are 3 cases :

1. It is linked to the same CIF as the OD and is also in the same branch as the OD - this is the ideal case, and you are good to go - just ask for the transaction rights from the branch and ask for them both to be linked for internet banking!

2. Same CIF, Different branches - You need to ask the branch having the account which is linked to internet banking (most probably your Savings account) to link your second account (OD account). Prior to this, you need to ask the OD branch to give the transaction rights!

3. Different CIF, Different Branches - You need to ask the OD branch to link the account to the CIF of the Savings account. Then you need to do the same as case 2.

Cumbersome, but once you are done, you don't need to go to the branch again! You may also link the accounts to your debit card!


And, there is a third option, which is much easier !!

Use State Bank Freedom, SBI's Mobile Banking solution. (See the Mobile Banking section in the lower part of the page in Services)
Download their application, get a Mobile Banking User ID, go to any branch and link your accounts and you can start transfers immediately!!

Outstanding principal is now 0! That is the reason that interest will be zero. If there is any principal outstanding, interest will get levied.

Something is amiss here! When your account has 4L in it, you can withdraw the entire 4L. When your EMI of 10K goes in, the withdrawable amount becomes 4.1L.

This is the only part that is correct.
The basic principle of this :
If the amount you deposit is less than your loan amount, interest is levied on balance amount. But if it is greater, you do not earn any interest.
So, keep the amount exactly so that outstanding is 0 (i.e equal to loan amount). Transfer the excess to any other account.

I have got the viewing rights on netbanking for the Car Loan OD A/C. The branch says they can't give transaction rights on this account. Seems like I would need to go there and educate them on this. ;-)

@smartindboy: You can also get a cheque book issued for the OD A/C and use it to withdraw funds when needed.

SBI has reduced their car loan interest rate by 0.5%. The effective rate of interest for new car loans from August 7th is 10.75%.

I took loan from SBI which was disbursed on 25th July. The ROI was 11.25% p.a. I wanted to know if I can ask for refinancing and take the advantage of fresh rates at 10.75%? It is stated very clearly that there are no prepayment charges.

1. Is this for a car (If so, skip question #2).

2. Is the interest rate fixed or floating?
If it is floating, you will get the benefit anyways!

If fixed, you could ask the branch to help you convert it to either an OD linked loan or get the latest interest rate. (As far as I know, this won't be allowed).
The best option would be to make a pre-payment and get the benefit of lowered interest payment in that way!

Thanks for your inputs. This indeed is a Car Loan from SBI taken on a Floating Rate of Interest.

The interest rates have been lowered only for new loans. The existing borrowers won't get this benefit since the base rate has not been changed.

Yes, indeed. I can confirm from my personal experience that the new rates are only for new customers - though existing customers can avail of new rates by paying a fee. Base rate for SBI remains at 10%; only the spread has come down to 0.75% from 1.25%, effective Aug 7th. My agent cleverly logged in my file on Aug 7th clap:

My loan has been approved but not yet disbursed. Still awaiting my car delivery. So will I get the new rate or the older one?

You will need to ask your loan agent. My guess is if they initiated your process before Aug 7th, which seems to be the case, then its unlikely that you will get the new rates.

Rahul

If its just a principal approval you can ask them to give the new rates. If you have not paid anything yet, you can very well cancel and re apply