[shivasuma]

Originally Posted by amidoc

so the effective rate works out to be 10.50+0.75=11.25. also you dont have to give an advance emi and you can repay the loan at anytime in smaller amounts also. but the rates is floating and is pegged to the base rate hence in case int rates go up your interest outflow could rise.

Nope. The base rate is 9.75. So the effective rate is 9.75+0.75=10.5%. Yes, its a floating rate but I don't expect rates to rise in the next 2 years atleast.

[sriswe]

Hi Keyur,

Wonderful thread, very useful information. I am going to book Fiat Linea and visited SBI branch where I have an account. Manager told that they are no longer processing Car Loan with OD facility. When I told him that I am ready to wait in case of delays and ready to provide any kind of documents and can spare time for visiting their branch or processing center, he quickly called some one in processing center and after that told me car loan with OD is not present now. He says for small amount loans like car loan etc..OD is not processed by the center and it is applicable only for home loans.

How should I proceed further, he says whatever SBI branch you visit Car loan with OD will not be done. Is there any specific name for this scheme or this is just the SBI New car loan scheme with OD facility ?

Thanks,
Srinivas.R

[keyur]

Originally Posted by sriswe

Hi Keyur,

Wonderful thread, very useful information. I am going to book Fiat Linea and visited SBI branch where I have an account. Manager told that they are no longer processing Car Loan with OD facility. When I told him that I am ready to wait in case of delays and ready to provide any kind of documents and can spare time for visiting their branch or processing center, he quickly called some one in processing center and after that told me car loan with OD is not present now. He says for small amount loans like car loan etc..OD is not processed by the center and it is applicable only for home loans.

How should I proceed further, he says whatever SBI branch you visit Car loan with OD will not be done. Is there any specific name for this scheme or this is just the SBI New car loan scheme with OD facility ?

Thanks,
Srinivas.R

Just tell the Manager that you confirmed with Corporate Office in Mumbai (Nariman Point) and they said that it was available. Also, if they still do not agree, tell that you plan to write to the Chairman of SBI for this.

It may also help if you ask the others here who have taken this scheme recently (some are still in the process).

By the way, which place and which branch?

[sriswe]

Originally Posted by keyur

Just tell the Manager that you confirmed with Corporate Office in Mumbai (Nariman Point) and they said that it was available. Also, if they still do not agree, tell that you plan to write to the Chairman of SBI for this.

It may also help if you ask the others here who have taken this scheme recently (some are still in the process).

By the way, which place and which branch?

Will give it a try today, the manager was saying because of some issues with OD accounts (like balance not shown properly, errors in limit updates etc..) they are not processing. But I doubt this, seems they are not ready to take the overhead. I am from Hyderabad, talked to a branch nearby my home. He was sure that I wont get car loan with OD facility from any of the Hyderabad branches because the processing center will anyways reject the application.

If anyone from the forum availed car loan with OD facility recently in Hyderabad, help me with details

Thanks,
Srinivas.R

[nkapoor777]

Originally Posted by sriswe

Will give it a try today, the manager was saying because of some issues with OD accounts (like balance not shown properly, errors in limit updates etc..) they are not processing. But I doubt this, seems they are not ready to take the overhead. I am from Hyderabad, talked to a branch nearby my home. He was sure that I wont get car loan with OD facility from any of the Hyderabad branches because the processing center will anyways reject the application.

If anyone from the forum availed car loan with OD facility recently in Hyderabad, help me with details

Thanks,
Srinivas.R

That's a load of BS from the branch manager. Probably he wants to book this loan in the month end for his targets and doesn't want to go through the slightly long drawn process to book the OD loan (only because they themselves are not aware of what needs to be done most of the time - yes it is a learning process for them as I found out in my case). Insist on getting the OD loan only and pressurize him by saying that you will contact the grievance cell of SBI for deficiency in service.

[sriswe]

Originally Posted by nkapoor777

That's a load of BS from the branch manager. Probably he wants to book this loan in the month end for his targets and doesn't want to go through the slightly long drawn process to book the OD loan (only because they themselves are not aware of what needs to be done most of the time - yes it is a learning process for them as I found out in my case). Insist on getting the OD loan only and pressurize him by saying that you will contact the grievance cell of SBI for deficiency in service.

Checked with another SBI branch and the manager seems to be much worst, doesn't even listen what I am saying, simply told no OD for car loans. Sent a mail to corporate office explaining the situation. No reply till now, lets see how it goes.

Talked to finance guys from tata-fiat showroom, and he is okay with processing for car loan with OD account. Is this same as what is being mentioned in this thread. Keyur, can you confirm ?

- Srinivas.R

[itsprak]

Damn, I am reading this thread only now. I did not know that such OD linked loan account exists.

@Keyur - Thanks for posting this information. You mentioned that for Home loans, such accounts are available in ICICI bank. Can an ICICI Home loan account which is currently NOT OD linked be converted to an OD linked account?

[keyur]

Originally Posted by sriswe

Checked with another SBI branch and the manager seems to be much worst, doesn't even listen what I am saying, simply told no OD for car loans. Sent a mail to corporate office explaining the situation. No reply till now, lets see how it goes.

Talked to finance guys from tata-fiat showroom, and he is okay with processing for car loan with OD account. Is this same as what is being mentioned in this thread. Keyur, can you confirm ?

- Srinivas.R

Write a scathing mail to chariman@sbi.co.in
Write the branch name, the branch manager's name and his mobile number.
Describe the way he was not helpful and also explain how SBI is doing a pathetic job at giving service even when the customer is walking in to give business!

I have no idea whether the TATA guy actually knows anything about the OD account. He might just be trying to close a sale fast, or he might actually know it. When you fill out the form, there is an OD option on the form - ensure that you tick it.

Originally Posted by itsprak

Damn, I am reading this thread only now. I did not know that such OD linked loan account exists.

@Keyur - Thanks for posting this information. You mentioned that for Home loans, such accounts are available in ICICI bank. Can an ICICI Home loan account which is currently NOT OD linked be converted to an OD linked account?

I think that ICICI has closed that scheme - it is no longer available - and I doubt if you could have converted to it even if it was present!

[sriswe]

Originally Posted by keyur

Write a scathing mail to chariman@sbi.co.in
Write the branch name, the branch manager's name and his mobile number.
Describe the way he was not helpful and also explain how SBI is doing a pathetic job at giving service even when the customer is walking in to give business!

I have no idea whether the TATA guy actually knows anything about the OD account. He might just be trying to close a sale fast, or he might actually know it. When you fill out the form, there is an OD option on the form - ensure that you tick it.

Hi Keyur,

Unfortunately due to parking issue which came up unexpectedly, a tight slot, till now only my car is being parked, but suddenly had to share it with another car :(. at my current residence, I am holding on the purchase until I get another slot. Also, I didn't get any response to my mail sent to SBI corporate office. Will give it another try and then definitely send a mail to chairman. I will do the finance process on my own, this gives me complete peace of mind when I had to make the final payment to dealer.

Thanks,
Srinivas.R

[keyur]

Originally Posted by sriswe

I will do the finance process on my own, this gives me complete peace of mind when I had to make the final payment to dealer.

Update : Checked yesterday and confirmed that the OD linked car loan accounts are still on! In fact there were a couple of accounts opened on the same day.

[saketa]

Hi keyur. I had a small query regarding the interest payable. Every month a certain amount of "interest" seems to be debited from my OD account could you explain how that happens?

31-Oct-2012 (31-Oct-2012) DEBIT INTEREST 15,951.47
30-Oct-2012 (30-Oct-2012) BY TRANSFER
NEFT SCBL0036001LB20501210299189MR SAKETA MUSINIPA TRANSFER FROM 3197726044305 33,453.00
09-Oct-2012 (09-Oct-2012) BY TRANSFER
NEFT UTIB0000248AXISI12283020834ABHIMANYU KAMPANI TRANSFER FROM 3197727044304 7,000.00
08-Oct-2012 (08-Oct-2012) BY TRANSFER
INB II07944665 TRANSFER FROM 10000911939 Mr. SAKETA RAJA MUSINI 9,300.00
30-Sep-2012 (30-Sep-2012) DEBIT INTEREST 3,279.45
28-Sep-2012 (28-Sep-2012) BY TRANSFER
NEFT SCBL0036001LB20501209283789MR SAKETA MUSINIPA TRANSFER FROM 3199341044306 2,00,000.00
25-Sep-2012 (25-Sep-2012) DEBIT
REC CL PROCESSING FEE 10,200.00
25-Sep-2012 (25-Sep-2012) BY TRANSFER
TRF TO CL PROC FEE TRANSFER FROM 10000911906 Mrs. CHAYA RATAN MUSI 10,200.00
25-Sep-2012 (25-Sep-2012) DEBIT
LOAN DISB RTGS TO DEALER 20,00,000.00

What exactly does that "Debit Interest mean"? Is that the bank taking interest on a real time basis every month? Assuming I put the whole amount in no interested will be debited? But why did it only debit 3 279 in September as opposed to 15k in October?

[keyur]

Originally Posted by saketa

Hi keyur. I had a small query regarding the interest payable. Every month a certain amount of "interest" seems to be debited from my OD account could you explain how that happens?


What exactly does that "Debit Interest mean"? Is that the bank taking interest on a real time basis every month? Assuming I put the whole amount in no interested will be debited? But why did it only debit 3 279 in September as opposed to 15k in October?

SBI calculates interest on a daily reducing balance. The calculated interest applicable for the entire month is debited once a month.

This interest is a part of the EMI that you pay (rest goes to Principal and hence stays in the OD account). The interest component goes to the bank.
In the first month, as per the amortization schedule, a large chunk goes towards interest - and since you would not have made any substantial payments, the interest component was large.
When you made the payment in the next month, that directly went towards the principal, effectively reducing the applicable interest. Hence the reduced interest component.

[smartindboy]

Originally Posted by saketa

Hi keyur. I had a small query regarding the interest payable. Every month a certain amount of "interest" seems to be debited from my OD account could you explain how that happens?

31-Oct-2012 (31-Oct-2012) DEBIT INTEREST 15,951.47
30-Oct-2012 (30-Oct-2012) BY TRANSFER
NEFT SCBL0036001LB20501210299189MR SAKETA MUSINIPA TRANSFER FROM 3197726044305 33,453.00
09-Oct-2012 (09-Oct-2012) BY TRANSFER
NEFT UTIB0000248AXISI12283020834ABHIMANYU KAMPANI TRANSFER FROM 3197727044304 7,000.00
08-Oct-2012 (08-Oct-2012) BY TRANSFER
INB II07944665 TRANSFER FROM 10000911939 Mr. SAKETA RAJA MUSINI 9,300.00
30-Sep-2012 (30-Sep-2012) DEBIT INTEREST 3,279.45
28-Sep-2012 (28-Sep-2012) BY TRANSFER
NEFT SCBL0036001LB20501209283789MR SAKETA MUSINIPA TRANSFER FROM 3199341044306 2,00,000.00
25-Sep-2012 (25-Sep-2012) DEBIT
REC CL PROCESSING FEE 10,200.00
25-Sep-2012 (25-Sep-2012) BY TRANSFER
TRF TO CL PROC FEE TRANSFER FROM 10000911906 Mrs. CHAYA RATAN MUSI 10,200.00
25-Sep-2012 (25-Sep-2012) DEBIT
LOAN DISB RTGS TO DEALER 20,00,000.00

What exactly does that "Debit Interest mean"? Is that the bank taking interest on a real time basis every month? Assuming I put the whole amount in no interested will be debited? But why did it only debit 3 279 in September as opposed to 15k in October?

You should edit this post and remove the account numbers.

[rohit0103]

Originally Posted by keyur

SBI calculates interest on a daily reducing balance. The calculated interest applicable for the entire month is debited once a month.

This interest is a part of the EMI that you pay (rest goes to Principal and hence stays in the OD account). The interest component goes to the bank.
In the first month, as per the amortization schedule, a large chunk goes towards interest - and since you would not have made any substantial payments, the interest component was large.
When you made the payment in the next month, that directly went towards the principal, effectively reducing the applicable interest. Hence the reduced interest component.

Keyur, as per the analysis, in any loan the interest component is higher in the initial EMIs. So, it would make sense to have the whole amount dumped at start of the loan.

But, what if do not have the complete amount right now, but will be coming across the amounts in parts later ? I can kindda of prepay the loan with such amount, but will it make sense to still go for loan with OD ?

[keyur]

Originally Posted by rohit0103

Keyur, as per the analysis, in any loan the interest component is higher in the initial EMIs. So, it would make sense to have the whole amount dumped at start of the loan.

But, what if do not have the complete amount right now, but will be coming across the amounts in parts later ? I can kindda of prepay the loan with such amount, but will it make sense to still go for loan with OD ?

1. You don't have to pay the whole amount. Put in whatever you can. It will help to reduce the interest. You will save depending on what you put in.

2. Whatever you pre-pay in regular loans is lost - gone to the bank! You cannot use it and lose liquidiuty.

3. Whatever you put in the OD account does the same thing as pre-pay, except that you can still withdraw it.

So, in all cases, go for the OD and keep topping it up as much as you can. Read the full article (the first few posts atleast) - various scenarios are given there