[askids]

One question on the SBI loan - since they finance 85/90% of the OTR (including accessories upto 25k), is it possible to get the accessories from local market(after car delivery) and not the dealer? or is it like, I have to buy the accessories from the dealer itself if as even the accessories are being financed?

[ank1477]

I had my loan approved and disbursed within 10 days from SBI Thakur Village Mumbai. Initially I was apprehensive but realised that the people were pretty efficient. A big thumbs up to them.

[MileCruncher]

Originally Posted by jinojohnt

Another thing I noticed is that when you pay more than what is needed for a particular month, you expect the principal to reduce, but they accomodate the surplus as advance payment of (future) interest. You need to specifically write to the bank (and fight for it too) to use the surplus amount for reducing the principal amount.

Which bank are we talking here? Because as I know, SBI is the only bank that works on daily diminishing rate of interest and you are suggested to make lump sum payment after the initial 1 year. Please check with your bank and revert if necessary.

Originally Posted by askids

One question on the SBI loan - since they finance 85/90% of the OTR (including accessories upto 25k), is it possible to get the accessories from local market(after car delivery) and not the dealer? or is it like, I have to buy the accessories from the dealer itself if as even the accessories are being financed?

Well the 25k accessories should be included in the proforma invoice for SBI to process the OTR. You can always buy them from outside.

Originally Posted by ank1477

I had my loan approved and disbursed within 10 days from SBI Thakur Village Mumbai. Initially I was apprehensive but realised that the people were pretty efficient. A big thumbs up to them.

We had an existing car loan with SBI which we pre-closed and took two new ones. Pre closure charges waived. Papers submitted on Wednesday amidst the year end rush. Approval received on Monday considering we had a deviation of two loans simultaneously on a same name.

A big thumbs up to SBI

[souravdebiswas]

Hi,

I had approached SBI for a car loan. They are charging me 11.25% (reducing balance) on a floating rate basis. Effectively, my 10 lakh loan requirement makes it a monthly EMI of Rs. 21870 (for a 5 year loan). There are no prepayment charges or processing charges. The DSA who is getting everything done, (and he is really quick and efficient) is taking Rs.10,000 from me (extra for his service).

HDFC has offered by a fixed rate loan of 13.75% for 5 years which make the 10 lakh loan come for an EMI of Rs. 23000. Plus a processing charge of atleast 4000 - 5000.

Can someone please suggest which would be a better one to take?

By the way, the SBI sanction letter is already with me. So its for me to decide now whether to accept the draft or not.

My concern is that if I take HDFC, the excess monthly EMI I will be paying is Rs. 1130 which makes it Rs. 67800 extra over a period of 5 years.

Whereas if I take from SBI, I save Rs. 57800 (67800 - 10000) over a period of 5 years.

But what is the implication of a floating rate (from SBI)? I know if the rate changes then I have to pay higher EMI, but then what are the chances of the rate increasing, and by how much? Will an increase in the rate off set the saving that I will make?

Would really appreciate if someone can urgently advise since my car delivery date is imminent and I have to finalize the loan.

Regards,

Sourav

[souravdebiswas]

There is one more point I wanted to add. After reading all articles, it seems fixed rate becomes better compared to floating rates since usually the difference is 0.5-1%. In such situation, any rise in interest rate of more than 0.5%-1% actually make the floating rate more expensive than the fixed. And such rise can be expected in 6months to about a years time in current situation.

In my case, HDFC will not offer me lower than 13.75% on fixed rate since the car I am booking is a C segment car (Safari VX 4*4). They are willing to offer 11.5% fixed on Scoprio but not on Safari (though I am a salary account holder and have an exisitng car loan with them).

So effectively my benefit currently is 2.5%. The floating rate will become more expensive for me (compared to the fixed rate HDFC is offering right now) only when the floating interest rate rises more than 2.5%. I really do not forsee such huge rise in interest over the next 3 years atleast. Maybe 1-2% maximum increase, which in any case still makes the floating rate cheaper for me.

I hope I am getting the logic right and therefore feel that the floating rate from SBI seems to be a better option for me at present. Please correct me if I am wrong.

[MutantX]

I had mine approved in 4 days flat in SBI PBB Bazullah Road - Loan officer - T.Gopalan. Submitted the papers on Saturday and the loan was approved and DD was ready on Wednesday. SBI with its core banking application have integrated the loan approval process with the central credit rating engine. All loans are approved online.

Scheme: Zero processing fees (80 rs collected for stamp paper).
Interest rate: 11.25% fixed
Loan Tenor: 7 years (1705 rs / year @ 7 years)

[joshguy]

Originally Posted by MutantX

I had mine approved in 4 days flat in SBI PBB Bazullah Road - Loan officer - T.Gopalan. Submitted the papers on Saturday and the loan was approved and DD was ready on Wednesday. SBI with its core banking application have integrated the loan approval process with the central credit rating engine. All loans are approved online.

Scheme: Zero processing fees (80 rs collected for stamp paper).
Interest rate: 11.25% fixed
Loan Tenor: 7 years (1705 rs / year @ 7 years)

Do they have 0 processing plans? and do they give 7yrs tenure for swift

The Interest seems to be low ,all other bank were charging 12-13 or and above till diwali

[MutantX]

Originally Posted by joshguy

Do they have 0 processing plans? and do they give 7yrs tenure for swift

The Interest seems to be low ,all other bank were charging 12-13 or and above till diwali

Yes Ram. SBI has zero processing fee scheme till the end of this year. The scheme is Zero processing, Zero pre closure charges, any time pre closure as there are no restrictions. I had asked for 3 years tenor only since the loan amount was just 25% of the total OTR but the manager was kind enough to grant for 7 years as my EMI will stand at just 2.5k/month.

But anyways I had given an SI for 5k to be deducted every month from my SB account to be able to close the loan within 3 years. I always can adjust the EMI payed by modifying the SI amount. It is easy for me as I have been banking with SBI for nearly 8 years.

Let me know if you need a contact, PM me for further details on the manager in contact.

[souravdebiswas]

Are you sure its a fixed rate of 11.25%. The loan paper I signed with SBI stated that its a floating rate of interest (i.e. 0.5% less than the SBPR (SBPR may fluctuate)). You may want to check it once again.

Mine was 11.25% too.

[MutantX]

Originally Posted by souravdebiswas

Are you sure its a fixed rate of 11.25%. The loan paper I signed with SBI stated that its a floating rate of interest (i.e. 0.5% less than the SBPR (SBPR may fluctuate)). You may want to check it once again.

Mine was 11.25% too.

Let me check. I had asked for 11.25 Fixed as this was the scheme that was available with SBI. Let me check the loan papers and get back to you.

[souravc]

Stay away from HDFC Bank - here its a no brainer , SBI is the way to go.
1. Fixed rate at these high rates does not make any sense . Your car loan would be for 5 years and these unsustainably high rates is more likely to go down rather than staying so high during these 5 years so opt for floating rates .
2. HDFC takes high processing fee , do not trust them with any cheque even if they say ' we don't bank the cheque till you avail the loan '. They do not keep their word
3. Why should you pay the DSA ? Refuse to pay him any commission ( he gets from the bank ) and deal directly with SBI

Cheers
another Sourav

Originally Posted by souravdebiswas

Hi,

I had approached SBI for a car loan. They are charging me 11.25% (reducing balance) on a floating rate basis. Effectively, my 10 lakh loan requirement makes it a monthly EMI of Rs. 21870 (for a 5 year loan). There are no prepayment charges or processing charges. The DSA who is getting everything done, (and he is really quick and efficient) is taking Rs.10,000 from me (extra for his service).

HDFC has offered by a fixed rate loan of 13.75% for 5 years which make the 10 lakh loan come for an EMI of Rs. 23000. Plus a processing charge of atleast 4000 - 5000.

Can someone please suggest which would be a better one to take?

By the way, the SBI sanction letter is already with me. So its for me to decide now whether to accept the draft or not.

My concern is that if I take HDFC, the excess monthly EMI I will be paying is Rs. 1130 which makes it Rs. 67800 extra over a period of 5 years.

Whereas if I take from SBI, I save Rs. 57800 (67800 - 10000) over a period of 5 years.

But what is the implication of a floating rate (from SBI)? I know if the rate changes then I have to pay higher EMI, but then what are the chances of the rate increasing, and by how much? Will an increase in the rate off set the saving that I will make?

Would really appreciate if someone can urgently advise since my car delivery date is imminent and I have to finalize the loan.

Regards,

Sourav

[MileCruncher]

@Souravdebbiswas: I would say go with SBI primarily because a PSU is any day better than Pvt Sector Banks on loans department.

In your case I would say the SBI will work out cheaper as the Interest Rates are its highest and may rise at the most 0.5% more before coming down wherein you will be able to get benefit of that. Whereas with HDFC you will be stuck with a fixed 13.75% loan. Further more with the Pvt Sector banks, the initial EMI's have a higher share of interest component compared to principal. So even if you want to foreclose the loan say 2 years down the line, most of the interest for 5 years would already have been paid. Daily reducing balance interest is anyday better on that aspect.

As regards to a DSA, I'm wondering why do you need one? You can easily walk into a SBI branch and fill out the form. They generally take about 3-4 days to process and grant approval. Something you/any family member can easily do. Not worth paying 10K IMHO.

Cheers

[Motoringlover]

Originally Posted by MileCruncher

As regards to a DSA, I'm wondering why do you need one? You can easily walk into a SBI branch and fill out the form. They generally take about 3-4 days to process and grant approval. Something you/any family member can easily do. Not worth paying 10K IMHO.

Cheers

Mate - Do you need have a bank account with them to get that kind of service ?

Best - ML.

[MileCruncher]

Originally Posted by Motoringlover

Mate - Do you need have a bank account with them to get that kind of service ?

Best - ML.

Nope. Both me and wifey bank with HDFC (due to official reasons) but have had car loan with SBI for 2.5 years now. Had the Bolero financed from SBI and while foreclosing got waiver of prepayment penalty as well since we were getting the next car financed from them. Furthermore two cars were financed and sanctioned at the same time for a single customer i.e. wifey.

I feel SBI has moved on to a different plane altogether in terms of customer service. It may not be glitzy like a lot of private banks but are very efficient and trust worthy in things that really matters.

Cheers

[souravdebiswas]

You do not need to have an existing bank account to obtain the loan. But they will be opening a bank account along with the loan so that the money can be debited from the SBI account easily and on time. I will issue a standing instruction on my HDFC account to transfer the EMI into SBI account and from there the money will be debited against my EMI. Its easier I guess else I will have to personally issue cheques to SBI every month.

Even I did not like the DSA business. He was recommended by the dealer. I guess the sales executive takes a cuts from the DSA. Actually I did not know about the SBI rate of interest earlier, else would have directly approached them. Anyway after suggestions from all of you I have decided to go to the SBI branch tommorrow myself for signing some additional papers, instead of interacting with the DSA.