[mb_jg]

I just got a quote from the in-house finance section at Skoda, they are offering a loan of 5.34lakhs for 5yrs at 10.94%, EMI works out to 11,490rs. Not sure if this is a good deal. The online comparison does not show the current interest rates either.

[e-katz]

Does anybody else have recent rates from PSU Banks after the recent rate hikes by RBI? Thanks in advance.

[nishantgandhi]

I've got the following quotes:
Loan amount - Rs 745,000
Down payment - Rs 200,000
Tenure - 60 months
Scheme - Advance EMI

1. Kotak - Rs 16,400 pm (at 11.5% ROI)

2. HDFC - Rs 16,600 (he said 12.5% ROI, but might revise it downwards as I'm a salary account holder and a Preferred customer)

3. SBI - Rs 16,180 pm (However, this is at 11.25% FLOATING rate).

Is it advisable to go for SBI? I have heard some negative reviews about processing time. Also, in the current scenario, should one go for floating rates?

[ghodlur]

Originally Posted by nishantgandhi

I've got the following quotes:
Loan amount - Rs 745,000
Down payment - Rs 200,000
Tenure - 60 months
Scheme - Advance EMI

1. Kotak - Rs 16,400 pm (at 11.5% ROI)

2. HDFC - Rs 16,600 (he said 12.5% ROI, but might revise it downwards as I'm a salary account holder and a Preferred customer)

3. SBI - Rs 16,180 pm (However, this is at 11.25% FLOATING rate).

Is it advisable to go for SBI? I have heard some negative reviews about processing time. Also, in the current scenario, should one go for floating rates?

Suggest you to go with SBI not purely for the low EMI reasons but basically for transparency. Public banks dont increase the ROI at the drop of the hat as the private banks do. Although the processing time is bit on the higher side but its worth it. Stick to the Floating ROI, during the tenure of the loan the ROI is bound to come down from the present peaks.

[nishantgandhi]

Guys, I'm really confused right now.

The debate is 'EMI in advance vs arrear'. Prima facie, EMI in arrear option looks better. Here's my logic:

Loan required - Rs 700,000
EMI - Rs 15,250 odd pm if ADVANCE scheme is availed
EMI - Rs 15,350 odd pm if ARREAR scheme is availed

1. If I take Advance EMI option - I will have to pay 1 EMI upfront and I'll be given funding of Rs 700,000-15250-Processing charges. So that means I have to put additional amount towards down payment. Now I'm already stretching myself to pay the DP of Rs 2.4 lacs. So that means I have to put in additional 15k odd?

And still the interest is being computed on the entire Rs 700,000? Seems odd to me.

Also where does that 1st payment of Rs 15,250 go towards?

2. Arrear EMI option - if I get loan disbursement after Sep 15th, then my first EMI gets debited on Oct 15th. Also, I get the entire loan amount as a cheque, so no additional down payment from my side. The only downside is that my EMI increases by roughly Rs 100 pm or Rs ~6,000 for a 5 year tenure. I'm OK with this.

What do you guys suggest?

[Vtecguy7166]

Originally Posted by nishantgandhi

Guys, I'm really confused right now.

The debate is 'EMI in advance vs arrear'. Prima facie, EMI in arrear option looks better. Here's my logic:

Loan required - Rs 700,000
EMI - Rs 15,250 odd pm if ADVANCE scheme is availed
EMI - Rs 15,350 odd pm if ARREAR scheme is availed

As far as I remember, when I took the car even I had paid 1 EMI in advance.
By doing so I have to pay next EMI's for only 59 months plus the 2nd EMI got deducted only in the second month i.e. about 1 1/2 month after car purchase. So the additional 15k you are paying in addition to your 2.4L is the EMI which ultimately will be deducted from your account next month.
I think it turns out to be one and the same. Since if you take the other option you have to pay EMI's for 60 months commencing next month immediately .

[nishantgandhi]

Guys - SBI was super quick in approving my loan. I submitted my documents on Thursday and by Monday the loan was approved! Over the weekend, I got SMS from Axis too about loan approval. Now I'm slightly confused. For want of transparency and lower costs, I would prefer to go with SBI. But looking at the rate hikes, I'm in two minds. SBI is based on daily reducing FLOATING rate, while Axis is Monthly reducing FIXED rate. Please advise!

1. Loan amount - Rs 700,000

2. Tenure - 60 months

3. Rate of interest
- SBI 11.25% (Floating)
- Axis 11.5% (Fixed)

4. EMI
- SBI Rs 15,305 (arrear)
- Axis Rs 15,408 (arrear)

5. Charges
- SBI: No processing fees, 0.3%+Rs 250 as Stamp duty - Total Rs 2350
- Axis: Rs 2250 as processing fees, 0.3%+Rs 250 as Stamp Duty - Total Rs 4600

6. Foreclosure and part prepayment
- SBI: No charge
- Axis: 3% of the outstanding / paid amount

So numbers are in favour of SBI.

[nishantgandhi]

Originally Posted by nishantgandhi

Guys - SBI was super quick in approving my loan. I submitted my documents on Thursday and by Monday the loan was approved! Over the weekend, I got SMS from Axis too about loan approval. Now I'm slightly confused. For want of transparency and lower costs, I would prefer to go with SBI. But looking at the rate hikes, I'm in two minds. SBI is based on daily reducing FLOATING rate, while Axis is Monthly reducing FIXED rate. Please advise!

1. Loan amount - Rs 700,000

2. Tenure - 60 months

3. Rate of interest
- SBI 11.25% (Floating)
- Axis 11.5% (Fixed)

4. EMI
- SBI Rs 15,305 (arrear)
- Axis Rs 15,408 (arrear)

5. Charges
- SBI: No processing fees, 0.3%+Rs 250 as Stamp duty - Total Rs 2350
- Axis: Rs 2250 as processing fees, 0.3%+Rs 250 as Stamp Duty - Total Rs 4600

6. Foreclosure and part prepayment
- SBI: No charge
- Axis: 3% of the outstanding / paid amount

So numbers are in favour of SBI.

So I decided on going ahead with SBI and communicated my NO to Axis. That's when they started getting real desperate! The guy called me late evening and promised to match each and every thing in the SBI offer! I was amazed at the lengths these guys stretch to capture business. Ofcourse, his harping point was that SBI offers floating interest rate while Axis' is fixed. But he could not answer one question of mine - can I make multiple repayments every year without a charge?

Apart from that, Axis has agreed to waive off pre/part re-payment charge, foreclosure charge and processing fees. They are also wiling to write it down in the agreement. I wonder why they are chasing me so much?

[NetfreakBombay]

Cause Axis guy has monthly targets

If they are willing to waive pre-payment charges and offering a fixed rate deal withing range of +-1%, this is a pretty good deal.

[nishantgandhi]

Guys - I need a quick help here.

I signed my loan agreement with SBI, gave 6 security cheques and basically completed all loan formalities. The only pending item was to give them ECS mandate - which is OK as EMI begins around Oct 15th).

However, to my utter shock I was informed by my dealer that my loan amount (Rs 700,000) was disbursed by SBI to them 2 days back. How is this possible? I have not paid the balance amount to dealer. So technically no car has been allotted to me. But the SBI guy claims that he was shown an invoice (I suspect the booking amount invoice) and was told that since customer has made the balance payment, hence the bank should release the loan amount. However, the booking amount is not tied down to any specific car.

Can SBI disburse loan in a generic way i.e. not against a specific car? (I doubt though!).

I completed my car's PDI yesterday and then gave the green signal to the dealer (but not yet to the bank), to bring the car to showroom and complete the pending formalities.

WHAT IF I had cancelled the booking? What would have been the course of action between me, Bank and Dealer, because Rs 700,000 was already in dealer's account!

[bullboy]

SBI is based on daily reducing FLOATING rate

I had a car loan from SBI for 5 years floating .When the loan was approved in 2009 jan the interest was 11.2 or something .But since then all new car loans rates fell (my friend got one for 8% fixed for first 2 years and 10.2 for next 1 yr from sbi) but my interest rate never reduced despite being floating.
I have prepaid all the amount now , but not closed . The interest now is 14.25.

[murillo]

Originally Posted by bullboy

I had a car loan from SBI for 5 years floating .When the loan was approved in 2009 jan the interest was 11.2 or something .But since then all new car loans rates fell (my friend got one for 8% fixed for first 2 years and 10.2 for next 1 yr from sbi) but my interest rate never reduced despite being floating.
I have prepaid all the amount now , but not closed . The interest now is 14.25.

The so-called experts keep saying that over a period of time the loan rates will come down. But that never happens in our country. While banks increase rates at the drop of a hat, they are extremely reluctant to reduce them when RBI reduces interest rates.

In the business of lending, the bank faces many risks. Through floating rate schemes, the bank passes the interest rate risk on to the customer, i.e., if interest rate rises after disbursement, the bank will increase rates accordingly. The ditty that ROI will come down when rates drop is humbug. Why would a bank voluntarily forego income that it has a chance of earning? After all, the bank is a commercial enterprise with maximal profit being the objective. Hence, there is a fundamental conflict of interest in saying that the ROI will float and the bank itself will set the ROI.

This is a neo-con that is merrily going on at the expense of gullible people who lack options.

[nishantgandhi]

I opted for SBI even though it was on floating rate basis, as it is a calculated risk. I do not foresee a rate hike in the future. Also, the no-charge-on-part prepayment / foreclosure means I can effectively reduce my outgoings by making regular repayments.

[garry.brant]

Good to hear that people are goind for SBI, I too got my loan approved within a day from SBI, the interest rate is 11% reducing.

[murillo]

Originally Posted by nishantgandhi

I opted for SBI even though it was on floating rate basis, as it is a calculated risk. I do not foresee a rate hike in the future. Also, the no-charge-on-part prepayment / foreclosure means I can effectively reduce my outgoings by making regular repayments.

Originally Posted by garry.brant

Good to hear that people are goind for SBI, I too got my loan approved within a day from SBI, the interest rate is 11% reducing.

Agree with you people. I too have taken a home loan from SBI. I took the loan on Dec 2006. It took me full 1 month from application to final disbursement. I was ok with it, since I thought it is better to go with SBI than with private banks. The pain is in the initial stage only; once disbursed there are no headaches and very smooth. OTOH, private banks disburse real quick, but when one wants to part pay or repay, they make everything so difficult for the customer. I can part pay or repay without any prepayment penality which is a great option to have. Just think, HDFC Bank increased prepayment percentage to a whopping 3.5% a few years back - when RBI was consistently reducing interest rates and private banks were not following suit, and HDFC found that many of their customers are refinancing from other banks at reduced ROI.