Extending loan for Tata Nano cost's you Rs 1,425 per annam

If you don’t get to own a Nano in the first phase of allotment, you will have to shell out at least Rs 1,425 a year if you wish to extend the period of your bank loan
for retaining the booking deposit with Tata Motors. This outgo will be over and above the interest payable for the initial three-month booking period.

Those banks that have acquired the preferred financier tags for the Nano are typically charging an interest of 10% a year from customers on the booking price for a maximum three months. They are likely to charge the same rate from borrowers who fail to get the car in the first flush and intend to retain the booking deposit with Tata Motors for the subsequent allotment. But since Tata Motors has decided to pay 8.5% a year for a retention period of 1-2 years, potential Nano customers will have to take the 1.5% per annum differential in their stride. Banks, however, will not charge any processing fee for extending the duration of Nano bookings beyond the first phase.

While Uco Bank and United Bank of India (UBI) have confirmed they will charge 10% interest from customers wishing to retain their Nano booking deposits for the second phase, State Bank of India (SBI), the exclusive booking agent for Nano, is silent on the issue.

A senior Indian Bank official said no decision had been taken in this regard. “We plan to charge 10.5% interest for the initial period of booking. Although, we haven’t thought on the possible rate for extending the Nano booking period, it is unlikely that the rate would get reduced from 10.5%,” the official said.

When contacted, a top Uco Bank executive told ET: “We’ve decided to fix the rate at 10% even for the possible extended period of booking. We may again take the sum upfront from the customer.”

If one considers a 10% interest rate, a potential buyer of the Nano base model would need to shell out an extra Rs 1,425 per annum for extending the booking period besides the booking sum that is fixed at Rs 95,000.

Similarly, in case of the Nano CX, the booking sum would be Rs 1.20 lakh and a potential buyer would need to pay an extra Rs 1,800 a year for extending his booking period. The most expensive Nano model (Nano LX) will entail a fixed Rs 1.4 lakh as booking sum and an extra Rs 2,100 a year for retaining the booking for the second term.

These computations are based on the assumption that Tata Motors will allot Nano in the second phase only after a year from the first allotment. If Tata Motors kicks off the second wave of Nano allotments within a year, then it may not pay the 8.5% interest.

UBI loans for Nano

United Bank of India (UBI) entered into an agreement with Tata Motors on Saturday to finance the booking sum for Nano and subsequently, even the car loan, reports Our Bureau from Kolkata. The bank would provide 100% finance on the booking amount and 90% loan on on-road price to people who get the allotment in the first round, a bank statement said.

The bank will charge 10% interest for the initial advance for booking Nano. It will also charge a processing fee of Rs 1,000 of which Rs 500 will go to Tata Motors, according to a senior UBI official. The loan facility will be available through its 1,450 branches across the country.

Sorce: India Times