I am sure there is business sense for both State Bank of India (SBI) and Tata Motors in this alliance. For those who don’t know about it yet, Tata Nano can be bought on loan only from SBI. Tata Motors has got into an exclusive deal with SBI for this. It does not end there. Say you have the needed Rs 1.25 lakh or so for a Nano. You still have to go through SBI. In this case, you would need to get a demand draft of SBI issued in favour of Tata Motors.
On the one hand, it is no different from an exclusive showroom for a car - you cannot buy a Swift from a Honda showroom, for example. On the other hand, Tata Nano is a people’s car (so to speak) and there is some reason for a loan to be availed of from any bank, anywhere in India. And what about the other public sector banks, like say, State Bank of Travancore? The announcement says that Tata Motors will utilise the seven associate banks of SBI. So it is not just the SBI.
Sure, SBI has a vast network of around 11,000 branches, and add to that the 2000 branches of the associate banks, and that gives Tata Motors a vast reach for sure. According to the latest Reports, Tata Motors is putting the final touches to a finance scheme for the Nano car through a tie-up with the State Bank of India, India's largest bank, under which the bank will finance 70 per cent of the price of the car at an interest rate of 14 to 14.75 per cent for a tenure of up to five years.
Private banks such as HDFC, ICICI and Kotak Mahindra have decided against entering into a rate war with PSU banks over the financing of Nano for now, as they fear aggressive interest rates could lead to high defaults. Though they are still in discussions with Tata Motors, they do not want to offer loans at less than normal rates for Nano customers.
Private auto finance companies — which command more than 60% of the car loan market — are planning to cater to the more upmarket Nano buyer in big cities. The low cost car that will attract customers mainly from the lower middle class and hence it is going to be a risky proposition for most lenders that will extend car loan for the Nano. In fact some lenders have decided to extend booking finance for the vehicle but that the interest rate charged on the loan will be higher during the booking period. The main reason behind this is that lenders expect the rush for loans from the less well off people with whom the risk association is more. Hence banks will charge higher interest rates at the booking stage and after the car is delivered and the lender can mortgage against it, interest rate will be lowered for the rest of the tenure.
What You Need to Look For Before Availing Your Car Loan ?
* Financing your new car - Unless you're paying hard cash, you need to undertake a crash course on becoming a quasi "loans expert" if you're planning to buy a car in the near future and don't have an expert to handle your loan repayments. It makes no difference about the type of car you desire; the basic remains the same for all car types - cars, sedans, SUVs, pickups, mini vans, jeeps etc. You "borrow" once and "repay" on a monthly basis. Since you don't have enough cash to fund your vehicle, or maybe you do have cash but still prefer to go in for a car loan (you pay a "down payment" - a fraction of the car's cost), you are going to need financiers. Different financiers provide loans for different purposes. And the loan criteria also changes with the type of loan you need. So do your homework and research the financiers - "what person" or "company" is providing "what", and what are the criteria for availing the credit. It's important to avail loan options that offer affordable car loan rates.
* Get pre-approved - It's possible to buy your car if you end up getting the required credit. So the ownership of your car depends upon the availability of your car loan. Therefore it makes sense to "shop" for a "loan" first and once you get the approval, you "shop" for your car. The process of "approving" or "arranging" for your "loan" before actually deciding upon the vehicle is referred to as "pre-approval". Getting your "pre-approval" is important since you are sure you have a source of finance for your car and your efforts put in while selecting or deciding your vehicle won't go to waste.
* Find the right financing company - All creditors are not alike. You can save a significant amount of money by selecting the right kind of finance providing car loan rates which suits your needs. Creditors follow a common pattern for charging the interest rates; however their monthly repayment schedule can vary. It's the creditor's discretion to decide how he or she wants the debt to be paid off. Finding the most cost effective loan will help you save a lot of money in the end - when you totally pay off your loan.
* Borrowing money against some investments or savings - There's another option available. If you've saved some money and invested the same in bonds or deposits in banks, chances are you might be eligible for "overdraft" facility against your investments. In such cases the car loan option works out to be very much in your favor as a lot of latitude is given in repaying the loan back. And you end up paying the difference of your savings rate minus the "borrow" or "interest" rate.
* The quicker you payback, the more you save in the end - Creditors charge their interest on the duration of the "borrowings" i.e. for how long you need to avail the car loan facility. It means your net payable interest amount is in direct relation to the time you avail the credit facility. So if you make plans to pay off your debt within a short span to time, you end up paying lesser interest and end up saving money.
Showing posts with label nano loan. Show all posts
Showing posts with label nano loan. Show all posts
Information on Bank loan for Buying Tata Nano
Want a loan for Tata Nano...? Is your monthly salary Rs 6,250..?
state Bank of India has relaxed the income eligibility criterion for customers interested in applying for car loans to buy a Tata Nano.As a result, the potential buyer base has widened considerably for the country’s least expensive car.
The minimum income eligibility would be Rs 75,000 a year for customers drawing regular salaries and Rs 1 lakh a year for the self-employed, said a senior SBI official.At present, the income eligibility criterion to apply for SBI car loan is Rs 1 lakh both for salaried and self-employed people. Click here to read more...
UCO Bank to sign agreement to offer loans for Nano
UCO Bank said it is going to sign an agreement with Tata Motors in order to offer loans
to people planning to book Nano.
Bank chairman S K Goel said here on Friday that the agreement would be signed next week.
Uco Bank has also announced a car financing pact with Maruti Suzuki India on Friday to boost its auto loan business. The bank is also talking to a host of other auto makers including Bajaj Auto and Mahindra & Mahindra for financing agreements, Mr Goel said. Click here to read more...
Tata Nano Buyers can now Get loan from any SBI Bank branche's
Buyers can seek loans from any bank to buy Tata Motors' Nano car despite the company signing a deal with State Bank of India (SBI),SBI Chairman O P Bhatt said.
"People can seek loans for the Nano from any other bank as well. The tie-up is meant to manage all booking points, including distribution and collection of applications," Bhatt told reporters here on the sidelines of a programme at XLRI last night. Click Here to read more....
Extending loan for Tata Nano cost's you Rs 1,425 per anam
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. Click here to read more..
Banks to charge a fee for retaining the booking deposits of Nano
A Tata Nano aspirant who does not get the allotment at the first phase is expected to pay an additional fee for retaining their booking deposits for the second phase. If an individual wants to extend his loan period to retain the booking deposit with Tata Motors then he will have to shell out a payment that is over and above the interest payment for the period. Click here to know more..
state Bank of India has relaxed the income eligibility criterion for customers interested in applying for car loans to buy a Tata Nano.As a result, the potential buyer base has widened considerably for the country’s least expensive car.
The minimum income eligibility would be Rs 75,000 a year for customers drawing regular salaries and Rs 1 lakh a year for the self-employed, said a senior SBI official.At present, the income eligibility criterion to apply for SBI car loan is Rs 1 lakh both for salaried and self-employed people. Click here to read more...
UCO Bank to sign agreement to offer loans for Nano
UCO Bank said it is going to sign an agreement with Tata Motors in order to offer loans
to people planning to book Nano.
Bank chairman S K Goel said here on Friday that the agreement would be signed next week.
Uco Bank has also announced a car financing pact with Maruti Suzuki India on Friday to boost its auto loan business. The bank is also talking to a host of other auto makers including Bajaj Auto and Mahindra & Mahindra for financing agreements, Mr Goel said. Click here to read more...
Tata Nano Buyers can now Get loan from any SBI Bank branche's
Buyers can seek loans from any bank to buy Tata Motors' Nano car despite the company signing a deal with State Bank of India (SBI),SBI Chairman O P Bhatt said.
"People can seek loans for the Nano from any other bank as well. The tie-up is meant to manage all booking points, including distribution and collection of applications," Bhatt told reporters here on the sidelines of a programme at XLRI last night. Click Here to read more....
Extending loan for Tata Nano cost's you Rs 1,425 per anam
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. Click here to read more..
Banks to charge a fee for retaining the booking deposits of Nano
A Tata Nano aspirant who does not get the allotment at the first phase is expected to pay an additional fee for retaining their booking deposits for the second phase. If an individual wants to extend his loan period to retain the booking deposit with Tata Motors then he will have to shell out a payment that is over and above the interest payment for the period. Click here to know more..
UCO Bank to sign agreement to offer loans for Nano
UCO Bank said it is going to sign an agreement with Tata Motors in order to offer loans
to people planning to book Nano.
Bank chairman S K Goel said here on Friday that the agreement would be signed next week.
Uco Bank has also announced a car financing pact with Maruti Suzuki India on Friday to boost its auto loan business. The bank is also talking to a host of other auto makers including Bajaj Auto and Mahindra & Mahindra for financing agreements, Mr Goel said.
The bank has also slashed its benchmark prime lending rate (BPLR) by 50 basis points to 12% effective from April 1. Elaborating on the proposed agreement with Tata Motors, Mr Goel said Uco would offer loans to customers fully or partly for making the initial deposit for booking Nano. The bank would charge a 10% interest rate per annum on the loan. Customers would need to deposit Rs 95,000 for booking the basic model of Nano.
The bank would also convert the initial booking loan to a regular car loan if the customer gets allotment of Nano and seeks financing support for a longer term. The interest rate for the car loan then would depend upon the prevailing interest rates, Mr Goel said.
At present, the bank offers car loans at 11.75% a year. The rate stands reduced to 11% per annum in case a borrower offers full collateral security against the loan. Uco's car loans are linked to its BPLR and so the rates will fall from April 1.
People planning to take loans from Uco or, for that matter, any other Tata Motors preferred financiers, for booking Nano would need to submit the application forms to State Bank of India (SBI) which is Tata Motors exclusive partner for managing the entire booking process.
Tata Motors has earlier said that it has already entered into agreements with some 15 banks and NBFCs for the Tata Nano booking loan product. Customers will need to collect application forms from Tata Motors Passenger Car dealerships, SBI and its branches, subsidiaries and associates, other preferred financiers, and outlets of Westside, Croma,World of Titan and Tata Indicom exclusive stores.
sorce: India Times
to people planning to book Nano.
Bank chairman S K Goel said here on Friday that the agreement would be signed next week.
Uco Bank has also announced a car financing pact with Maruti Suzuki India on Friday to boost its auto loan business. The bank is also talking to a host of other auto makers including Bajaj Auto and Mahindra & Mahindra for financing agreements, Mr Goel said.
The bank has also slashed its benchmark prime lending rate (BPLR) by 50 basis points to 12% effective from April 1. Elaborating on the proposed agreement with Tata Motors, Mr Goel said Uco would offer loans to customers fully or partly for making the initial deposit for booking Nano. The bank would charge a 10% interest rate per annum on the loan. Customers would need to deposit Rs 95,000 for booking the basic model of Nano.
The bank would also convert the initial booking loan to a regular car loan if the customer gets allotment of Nano and seeks financing support for a longer term. The interest rate for the car loan then would depend upon the prevailing interest rates, Mr Goel said.
At present, the bank offers car loans at 11.75% a year. The rate stands reduced to 11% per annum in case a borrower offers full collateral security against the loan. Uco's car loans are linked to its BPLR and so the rates will fall from April 1.
People planning to take loans from Uco or, for that matter, any other Tata Motors preferred financiers, for booking Nano would need to submit the application forms to State Bank of India (SBI) which is Tata Motors exclusive partner for managing the entire booking process.
Tata Motors has earlier said that it has already entered into agreements with some 15 banks and NBFCs for the Tata Nano booking loan product. Customers will need to collect application forms from Tata Motors Passenger Car dealerships, SBI and its branches, subsidiaries and associates, other preferred financiers, and outlets of Westside, Croma,World of Titan and Tata Indicom exclusive stores.
sorce: India Times
whant a loan on tata nano...? Is your monthly salary Rs 6,250..?
state Bank of India has relaxed the income eligibility criterion for customers interested in applying for car loans to buy a Tata Nano.As a result, the potential buyer base has widened considerably for the country’s least expensive car.
The minimum income eligibility would be Rs 75,000 a year for customers drawing regular salaries and Rs 1 lakh a year for the self-employed, said a senior SBI official.At present, the income eligibility criterion to apply for SBI car loan is Rs 1 lakh both for salaried and self-employed people.
The criterion has been relaxed keeping in mind that the Tata Nano is designed to meet the demands of low-income customers, the official said.
Clearly, the Nano is targeted at the two-wheeler customers as well as competitors in the compact car segment.
SBI is offering a Nano booking loan product with a one-time upfront booking fee of Rs 2,999 for the base model (which has an ex-showroom price of Rs 1.2 lakh in Delhi), Rs 3,499 for the intermediate model (Rs 1.40 lakh) and Rs 3,999 (Rs 1.70 lakh) for the high-end model, he added.
In case the customer is allocated a Nano, then the booking loan can be converted to a SBI Nano car loan. The loan would be provided up to a maximum period of seven years at 11.75-12 per cent interest. The margin requirement for the loans would be 15 per cent. That is, for Rs 1 lakh loan, the customer would have to pay Rs 15,000 upfront to get the bank to give a loan for Rs 85,000.
Back-of-the-envelope calculations show that in the case of three and five-year loans at 11-11.75 per cent, the equated monthly instalments work out roughly to Rs 3,300 and Rs 2,200 respectively.
In the case of a seven-year loan, which could be the biggest plus for the Nano vis-À-vis its closest rival, the Maruti 800, the EMIs would be in the region of Rs 1,725-Rs 1,765 for interest rates ranging between 11.25 and 12 per cent.
In the case of Union Bank of India, which has also been roped in for the Nano financing scheme, the maximum loan tenure is five years. However, the minimum could be even six months depending on the customer’s ability to repay, said a senior bank official.
The minimum income eligibility would be Rs 75,000 a year for customers drawing regular salaries and Rs 1 lakh a year for the self-employed, said a senior SBI official.At present, the income eligibility criterion to apply for SBI car loan is Rs 1 lakh both for salaried and self-employed people.
The criterion has been relaxed keeping in mind that the Tata Nano is designed to meet the demands of low-income customers, the official said.
Clearly, the Nano is targeted at the two-wheeler customers as well as competitors in the compact car segment.
SBI is offering a Nano booking loan product with a one-time upfront booking fee of Rs 2,999 for the base model (which has an ex-showroom price of Rs 1.2 lakh in Delhi), Rs 3,499 for the intermediate model (Rs 1.40 lakh) and Rs 3,999 (Rs 1.70 lakh) for the high-end model, he added.
In case the customer is allocated a Nano, then the booking loan can be converted to a SBI Nano car loan. The loan would be provided up to a maximum period of seven years at 11.75-12 per cent interest. The margin requirement for the loans would be 15 per cent. That is, for Rs 1 lakh loan, the customer would have to pay Rs 15,000 upfront to get the bank to give a loan for Rs 85,000.
Back-of-the-envelope calculations show that in the case of three and five-year loans at 11-11.75 per cent, the equated monthly instalments work out roughly to Rs 3,300 and Rs 2,200 respectively.
In the case of a seven-year loan, which could be the biggest plus for the Nano vis-À-vis its closest rival, the Maruti 800, the EMIs would be in the region of Rs 1,725-Rs 1,765 for interest rates ranging between 11.25 and 12 per cent.
In the case of Union Bank of India, which has also been roped in for the Nano financing scheme, the maximum loan tenure is five years. However, the minimum could be even six months depending on the customer’s ability to repay, said a senior bank official.
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
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
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