State Bank of India introduces teaser rates to car loan market

Recently, State Bank of India has extended the 8% offer on its car loans up to June 30. About the announcement, economictimes.indiatimes.com writes, “The SBI Ezee Car Loan Scheme offers car loans at 8% per annum for the first year and 10% for the second and third years. The EMI (equated monthly instalment) on a car loan will be as low as Rs 1,559 in the first year and Rs 1,647 in the second and third years for every Rs 1 lakh.”

It is the calculation of teaser rates to car loan market. You can compare it from your previous loans.

Further the news portal writes about the present loan rates, “At present, the floating rates of car loans offered by other banks hover around 9.5-14% depending upon the tenure of the loan. The fixed rates are in the range of 10.5-15%.

The maximum loan amount for a used car is Rs 15 lakh. There is no such limit for a new car. However, in the Ezee Car Loan Scheme, there is a cap on the loan amount at 2.5 times of the net annual income. You can enhance the loan amount by clubbing the spouse’s income with yours. You have to make a minimum downpayment of 15% of the on-the-road price of the vehicle and interest is calculated on the daily outstanding balance.”

About the repayment plan and Ezee loan scheme, the news portal writes, “The repayment plan is as high as 84 months (7 years) for salaried individuals. For the self-employed, the maximum repayment term is 60 months (5 years). However, the bank offers another variant in car loans called ‘Advantage Loan’ which offers 7-year repayment period to self-employed individuals as well.

The Ezee loan scheme is the best bet for borrowers who plan to pay off the loan in 3-5 years. The bank offers loans for 3 years under this scheme. However, if you plan to avail of a longer tenure loan, the bank may slap a penalty of 2% of the repaid amount subject to certain conditions. Hence you should evaluate your repayment capacity and stick to the schedule.”

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