The State Bank of India is a much sought-after bank for loans and other financial products. Step this way to know all about SBI’s Car Loan scheme.
The State Bank of India (SBI) has long been a name to reckon with. Customers all over the country tend to associate SBI with reliability and safety. Therefore, it’s no wonder that SBI products always manage to do well.
Since SBI happens to be one of the largest financial lenders in the country, it is able to provide products at lower costs as compared to its peers, while women are also provided with special rates and privileges.
Let’s take a look at the terms and schemes offered by SBI for their Car Loans.
Additional Reading: Essentials To Know Before You Apply For A Car Loan!
Are you eligible?
You can apply for an SBI Car Loan if you are over 21 years of age or less than 65 years. You could either be a salaried or self-employed individual with a regular income.
The minimum income required for salaried individuals, in order to apply for an SBI Car Loan, has been fixed at Rs. 2.5 lakhs a year. However, for self-employed individuals, the minimum income required is set at approximately Rs. 34,000 per month or Rs. 4 lakhs a year.
You can apply for an SBI Car Loan even if you are earning agricultural income. In this case, you will need to have a minimum net annual income of Rs. 4 lakhs.
Remember, if you have other loans on your plate, your eligibility will be lower. However, if you choose to have a co-applicant on your loan, it might help improve your eligibility.
Additional Reading: Car Loans For Those With An Income Of Rs. 20,000
What is the quantum of loan you can expect?
The maximum Car Loan amount you can avail is fixed at 48 times the monthly salary for a salaried customer and 4 times the net profit for a self-employed individual.
Net profit, in this case, will be the gross taxable income after adding back depreciation and repayment of loans. If you are earning agricultural income, this will be limited to 3 times your net annual income.
SBI will provide you with 85% of the on-road price of your car, as the loan amount. The on-road price will include charges such as those for insurance, registration, annual maintenance contract, extended warranty and cost of accessories. Note that a number of other lenders provide financing only on the ex-showroom price of the car.
Additional Reading: Use Your Fixed Deposit To Get A Car Loan
How long do you have to repay the loan?
SBI provides you with the longest Car Loan tenure among all lenders. The maximum loan tenure is fixed at 7 years. However, note that by choosing the maximum loan tenure, your EMI gets reduced, but your total interest outgo will be higher. So, choose your tenure based on your financial position.
Additional Reading: 9 Tips To Manage A Car Loan
What is the interest rate you need to pay?
Currently, the interest rates are at 1.25% above the 1 year Marginal Cost of funds based Lending Rate (MCLR) for men and 1.20% above the 1 year MCLR for women.
The best part? Interest is calculated based on the daily reducing balance of your loan. Note that women borrowers are provided with concessional rates across all loans that SBI provides.
Additional Reading: MCLR Linked Loans – More Affordable Loans For You
What about the charges?
There are no prepayment or foreclosure charges for your SBI Car Loan. And the processing fee is just 0.50% of the loan amount. So, you can prepay your Car Loan and save on the interest.
Which cars can you buy?
SBI will fund your new car purchase if it is a passenger car, a Multi Utility Vehicle (MUV) or a Sports Utility Vehicle (SUV). It will also finance a car purchase made from your own funds if the car is not more than 3 months old.
Are there any additional features?
You can opt for an SBI Insurance cover along with your Car Loan. Another advantage is that you don’t need to pay advance EMIs for your Car Loan. You can choose to pay on any day during the month.
SBI customers can also avail of an overdraft facility along with their Car Loan and you can also use the bank’s online banking facility to check your Car Loan statement online.
What are the documents needed?
You start by submitting your signed application form along with 2 passport-size photographs. As with any other loan, SBI will need your identity proof and address proof. SBI will accept a copy of your passport, PAN card, voter ID or driving license as identity proof.
For address proof, you can submit copies of documents such as a ration card, driving licence, voter id, passport, electricity bill or telephone bill. Bank statements for the last six months are mandatory, irrespective of whether you are a salaried individual or self-employed professional.
Salaried individuals will have to submit their latest salary slip along with their Form 16. If you don’t have your Form 16, you will need to provide your Income Tax (IT) return for the last 2 years.
If you are a self-employed professional, you need to submit your IT return for the last 2 years as income proof. You may also need to provide your audited balance sheet and profit and loss statement for the past 2 years.
If you are running a shop, keep a copy of your Shop and Establishment Act certificate handy for the loan documentation. You may also be asked for your sales tax certificate.
Running a partnership firm? A copy of your partnership deed will be necessary. If you are a farmer, you will need to show proof of land holding along with a photograph of the land, which you are using for cultivation. The land needs to be in your name and should be freehold property. If it is indirect farming, such as poultry farming, you can show proof of your business activity.
Additional Reading: Car Loans – Interest Rates, Eligibility And More
Checklist before you apply for an SBI Car Loan
- Calculate your EMI to see if it will fit into your budget.
- You need to check your Car Loan eligibility before applying in order to avoid rejection.
- Check out the interest rates and terms across banks.
- You must take the total loan cost into account. This will include processing fee, service charges, prepayment charges, foreclosure charges and total interest outflow. Use the total cost for comparison.
- Ideally, you should be zeroing in on the offer that costs the least.
Want to know what customers are saying about SBI Car Loans? Here are some reviews just for you!
Swapnil from Pune – “The interest rates are very less for new car buyers. They have their own rules and terms and conditions. It was onetime payment and processing fee was less compared to other banks. I got car loan of Rs. 6 lakhs and I’m making the EMI of Rs. 10,000.”
Ravi from Hyderabad – It has been a good experience in taking this loan. Three months back I have closed this loan amount. The rate of interest offered has been good as well, and the process went smoothly. Even the loan amount which they had provided has been satisfactory as well.”
Santosh from Mumbai – “I have also taken a car loan with State bank of India. The process was good and I received the loan on time. The documentation process is also on time. The rate of interest is around 8% and the processing charges are normal. The after loan services are also good.”
Ashwin from Chennai – “My car loan was taken from SBI 1.5 years back. The loan amount was 10 lakhs and the interest rate was higher than other banks. The EMI period was 7 years. The loan process was very smooth and good. The processing fee was nominal.”
Birendra from Delhi – “I have taken a car loan from SBI and my loan experience was good, the loan amount was for Rs. 4 lakhs with nominal interest rate when compared to other banks. The process was quick and I received my loan amount on time. Customer service was good and the tenure for this loan is 5 years.”
Prashanth from Bangalore – “I have taken car loan from SBI and the approved loan amount was 5 lakhs. The tenure was for 5 years. The monthly EMI comes around 11000. It was a fast approval from SBI. The customer service and response were good.”
You can read more such reviews here.
SBI Car Loans are quite popular, but remember to compare loans and find the most suitable one for you before you sign on the dotted line.
Additional Reading: Car Loan Handbook: All Questions Answered