Customers of the State Bank of India can get car loans with interest rates ranging from 7.70% to 10.50% and terms of up to 7 years. SBI currently offers the lowest Car Loan interest rate of 7.50 percent, with an EMI (per ₹ 1 Lakh loan amount) of Rs.4,500 for a two-year loan and Rs.2,004 for a five-year loan.
Features
Individuals must be between the age of 21 and 65.
Interest is calculated based on of the Daily Reducing Balance.
There is no EMI in advance.
SBI's maximum vehicle loan amount is up to 85 percent of the on-road price.
Financing is available for the On-Road price.
In SBI, the processing fee is 0.20 percent of the car's cost, with a minimum of Rs.500 and a maximum of Rs.3,750.
7-year repayment period
Interest rates begin at 7.50 percent and vary according to the down payment, net income, and other factors.
SBI offers optional life insurance coverage.
Fees
Processing fee -
New Car: 0.40% of the loan amount + GST. Maximum of Rs.7,500 plus GST.
Certified Pre-Owned Cars: 0.40% of the loan amount + GST. Maximum of Rs.7,500 plus GST.
Financing - On-Road Price of the car up to 90% would be provided.
Eligibility
Applicants must meet the following car loan eligibility criteria to be eligible for an SBI New or Used Car Loan:
The applicants/individuals between the age of 21 and 67 are eligible. They must be a Central/State Government employee, a professional or self-employed, or someone involved in agricultural and allied activities.
Factors to be considered
Income-to-Debt Ratio - It is one of the key factors considered by lenders when determining the rate of interest. It is usually a representation of the amount of money you owe to various entities. A low income-to-debt ratio is always recommended because it indicates your ability to make EMI payments on a monthly basis without any delays.
Loan amount - Your monthly EMI will be high if you apply for a larger loan amount. SBI offers a maximum loan of 85 percent of the car's on-road price.
Interest rate - A higher interest rate raises your EMI for a loan, increasing the total cost of the loan. SBI's lowest interest rate is 7.50 percent. Yet, before applying for a loan, you should conduct a thorough analysis and compare rates online.
Age of the Vehicle - When you borrow a car loan, the vehicle being financed serves as collateral for the duration of the loan. If you fail to pay your EMI on time, the bank may seize your vehicle in order to make up the difference. This is why lenders and banks consider the model and age of the vehicle when determining the interest rate.
Repayment tenure - The repayment tenure, or the amount of time given to the applicant to repay their loan, will also determine the interest rate charged on their loan. The longer the repayment period, means the lower EMI on a car loan, yet a higher interest rate will be charged on the loan amount. Usually, SBI loans have a maximum tenure of 7 years.
Conclusion
SBI finances all models of new and used vehicles. Yet, the used car which requires a loan cannot be older than 5 years. For financing, the applicant may select any model of car. Also, the spouse of the applicant can be included as the co-borrower while availing of a loan. Calculate your eligibility and affordability before applying for a loan.
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