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    SBI Car Loan Interest Rates 21 May 2019

    SBI Car Loan interest rate starts at 9.45% p.a. for new cars and 10.95% p.a. for used cars. However, the final interest rate on your SBI Car Loan will depend on a number of factors such as the loan repayment tenure, credit score, income, and so on. The bank also offers special interest rates for women customers.

    There are a number of schemes under which State Bank of India offers car loans. They are – SBI Car Loan, Assured Car Loan Scheme, Loyalty Car Loan, SME Retail Car Loan, NRI Car Loan, and so on.

    SBI Car Loan Interest Rates under different schemes

    Name of Scheme Rate of Interest (% p.a.)
    Men Women
    SBI Car Loan, NRI Car Loan, SME Retail Car Loan, Assured Car Loan Scheme 9.45% p.a. up to 9.95% p.a. 9.45% p.a. up to 9.95% p.a.
    Loyalty Car Loan Scheme: SBI Car Loan and NRI Car Loan 9.85% p.a. 9.80% p.a.
    Loyalty Car Loan Scheme: Certified Pre-Owned Car Loan 10.95% p.a. 10.90% p.a.
    Certified Pre-owned Car Loan Scheme 11.00% p.a. up to 12.00% p.a. 11.00% p.a. up to 12.00% p.a.

    SBI Car Loan Interest Rates under different schemes on the basis of CIC scores

    Name of Scheme/Type of Customer CIC Scores Rate of Interest (% p.a.)
    SBI Car Loan Lite More than or equal to 750 11.60% p.a.
    Between 650 and 749 12.60% p.a.
    Customers with Corporate Salary Package N/A 9.45% p.a.
    Customers with salary packages other than Corporate Salary Package Less than 700 Men: 9.95% p.a.
    Women: 9.90% p.a.
    Between 700 and 749 9.65% p.a.
    More than or equal to 750 9.45% p.a.
    SBI Car Loan Interest Rates
    SBI Car Loan Interest Rates

    Features of SBI Car Loan

    The features of SBI Car Loan can be summed up as follows:

    • Competitive rate of interest
    • One of the longest loan repayment tenures (can be extended up to 7 years)
    • Finance of up to 90% the on-road price of the vehicle
    • The interest is calculated on a daily reducing balance
    • No requirement for advance EMI
    • SBI Life Insurance cover can be availed
    • Low EMIs on loans

    How to calculate my SBI Car Loan Interest Rate

    If you wish to estimate the amount of EMI on your car loan amount to plan your loan budget, you can either use the BankBazaar car loan EMI calculator or manually calculate the EMI using the following formula:

    EMI (E) = [P x r x (1+r)^n]/[(1+r)^n-1]

    Where “E” is EMI, “P” is the principal amount of the loan, “R” is the rate of interest and “n” is the loan tenure. “R” is the interest rate applicable per month. Hence, in order to get the monthly interest rate (in percentage), the formula used on the annual interest rate is 9.25/(12 x 100).

    For example: If you take a car loan for Rs. 5,00,000 at an interest rate of 9.25% with a loan tenure of 7 years, an estimate of the total interest payable would be Rs. 1,93,999/-, and the total payment made by you at the end of the loan term will be Rs. 6,93,999.

    In the following exemplification, we can get an idea of how EMI is calculated for a loan amount of Rs. 4 lakhs for a loan term of 3 years at an interest rate of 9.25%. EMI per month is calculated from Oct 2016 to Sept 2018.

    The first three months the projection will be as follows:

    EMI Principal Interest Amount Total Payment (Principal + Interest) Balance Due
    Oct 2016 Rs. 9,595 Rs. 3,283 Rs. 12,879 Rs. 3,90,405
    Nov 2016 Rs. 9,674 Rs. 3,205 Rs. 12,879 Rs. 3,80,730
    Dec 2016 Rs. 9,754 Rs. 3,125 Rs. 12,879 Rs. 3,70,977

    The following projection shows the total yearly EMI and repayment schedule for the loan term of 3 years, beginning from October 2015:

    EMI Principal Interest Amount Total Payment (Principal + Interest) Balance Due
    2015 Rs. 29,023 Rs. 9,613 Rs. 38,636 Rs. 3,70,977
    2016 Rs. 1,23,479 Rs. 31,065 Rs. 1,54,545 Rs. 2,47,498
    2017 Rs. 1,36,206 Rs. 18,338 Rs. 1,54,545 1,11,291
    2018 Rs. 1,11,291 Rs. 4,617 Rs. 1,15,909 Rs. 0

    In this scenario, loan EMI per moth would be around Rs. 12,879 and the Total Interest Payable would be Rs. 63,634. Therefore, the total payment that you will have to make by the end of the loan tenure is Rs. 4,63,634.

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    Factors affecting SBI Car Loan Interest Rates

    Although the interest rate stipulated by the bank remains the same in most cases, there are various factors that can influence the SBI car loan interest rate. This could also affect the loan amount offered to a borrower as well as the amount of EMI to be paid per month. These, in turn, determine the amount that is given as a loan to the prospective customer, along with the EMI to be paid. Few of these factors are given below.

    • Reliable Guarantor or Co-Obligor - Having a reliable guarantor or co-obligor with substantial income and credit back-up can pave way for a better car loan decision on behalf of the bank. The spouse, parents, siblings or friends and relatives can act as a third-party guarantee on the car loan. This also enhances your opportunity of negotiating a lower rate of interest on the loan since the risk involved in lending the money is minimized.
    • Income - SBI analyzes an applicant’s debt-to-income ratio in order to evaluate their creditworthiness. If you have a well-balanced income outflow compared to your earnings, you are eligible for a car loan approval. In such a situation, you can negotiate with the bank for a lower rate of interest.
    • Loan Tenure - If the tenure you have chosen for your car loan is longer, it indicates higher risk of default payments to the bank. To negate this risk the bank might increase the interest rate applicable on the loan. By going for a lower loan tenure, the bank will be assured of quicker repayment so you can expect a lower interest rate.
    • Loan margin - The percentage of loan margin or down payment made by the prospective borrower also has substantial influence on his/her car loan interest rate. This is inversely proportional because the bigger the down payment the lower is the interest rate applicable on the car loan.
    • Existing Customers - Existing customers of SBI have a higher chance of getting their car loan applications approved at a lower rate of interest. Those who have already availed a home loan from SBI can quickly and easily avail a car loan under SBI car loan scheme called SBI Loyalty Car Loan Scheme. This also improves the chances of getting a lower interest rate on your car loan.
    • CIBIL Score - CIBIL score of an applicant is evaluated by SBI to better understand his/her repayment capacity. Only if an individual has a good credit score will he/she get a car loan approval and, in this case, the bank will lower the rate of interest applicable on the loan that it sanctions to the customer.

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