|Type of loan||Effective interest rate|
|New car||9.25% p.a.|
|Used car less than 3 years||15.55% p.a.|
|Used car 3 - 5 years old||15.80%|
|For existing home loan customers||9.90% p.a.|
|Processing fee||0.25% of the loan sanctioned, subject to a minimum of Rs. 500 and a maximum Rs. 5,000.|
|Penalty on overdue EMI||2% p.a. on the overdue amount|
|Maximum loan tenure||84 months|
A car is a dream for many as it is not only a convenient mode of transport, but also translates to a status symbol. Make that dream a reality with the State Bank of Hyderabad car loan which offers different schemes to suit different customers. For the purchase of a new vehicle, SBH offers the Utsav Car Loan scheme where customers can get attractive loan terms to buy new passenger vehicles that include jeeps, MUVs and SUVs. For used vehicles , customers can avail of term loans with floating rates on interest that are linked to the base rate. Get lower interest rates on cars below 3 years old. Loans will be given for cars that are not more than 5 years old, but only on providing original registration books. Existing home loan customers can avail of a car loan on better terms and interest rates!
Calculating just about anything is now a breeze with our developments in technology. To calculate the details of your loan that include EMI amount, interest payable, total loan amount payable and so on, use the online EMI calculators that are free and available to everyone.
If you’d like to calculate your EMI manually, you can use the following formula:
(Principal) X (Interest rate per month) X (1+Interest rate per month) to the power of loan tenure
[(1+Interest rate per month) to the power of loan tenure – 1]
This condenses down to E = P*r*[(1+r)^n/(1+r)^n-1)]
E = EMI
P = Principal amount
R = Rate of interest per month
N = Number of years
For instance, if you take a car loan from SBH for Rs. 7.5 lakhs for 4 years, the rate of interest is 9.25%. The processing fee charged is 0.25%.
SBH Car loan Interest Rate for New Borrowers
9.25% (Base Rate) + 0.20% = 9.45% (effective rate)
According to the calculator, your loan details are as follows:
EMI = Rs. 19,004
Interest payable = Rs. 1,62,189
Processing charges = Rs. 1,875
Total amount payable = Rs. 9,14,064
An amortization is a handy table that depicts the whole loan on a monthly basis from start to finish. It gives you a detailed breakdown of the components in each EMI.
The following table is based on an SBH loan taken for Rs. 7.5 lakhs for a period of 4 years at 9.95% p.a., sanctioned in October 2016.
|Year||Principal Paid||Interest Paid||Total Payment||Outstanding loan balance|
|2015||Rs. 38,674||Rs. 18,338||Rs. 57,012||Rs. 7,11,326|
|2016||Rs. 1,64,646||Rs.63,402||Rs. 2,28,048||Rs. 5,46,681|
|2017||Rs. 1,81,794||Rs. 46,253||Rs. 2,28,047||Rs. 3,64,886|
|2018||Rs. 2,00,731||Rs. 27,316||Rs. 2,28,047||Rs. 1,64,155|
|2019||Rs. 1,64,155||Rs. 6,880||Rs. 1,71,035||Rs. 0|
Income - To avail of an SBH loan to buy a new car, the bank requires you to be earning at least Rs. 3 lakhs per annum. For the self-employed, professional and agriculturists its higher at Rs. 4 lakhs per annum. This is so that the bank is assured that you can handle the loan and its repayment. If you’re looking to purchase a second hand vehicle, you need to show at least Rs. 2.5 lakhs annual income. If you are unable to show proof of enough income as required by the bank, you may face a rejection on your loan. If you secure a loan falling shorter of the eligible income, the bank could impose higher interest rates and stricter terms as you may be a risky customer.
Debt-to-income ratio – Holding debt already impacts your current loan application negatively. If you are already in debt, this means your income is already being hit by the current EMIs and other credit repayments. This factors into your debt to income ratio and will have an effect on your eligible loan amount and interest rates. You may also want to extend your loan tenure to bring down the EMI amount. This results in more interest being paid in total.
Credit Score – Credit scores in India are handled by CIBIL. Maintaining a good credit score will put you in a favourable position when it comes to loans. You will have some authority to bargain with banks for better interest rates, repayment tenures and loan amounts. On the other hand, a low score will give the banks complete power to determine your loan criteria. You may face higher interest rates as your score is low and you do not have much creditworthiness to your name.
Down Payment – A big down payment will put you in a good position with the banks. This is because when you make a large down payment on your car, the total loan amount will be reduced. You will owe the bank a lesser amount of money when you purchase your car. This means the risk of the bank comes down. This could work in your favor and increase your bargaining power. Banks will find you to be a positive customer and will be relaxed in loaning you money.
CIBIL scores are a reflection of the credit history of every customer who has availed of credit from banks or financial institutions. CIBIL stands for the Credit Information Bureau of India Limited. Your CIBIL score has a direct impact on your loan. Your approval or rejection on a car loan from SBH will depend on your credit score. If you have a low score, banks will not want to give you a loan. If they do give you a loan to buy a car, since the vehicle will be hypothecated, your terms and interest rate may be higher. The banks will have little or no trust in you, and therefore charge you a higher rate of interest as your a risk for them. On the other hand, a good or excellent credit score will allow banks to be more relaxed in knowing that you will pay back your loan. Your loan process will become easier and more over, you can request your bank to consider better terms, loan amount, tenure and interest rates on your loan.
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