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    State Bank of Travancore (SBT) Car Loan Interest Rates is Rated as "Excellent!" by 17 Users

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    Overview About State Bank of Travancore Car Loan

    State Bank of Travancore is a public sector bank in India which is a subsidiary of the State Bank Group. It was incorporated in 1945 and through the State Bank of Travancore subsidiary Banks Act of 1959 it became a part of State Bank Group. The Bank is headquartered in Thiruvananthapuram, Kerala, India.

    The Bank offers attractive car loan options to prospective borrowers who wish to purchase new cars, SUVs or MUVs. This car loan scheme offered by SBT is a highly sought after car loan choice because of its features such as: higher loan tenure, faster processing, lower interest rates, and so on. You can apply for a car loan individually or jointly and the purchased vehicle can be registered in any one of the borrower's’ name.

    State Bank of Travancore Car Loan Interest Rates 2017

    State Bank of Travancore offers highly affordable interest rates on auto loans with flexibility on repayment options. The interest rate is applicable on the principal amount on the basis of monthly reducing balance.

    State Bank of Travancore Car Loan Interest Rates 2017 Table

    Interest Rate For a loan amount up to Rs 10 lakhs = 10.70 % (Base Rate + 0.75%) For a loan amount of Rs 10 lakh or more = 10.45 % (Base Rate + 0.50%)
    Maximum Loan Amount Loan amount offered is 4 times of Net Annual Income or 48 times the net monthly income for salaried individuals Loan amount offered is 4 times the Net Profit or Gross Taxable income for other customers.
    Minimum & Maximum Car Loan Tenure Minimum Tenure - 12 months Maximum Tenure - 60 Months (5 years)
    Processing Fees/Charge No charges on loan amounts up to Rs. 25, 000 For loan amount ranging from Rs. 25,000 - Rs. 2 Lakhs the processing charge is Rs. 500. For a loan amount above Rs. 2 Lacs, processing charges are 0.50% of the loan sanctioned + Service tax, capped at a maximum amount of Rs. 10,000.
    EMI per Lakh (for a 5 year loan tenure at 9.85% interest) Rs. 1,652*

    *Estimated value of EMI, when paid in advance.

    How to Calculate my State Bank of Travancore Car Loan Interest Rates

    EMI on car loans ensure easy and quick repayment of loan in a systematic and efficient manner, within the specified loan tenure. In order to better understand how your car loan EMI is calculated, you can use the following formula:

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

    In this formula, the value “E” stands for EMI, “P” stands for the principal amount of the loan, “R” stands for the rate of interest and “n” stands for the loan tenure. “R” is the rate of interest applicable per month. Therefore, in order to get the monthly interest rate (in percentage), the formula used on the annual interest rate is 10.45/ (12 x 100).

    For example: If you take a car loan for Rs. 8,00,000 at an interest rate of 10.45% with a loan tenure of 5 years, an estimate of the total interest payable would be Rs. 2,30,519/-, and the total payment made by you at the end of the loan term will be Rs.10,30,519.

    In the following exemplification, we can get an idea of how EMI is calculated for a loan amount of Rs. 6 lakhs for a loan term of 3 years at an interest rate of 10.45%. 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. 14,262 Rs. 5,225 Rs. 19,487 Rs. 5,85,738
    Nov 2016 Rs. 14,387 Rs. 5,101 Rs. 19,487 Rs. 5,71,351
    Dec 2016 Rs. 14,512 Rs. 4,976 Rs. 19,487 Rs. 5,56,839

    The following projection shows the total yearly EMI and repayment schedule for the loan term of 3 years, beginning from October 2016:

    Year Principal Interest Amount Total Payment Balance Due
    2015 Rs. 43,161 Rs. 15,301 Rs. 58,462 Rs. 5,56,839
    2016 Rs. 1,84,321 Rs. 49,527 Rs. 2,33,848 Rs. 3,72,519
    2017 Rs. 2,04,532 Rs. 29,316 Rs. 2,33,848 Rs. 1,67,987
    2018 Rs. 1,67,987 Rs. 7,399 Rs. 1,75,386 Rs. 0

    In this scenario, loan EMI per month would be around Rs. 19,487 and the Total Interest Payable would be Rs. 1,01,544. Therefore, you will have to pay Rs. 7,01,544 as total payment towards the loan, by the end of the loan tenure.

    Factors affecting SBT Car Loan Interest Rates

    Interest rate stipulated by the bank usually remains the same in most cases, but there are some factors that can influence the car loan interest rate offered by SBT. This could not just affect the loan amount offered to a borrower but also the amount of EMI to be paid per month. These in turn determines 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.

    • Income - State Bank of Travancore 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.
    • Reliable Co-Obligor/ Guarantor - Having a good guarantor or co-obligor with substantial income and credit history to back-up your car loan application will lead to a better car loan decision from the bank. Third-party guarantors can be your parents, siblings, spouse, or friends and relatives. This also increases your opportunity for negotiating a better rate of interest on the loan since the risk involved in sanctioning the loan is minimized.
    • Existing Customers - Existing customers of State Bank of Travancore have a higher chance of getting their car loan applications approved at a lower rate of interest since the bank has an existing record of all their transactions.
    • Loan margin- The down payment or the percentage of loan margin paid by the prospective borrower also has substantial influence on his/her car loan interest rate. This not just proves his/her repayment capacity but also significantly reduces the loan amount, and thereby, reduces the rate of interest applicable on the same. This is inversely proportional because the bigger the down payment the lower is the interest rate applicable on the car loan.
    • CIBIL Score - CIBIL score of an applicant is evaluated by State Bank of Travancore 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.

    How CIBIL Score Affects Your State Bank of Travancore Car Loan Interest Rates

    One of the first steps taken by leading Indian Banks like State Bank of Travancore for arriving at a decision regarding the creditworthiness of a prospective borrower is to check out his/her credit score that is provided by CIBIL. The CIBIL TransUnion Score is a 3 digit number that ranges between 300 to 900. An individual having a CIBIL Score of 700-750 and above is considered highly eligible for a loan, by most banks. The credit record of an applicant is reflected by his/her CIBIL score and this is an important factor that affects the interest rate levied on a car loan. Most NBFCs and banks and scrutinize the applicant’s CIBIL score while processing their loan applications and weigh this against other factors in order to come to a loan approval decision. Higher scores ensure greater probability of procuring car loans at an attractive interest rate. Higher CIBIL scores portrays a lower risk on loan defaults and thus, borrowers with a high CIBIL score can avail loans more easily compared to those with low CIBIL scores.

    Key Points to Note About State Bank of Travancore Car Loan Interest Rates

    • Maximum loan quantum offered under the normal car loan scheme is up to Rs.10.00 lakhs and for premium car Loan it is above Rs.10.00 lakhs.
    • EMI/NMI ratio should not exceed 50% for Normal Car Loan (i.e., Loan amount below Rs.10 lakhs).
    • Loan amount offered on Premium car Loan (i.e., loan amount above Rs.10 lakhs) should not exceed 55% of the applicant’s Net Monthly Income.
    • EMI includes EMIs that have to be paid for existing loans and proposed loan.
    • NMI will be equal to the applicant’s Total Gross Income including depreciation if applicable. The statutory and compulsory deductions like Employee Provident Fund, Income Tax, etc. are deducted from this value to arrive at the NMI.
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