SBI Bank car loan: Eligibility, documentation, fees and charges etc

State Bank of India (SBI), one of the leading public-sector banks in the country, offers car loans at competitive interest rates, so that you can purchase your dream car in an easy and hassle-free process.

Getting an SBI car loan is easy, as long as you have the right documentation, and have the appropriate credit score. Furthermore, like most banks, SBI offers car loans for both brand new cars, as well as a second-hand car. However, do note that the rate of interest for a second-hand car will be higher than a brand-new car. Furthermore, SBI car loans can pay up to 90 percent of the on-road price of your new car.

SBI offers you attractive and affordable EMI schemes that can let anybody buy their dream vehicle. You can avail a car loan from SBI irrespective of whether you are salaried or self-employed.

Why choose SBI car loan?

While all banks and NBFCs offer car loans, you may want to consider SBI for features such as its easy-to-use, and paperless loan application; competitive rates of interests, irrespective of whether you are purchasing a new car or a second-hand one.

Furthermore, SBI’s loans ensure that you do not have to burn a hole in your pocket by paying EMIs. Irrespective of the car you purchase – be it your first hatchback or a powerful SUV – you can be assured that the EMIs aren’t exorbitant.

 

Features of SBI Car Loan

Some of the features SBI offers while providing you a car loan are as follows:

  • You can avail a loan with competitive interest rates. When it comes to a new vehicle, the lowest interest rate that SBI offers is 9.4 percent, as of May 2019. Do note that this rate of interest is for a new car
  • You have seven years to repay the loan, which makes SBI’s car loan offer one of the longest repayment tenures
  • SBI offers financing on on-road price: On-Road price includes registration, insurance and extended warranty/ total service package/ annual maintenance contract/ cost of accessories
  • Interest calculated on Daily Reducing Balance
  • You don’t have to pay an advanced EMI
  • There is an optional SBI Life Insurance Cover

Benefits of SBI car loan

Some of the biggest benefits you can avail with an SBI car loan are the following:

  • Zero processing fees on all car loan products
  • You are eligible for a loan of up to 90 percent of on-road price
  • You don’t have to prepay an EMI
  • There is no foreclosure charge in case you want to pay the loan off early
  • You don’t have to pay an EMI in advance
  • SBI car loans are easy on the pocket i.e. your monthly EMIs will be affordable, and let you live a comfortable life for the rest of the month
  • You can avail a car loan from SBI with a minimum annual salary of Rs 2.5 lakh if you are salaried, and Rs 3 lakh if you are self-employed
  • SBI car loans are easily available to both salaried and self-employed individuals

SBI car loan eligibility criteria

To be eligible for an SBI car loan for a new car, you need to be the following

  • You need to be a minimum of 21 years and a maximum of 65 years to apply for a loan
  • When it comes to income, you need to earn a minimum of Rs 2.5 lakh if you are salaried, and Rs 3 lakh in case you are self-employed. In case you are a farmer or your income only comes from agriculture, then you have to have a minimum annual salary of Rs 4 lakh

When it comes to a used car, you are eligible for a loan under the following conditions

  • The car cannot be over eight years old
  • You need to be a minimum of 21 years and a maximum of 65 years to apply for a loan
  • When it comes to income, you need to earn a minimum of Rs 2.5 lakh if you are salaried, and Rs 3 lakh in case you are self-employed. In case you are a farmer or your income only comes from agriculture, then you have to have a minimum annual salary of Rs 4 lakh
  • You can get a minimum of Rs 3 lakh and maximum of Rs 10 lakh as loan for a used car

When it comes to credit score, the individual should have a CIBIL score of above  750. In case it is less than 750, chances are that you may not get the loan. However, in case you do, you may be required to pay a higher rate of interest.

Documents required while applying for an SBI car loan

For salaried individuals

  • Your bank statement for past six months
  • Two passport-sized photographs
  • Proof of identity: any one of the following – passport, Aadhaar, voter id
  • Address proof: any one of the following – utility bills, ration card, Aadhaar card, passport
  • Latest salary slips
  • Form 16
  • Income Tax returns of the past two years

For self-employed individuals

  • Your bank statement for the past six months
  • Two passport-sized photographs
  • Proof of identity – any one of the following – passport, Aadhaar, voter id
  • Proof of address – any one of the following – utility bills, ration card, Aadhaar card, passport
  • Registration certificate of your establishment
  • Form 16
  • Audited balance sheet
  • Income Tax returns for the past two years

In case you are a farmer

  • Your bank statement for the past six months
  • Two passport-sized photographs
  • Proof of identity – any one of the following – passport, Aadhaar, voter id
  • Proof of address – any one of the following – utility bills, ration card, Aadhaar card, passport
  • Government approved proof of agricultural activity

SBI Car Loan fees and charges

Processing fees: When it comes to applying for a car loan, SBI charges a processing fee of 0.51 percent of the loan amount sanctioned. This can be anything between Rs 1020 and Rs 10,200 with applicable GST.

Foreclosure charges: In case you want to repay your entire loan amount before the tenure ends, you will be required to pay one EMI with Zero prepayment

SBI car loan interest rates

Scheme Interest Rate w.e.f. 18.06.2019
SBI Car Loan, ii) NRI Car Loan, iii) Assured Car Loan Scheme  

 

From 9.20% to 9.90%

 

 

Loyalty Car Loan Scheme

SBI Car Loan, NRI Car Loan For Men: 1.35% above 1-year MCLR i.e. 9.80% p.a.

For Women: 1.30% above 1-year MCLR i.e. 9.75% p.a.

 

(CIC Based rates are applicable)

Certified Pre-owned Car Loan Scheme Men: 2.45% above 1-year MCLR i.e. 10.90% p.a.

For Women: 2.40% above 1-year MCLR i.e. 10.85% p.a.

Certified Pre-owned Car Loan Scheme From 11.00% to 12.00% (CIC Based rates are applicable).
Super Bike Loan Scheme 3.45% above 1-year MCLR i.e. 11.90% per annum

SBI Car Loan EMI Calculator

Using SBI’s car loan EMI calculator is easy. First find out of the price of the car and the model you want to purchase and figure out how much down payment you can make. Subtract that from the price of the car to get at the amount of loan you need. Input all these data in MoneyControl’s car loan calculator and it will show you the EMI that you need to pay.

However, you must remember that in case you select a longer tenure, the EMI will go down, but the total interest you pay goes up. For example, let us say you are availing a car loan of Rs 6 lakh at 9.5 percent per annum interest rate and tenure of three years. The EMI will be Rs 19,080, while you have to pay an interest of Rs 86,875. If you select a tenure of five years, the EMI drops to Rs 12,602, but the interest payment is now Rs 1,56,068.

You can calculate the EMI you need to pay based on the following formula

EMI = [P x R x (1+R)^N]/[(1+R)^N-1];

where, P, R, and N are the variables, which means the EMI value will change every time you change any of the 3 variables.

What do the three variables mean?

P = Principal amount, which is the original amount lent to you by the bank. The greater your loan, higher the EMI you pay the bank

R = Rate of interest, which is the rate at which interest is charged on the principal loan amount. This value has a bearing on your EMI amount and it is important to compare rates of interest before opting for a loan

N = number of years for which the loan has been taken i.e tenure. Since the loan repayment is done every month, the tenure is calculated in months and not years. So, in case you have a 5-year period to pay off a loan, the tenure is 60 months.

 

Checking your SBI car loan application status

Tracking the online status of your car loan is a simple and quick procedure. All you need to do is visit the bank’s website, enter the type of loan you have applied for, the application number, and your date of birth into the ‘check application status’ page. Click on submit, and check the status of the loan application.

In case you’re doing it online

  • Visit the State Bank of India website
  • Go to SBI’s car loan application status page
  • Enter the type of loan from the drop-down box
  • Enter your application id
  • Enter your date of birth
  • Enter the numbers to prove that you’re not a robot
  • Recheck your details
  • Click Submit

Once you are inside the page, you have in front of you, details of your loan application, and whether the loan has been accepted.

In case you’re doing it offline, know that SBI has an effective customer care centre that is accessible through the bank’s 24×7 call centre number. The customer care executive will take your call and ask for personal details to verify your identity. The toll-free number of State Bank of India is 1800 11 2211 and 1800 425 3800. Here is an alternate SBI Customer Care number – 080-26599990.

FAQs

Is it required to have a guarantor for the loan?

Not necessarily. In most cases the bank does not require a guarantor for the loan. However, if your income level does not meet the criteria of the bank, you may have to get a guarantor or co-applicant for your loan.

What are the documents required for a car loan?

You will need to submit an income proof, identity proof, age proof and address proof. As income proof you can submit three months’ salary slips or you income tax returns or your bank statements. As age and identity proof, you can submit Aadhaar Card, PAN Card, driving licence, voter’s ID and any other government identity proof. As your address proof you have to submit electricity/ gas/ telephone bill, Aadhaar Card, Voter’s ID, Ration Card or any other government address proof. If you are a self-employed proprietor or partner proprietor, you have to submit your audited statement as your income proof and your income tax returns.

How much can I borrow as a car loan from SBI?

You can borrow as much as three times your annual salary if you are a salaried individual. If you are a proprietor, you can borrow up to six times your annual income as loan. The bank disburses loans up to Rs 3 crore on an array of models of cars available in the market.

What is the importance of a collateral in a loan?

A collateral is required when you are taking a loan against your car. New car loans need not have a collateral as the cars being bought will act as collateral. In case of a loan against your car, you pledge the car as a collateral for loan. In case you default on the payment of the loan, the bank may seize the car. However, a collateral is not required for purchasing a new car using loan as the new vehicle will act as the collateral itself. So if you default on the loan, the bank may seize your car.

What happens if I default on my EMI?

If you default on your loan or miss an EMI, the bank will charge a penalty to you every month. The SBI Bank charges a 2 percent overdue charge per month if your miss your payments or don’t make your payments on time.

Can I pay my outstanding all at once?

Yes, you can pay your outstanding all at once only after you have completed six months after availing the car loan. Foreclosure charges may be applicable on early closure depending on your scheme. If you close your loan account within a year after completing the seventh EMI, you will be charged 6 percent on the principal outstanding. If the loan is closed within 13 and 24 months since the first EMI, a foreclosure charge of 5 percent of the principal outstanding will be charged. If the loan account is closed after 24 months from the first EMI, a foreclosure charge of 3 per cent is levied.

Is it important to have a good credit score while applying for a car loan?

Yes, you must have a good credit score to be eligible to apply for a car loan. The credit score of an applicant is a measure for the bank to decide how well-deserving the candidate is for a loan. If you have a habit of maintaining your financials and meeting your financial commitments timely, you are less likely to default on a loan. Therefore you are a good candidate for a loan. A credit score above 750 is considered good enough for a car loan.

Does a car loan have any tax benefit for the borrower?

No. Tax benefits are available to borrowers on education loan and housing loan alone. There are no tax benefits on car loans.

What is the Balloon EMI scheme?

The other custom-fit payback option that SBI offers to its customers is the Balloon EMI scheme where you can pay lower EMIs throughout the tenure and a larger lump sum amount at the end of the term. With this scheme you can choose to own a bigger car at the cost of a smaller car. For example you take a loan for 60 months. Now, you can pay 60 percent of your balance until the 59th month and pay 40 percent of the outstanding in the 60th month.

How can I compare the best loan offers for a new car?

SBI helps you compare, research and read reviews on new cars. You can search for cars by brands, prices and EMIs. The bank also provides you test drive assistance available on a wide range of cars for enabling to choose the right car for your needs. You can also visit third party websites to compare the cars and decide on a loan.

Does SBI provide insurance to cars bought with loan?

SBI offers a comprehensive insurance tool called ‘Suraksha Kawach’ which offers protection to individuals against Permanent Total Disability, Accidental Death and Accidental Hospitalisation.

How do I know I am eligible for a car loan?

Before applying for a car loan, you can check if you are eligible for a loan. You can either visit an SBI Bank branch and check your eligibility. Or you can check your eligibility instantly on the bank’s website. You can key in your details such as your employment status, total years of employment, your ITR details. The tool will tell you if you are eligible for a car loan and what is the amount that you are eligible to get.

How long does it take the bank to pass my loan?

SBI can approve a car loan application within 10 minutes. If the documentation on your application is complete, your car loan application will be approved instantly. It will take around a week to disburse the funds in your account. If you are an existing SBI Customer, you can get your loan funds credited to your account within seconds of getting an approval.

What are the features that decide the interest rate for a car loan?

The SBI Bank decides what interest rate you have to pay based on your credit score, your income, your customer relationship with the bank and the car’s age and condition. If you have a credit score of 750 above, you will get a favourable interest rate. If your income is high, you are highly eligible for a car loan. The interest rate will also depend on your income. If you have a good track record with your bank in terms of other loans or other products, you are likely to get a discount on the interest rate. Because the car being purchased acts as s collateral against the loan, the make, age and condition of the car are very important in determining the interest rates. If you default on your loan, the bank may seize your car.

[“source=moneycontrol”]