SBI Car Loan interest rates are calculated based on monthly reducing balance. The Bank offers the lowest available interest on its car loan schemes. It has a very attractive interest rate exclusively for women. The car loan is offered for the purpose purchase of new Cars/used cars, Multi Utility Vehicles (MUVs) and Semi Utility Vehicles (SUVs).
SBI Car Loan Interest Rates 2018
| Interest Rate | For Women – 9.20% For Men – 9.25% |
| Maximum Loan Amount | For borrowers who earn Net Annual Income less than Rs. 10 lakhs: Maximum 85% of ‘on road price’ of the car. For borrowers who earn Net Annual Income of Rs. 10 lakhs and above: Maximum 80% of ‘on road price’ or 85% of ‘ex showroom price’ of the car, as chosen by the borrower. |
| Minimum & Maximum Car Loan Tenure | Minimum Tenure – 12 months Maximum Tenure – 84 Months (7 years) |
| Processing Fees/Charge | 0.51% of the loan amount subject to Minimum of Rs.1020/- and maximum of Rs. 10200/- |
| Pre-Closure Charges | Nil |
| EMI per Lakh (for a 7 year loan tenure at 9.85% interest) | Rs. 1,652* |
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.
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 a 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 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.
- 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 for 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.
Key Points to Note About SBI Car Loan Interest Rates
- SBI Car Loan Scheme offers maximum loan quantum of 85% of the ex-showroom price
- Minimum annual income requirement to avail the loan is Rs.3,00,000.
- Interest on car loan is calculated based on monthly reducing balance.
- The Bank transfers the car loan value directly to the concerned dealer’s account by way of RTGS/NEFT facility or, if the account is maintained in SBI the amount is credited through CBS system.
- Floating rate of interest is charged on the car loan on a daily reducing balance at monthly rest. This rate of interest might be revised from time to time if there are any changes in Base Rate or when the Bank extends the repayment period or reduces/increases the EMI as per its discretion.
