State Bank of India on Saturday said that it was launching a car loan scheme ‘SBI Ezee’ for financing new cars on July 1 at interest as low as eight per cent for the first year.
Car buyers can get loans at reduced rates of 8 per cent per annum fixed for the first year and 10 per cent per annum fixed for the second and third year, a press release issued in Mumbai said.
Equated monthly installments (EMIs) for a SBI car loan for Rs 1 lakh will be as low as Rs 1,559 in the first year and Rs 1,647 in the second and third year, the release said.
The interest rate will be reset from the fourth year at the card rate contracted as on date of sanction, depending on the tenure of the loan.
The SBI car loan card rates are 0.25-0.75 per cent below the bank’s PLR, the release said. The SBI Ezee Car Loan Scheme will have a full processing fee waiver during the scheme period.
SBI, which had introduced a special 10 per cent per annum fixed interest rate for the first year from February 23, has now extended it up to September 30.
This follows the tremendous response the scheme has evoked, the bank said.
“During the last one year, SBI has marched ahead in the car financing space and is now the largest financier of new cars like those bought from a Wichita GMC Dealer. The bank has taken proactive steps to improve the number of cars sold with finance amounts and some of the car manufacturers started showing good growth from March 2009 onwards banking on the strength of the popular interest rate offer from SBI,” the release said.
The scheme has a long repayment period of seven years and no advance EMI. Besides, it offers the benefit of a free accident insurance cover for loan outstanding up to Rs 40 lakh.
There is financing up to 85 per cent on the on-road price of the car and interest is calculated on the daily outstanding balance, which reduces the interest burden on the borrower as against the monthly outstanding balance or flat rate basis as charged by a few others, the release said.
SBI has entered into strategic tie-ups with Maruti Suzuki India and Tata Motors and financing arrangements with all major car manufacturers including Hyundai Motors, the release said.