Bank offers schemes for Nano

Tata Nano is said to be a common man car promising value for money with its low pricing. On the other hand banks which are the preferred lenders for the car are offering various schemes. The schemes being offered by the banks are almost uniform in their charges and interest rates; only the quick and efficient service provided by them will help them score over their competitors.

The Nano loan schemes are being offered mainly by the public sector banks, with the big daddy, State Bank of India along with its associate banks is setting the movement in terms of interest rates and down payment. Other public sector banks are Central Bank of India, Union Bank of India, Indian Bank, Corporation Bank and Punjab National Bank. The private sector players include ICICI Bank and Kerala-based Federal Bank.

SBI’s, potential Nano customer is an employed professional drawing Rs 75,000 a year or a self-employed person making Rs 1 lakh a year.

SBI in its scheme is offering a Nano booking loan product with a one-time upfront booking fee of Rs 2,999 for the base model (which has an ex-showroom price of Rs 1.2 lakh in Delhi), Rs 3,499 for the intermediate model (Rs 1.40 lakh) and Rs 3,999 (Rs 1.70 lakh) for the high-end model.

An SBI official pointed out the eligibility criteria has been relaxed as the Tata Nano is designed to meet the demands of low-income customers.

If the customer name gets listed in the list of the lucky ones to get allotment of Nano, then the booking loan can be converted to a SBI Nano car loan. The loan will be provided up to a maximum of seven years at 11.75-12 per cent interest. The margin requirement for the loans will be set to 15 per cent. That is, for Rs 1 lakh loan, the customer would have to pay Rs 15,000 upfront to get the bank to give a loan for Rs 85,000.

Union Bank of India has set the minimum down payment for the base model at Rs 2,950 for the booking amount, for the second model it is Rs 3,459 and for the higher model it is Rs 3,952.

In case a customer wants to take a car loan by himself for the Nano, the bank’s auto loans rate is 11 per cent for three years and 11.25 per cent for three to five years.

An official from the bank told, “We expect very good response from rural and semi-urban areas.”

Corporation Bank has also set Rs 2,999 as down payment for the booking amount of the base model, Rs 3,744 for the second model and Rs 4,231 for the third model. The bank is charging 11 per cent in case the customer opts for a car loan once he or she gets allotment.

An official from the bank explained that at these rates, the monthly repayment will stand to Rs 3,274 per lakh for a three-year loan, Rs 2,187 on a five-year loan and Rs 1,739 for a seven-year loan.

ICICI Bank is hoping to take benefit from on its online booking facility through both the bank’s Web site and ICICI Direct.com, informed Mr N.R. Narayanan, General Manager, retail loans, He added, “We are very bullish about the Nano booking online as it offers huge convenience to our customers. ICICI Direct also has a lot of customers who log on for share trading”. The bank is offering car loans at 13.5 per cent for three to five years.