The Tata Nano is now going to be within the reach of every individual who wanted to buy a car but was constrained by his budget.
The largest lender, State Bank of India (SBI) has reduced the income eligibility for Nano aspirants from Rs 1 lakh to Rs 75,000 a year. This means that a person earning close to Rs 6250 per month is now eligible to get a car loan for Nano.
An SBI official said, "Now individuals with a monthly salary of Rs 6,250 are eligible to get finance for the Nano."
However the aspirants have to be watchful and compare the interest rates offered by the different banks. Tata Motors that has started Nano booking from April 9th has approved 19 banks and non-banking finance companies (NBFCs) for the purpose.
The booking amount of Canara Bank has been lowest amongst the upfront amount of various banks. The bank has set booking amount for the base model at Rs 2,850 where as for CX and LX model, the upfront is kept at Rs 3,499 and Rs 3,999 respectively.
Most of the banks are demanding an upfront in the range of Rs 2,950 to Rs 2,999 for the base model. Meanwhile there are few other banks like Central Bank of India, Indian Bank and United bank of India that are asking for a slightly higher booking amount of Rs 3256, Rs 3343 and Rs 3137 respectively. While some others like State Bank of Indore is demanding a booking amount of Rs 3,516 and Punjab National Bank is charging the highest upfront of Rs 3,733.
SBI is charging a booking amount of Rs 2,999 that will be converted to a SBI Nano car loan if the customer is allotted the car. The bank will extend the loan up to a maximum of seven years at an interest rate of 11.75-12%. The margin requirement for the loan is going to be 15%.
If a customer wants to avail a car loan for the Nano from United Bank of India then the interest rate charged will be 9%. This is cheapest rate offered in the market. Most other banks are offering interest rates in the range between 11% and 11.75%.
Meanwhile if the customer does not get the allotment on a computer-generated random lottery in July and also does not opt to keep the money with the bank for second round of allotment, his booking amount will be forfeited.
On the other hand if he gets the allotment, he will have to look for financing options in terms of cost of converting their booking loans into auto retail loans. Customers can convert their booking loans into auto loans from the same lender. However if one chooses to change the financier then a penalty may be charged from him.