SBI Advantage Car Loan with Overdraft Facility

[dharmesh]

@saravanan_735 : Whatever you have written is correct, so where is the problem?

Ok, I will explain you again.

Loan taken : Rs.5,00,000.
Interest Rate : 11.25 %
EMI : 8675 per month

Now you deposit Rs.4,00,000 in you OD account, so now EMI would be calculated as against 1,00,000 that is pending. (depositing 4,00,000 in OD account is same as pre paying loan amount, but in OD account you can withdraw the money afterwards as well)

Principal left : Rs, 1,00,000
Interest Rate : 11.25 %
EMI : 1735 per month.

Now all of sudden you have some emergency need of Rs.2,00,000, so you withdraw it from the OD account. so now calculation goes like.

Principal left : Rs, 3,00,000
Interest Rate : 11.25 %
EMI : 5205 per month.

EMI calculation in OD loan is done on daily basis. so when you either deposit or withdraw amount from OD account, from same day your EMI is recalculated on the basis of principal left.

Hope this helps. Let me know if you still need more information.

[saravanan_735]

Thanks Dharmesh. The difference is that I can withdraw money in OD.

[Indian]

dharmesh, excellent write up!
Advantage here is you can dump almost all your money in the loan with out fear, as if need comes you can withdraw money.
This is helpful where people have extra money but not sure to put all the money or not. Will keep this option ready during my next purchase

[dharmesh]

But here is a catch, you cannot deposit the entire principal amount of loan, as it will bring the closure of the loan account. Because this means you have pre paid the entire loan amount.

For this what SBI bank loan adviser said to me is, you always maintain the balance of rs.5000 to rs.10000 less than your principal amount, so what you pay is very less EMI.

[TSIVipul]

How I missed this thread?? This feels addictive..

@Dharmesh:
Thanks for such a wonderful information(I really never knew about it).
Okay my queries are:
Suppose my loan amount is 10,00,000

• Now if I submit 9,00,000 in my account then will that 9,00,000 be considered as paid back amount??
• Will this result in interest being paid only on 1,00,000??
• Will my EMI become smaller and be adjusted to that is paid for just 1,00,000 loan amount??
• Will bank pay us interest on those 9,00,000??
• If I withdraw those 9,00,000 then will again our loan amount be considered as 10,00,000??
• If due to any emergency my account balance fells below the EMI then??

[dharmesh]

• Now if I submit 9,00,000 in my account then will that 9,00,000 be considered as paid back amount??
  Answer: Yes, but you can withdraw the same.
  
• Will this result in interest being paid only on 1,00,000??
  Answer: Yes.
  
• Will my EMI become smaller and be adjusted to that is paid for just 1,00,000 loan amount??
  Answer: Yes.
  
• Will bank pay us interest on those 9,00,000??
  Answer: No. You are already getting 11.25% of interest. Means you are not paying EMI worth 9 lacs Rupees.
  
• If I withdraw those 9,00,000 then will again our loan amount be considered as 10,00,000??
  Answer: Yes (Whatever principal is remaining)
  
• If due to any emergency my account balance fells below the EMI then??
  Dint get the question.

[Indian]

Originally Posted by dharmesh

But here is a catch, you cannot deposit the entire principal amount of loan, as it will bring the closure of the loan account. Because this means you have pre paid the entire loan amount.

For this what SBI bank loan adviser said to me is, you always maintain the balance of rs.5000 to rs.10000 less than your principal amount, so what you pay is very less EMI.

Nice tip again dharmesh! As long as there is no other strings attached other than that +0.25% extra

[TSIVipul]

Originally Posted by dharmesh

• If due to any emergency my account balance fells below the EMI then??
  Dint get the question.

Suppose my installment is 15k and my account balance is 14k then?

[dharmesh]

Originally Posted by TSIVipul

Suppose my installment is 15k and my account balance is 14k then?

I am not sure about the situation, but I can assume that then you need to pay full EMI as per the principal amount.

[Srinr]

@ Dharmesh - Thanks for running this thread, its very informative.

I recently took a Car loan with OD facility from SBI and also opened an SB account with them. After activiating my online banking, I am able to see both my SB a/c as well as Car loan a/c getting displayed in Account summary tab. I was able to transfer funds from my SB a/c to my online OD a/c for my car loan but not vice versa. In funds transfer option I can only see my savings a/c getting displayed.

Do I need to do anything to get my OD a/c also to get displayed in funds transfer option. I do not want to visit branch every time to transfer from OD a/c to SB a/c. I remember my loan officer too telling me that this transfer can only be done in the branch

[vikasbansal4u]

I took SBI Advantage Car loan in 2011 but without OD facility from SBI and also opened an SB account with them. After activiating my online banking, I am able to see both my SB a/c as well as Car loan a/c

But I came to know about this feature recently through these posts that such a feature existed and I never took advantage of it.

Can I avail this feature now, do someone has any knowledge about it?

[dharmesh]

Sorry just missed the thread.

Originally Posted by Srinr

@ Dharmesh - Thanks for running this thread, its very informative.

I recently took a Car loan with OD facility from SBI and also opened an SB account with them. After activiating my online banking, I am able to see both my SB a/c as well as Car loan a/c getting displayed in Account summary tab. I was able to transfer funds from my SB a/c to my online OD a/c for my car loan but not vice versa. In funds transfer option I can only see my savings a/c getting displayed.

Do I need to do anything to get my OD a/c also to get displayed in funds transfer option. I do not want to visit branch every time to transfer from OD a/c to SB a/c. I remember my loan officer too telling me that this transfer can only be done in the branch

I am actually not sure, what we need to do, because till now I have transfered any money to my OD account. . I think so best is to get information from bank.

Originally Posted by vikasbansal4u

I took SBI Advantage Car loan in 2011 but without OD facility from SBI and also opened an SB account with them. After activiating my online banking, I am able to see both my SB a/c as well as Car loan a/c

But I came to know about this feature recently through these posts that such a feature existed and I never took advantage of it.

Can I avail this feature now, do someone has any knowledge about it?

You need to contact your bank loan officer and talk to him about the same.


Sorry to both of you as I was not able to help you resolving your quieries.

[rohit0103]

I have a query about SBI Advantage loan. But before that, 1 basic question.
SBI offers loans for Ex-showroom price + Road Tax+ Insurance, abt 80% of total.

If I decide to get the Road Tax and Insurance done by myself, will SBI give me a loan for that amount ? The Manager said, he will issue cheque only in name of the Dealer.

[soumen.sam]

Hello guys,

Anyone here who has taken car loan from SBI? I’m going to purchase a car (Hyundai Verna Fluidic) and I’m really interested to take the loan from SBI due to its 0% pre-payment facility and overdraft facility. Otherwise at the same rate I’m getting loan approved from Magma Corp. But all private back has 5% pre-payment charges and other hidden.

I visited my nearest SBI branch (in Kolkata) for the car loan (5 Lack) and I do have a SBI account in another branch for more than a years. But that branch don’t process car loans.

So where I visited it’s a largest and oldest branch in my area and with their car loan form they also provided a Guarantor require form. The Guarantor requires document is almost same as mine and it’s a lot of requirements. They were also asking if the Guarantor is a Govt. employee that would be good.

So my question is, is it really require a Guarantor for a car loan? I never heard that.

Also they are no providing any clear information about the overdraft facility. My question is does all the SBI car loan is overdraft by default or it’s a special feature. Overdraft means where I can pay any larger amount any time and after the payment the interest and EMI will recalculate with the outstanding balance and the remaining EMI will reduce. I also heard even I can withdraw money from there if require and again EMI and interest will recalculate accordingly.

I’m really unclear about these points, when I visited TWO SBI bank. I felt like the both BRANCH MANAGERS even never heard about the SBI car loan with overdraft facility . One clearly said how can a car loan could be an overdraft account ?

[dharmesh]

When I took Overdraft car loan, the manager informed me that I am first person to apply for loan with overdraft facility.