Cashing in on customer frenzy to splurge during festival season, banks are leaving no stone unturned to disburse car and two-wheeler loans and enhance their market share.
The country’s largest lender, State Bank of India (SBI), has waived off processing fees on car loans up to December 31, 2015. Bengaluru-headquartered public sector lender Vijaya Bank has also waived off processing fee and inspection charges.
An SBI official said the bank takes on an average one or two days to close disbursals. “But in some cases where the required documents are submitted in one lot, we have gone a step forward and disbursed the loans in a few hours on the same day,” he said.
On interest, the bank offers primacy to women as the interest rate for them is 9.80 per cent compared with 9.85 per cent floating for men. The longest tenure offered by the bank is up to 84 months for car loans, and 60 months for superbike loans (12.65 per cent rate of interest).
Vijaya Bank offers car loans for a maximum tenure for seven years at 10.05 per cent and with maximum 48 hours disbursal time. For two-wheelers, the rate of interest is the same but with only a five-year tenure.
The additional features offered by SBI include Car Loan Overdraft Scheme for new car loan of Rs 3 lakh and above. Repayment in excess of EMI can be deposited and withdrawn subsequently during the currency of the loan. There is no penalty for loan prepayment or pre-closure.
Home loan client edge
As part of the SBI Loyalty Car Loan, existing home loan borrowers get further interest rate concession of 25 basis points, i.e. 9.60 per cent for men and 9.55 per cent for women. The bank also gives 100 per cent finance for car loans under this scheme.
SBI Bangalore Zone-I Deputy General Manager Madhukar Anand said, “We have set up Multi-Purpose Sales Teams (MPSTs) to provide quick sanctions. MPST members collect the documents and reduce turnaround time.”
In a statement, State Bank of Mysore (SBM) said, “We also sanction loan on selected dates and at selected branches for on the Spot Booking, in co-ordination with different car dealers.”
SBM has also waived off processing fees up to November end. SBM is offering car loans with an interest rate of 9.95 per cent and for the customers who have availed housing loans, at 9.85 per cent. For two-wheelers, SBM charges 16.15 per cent rate of interest with one per cent processing fees.
HDFC Bank claims to have launched an auto loan that is disbursed in just 30 minutes using biometric technology. With this, loans for two-wheelers can be approved within 15 minutes, the bank says.
Any person wishing to avail of a loan can walk into an auto dealership and provide his Aadhaar card number and fingerprint. The biometric technology will match these details against consolidated information accessed from several databases to create a customer profile. If eligible, based on the profile, the loan will then be approved and disbursed to the dealer, without any further documentation from the customer.
HDFC Bank Senior Executive Vice-president, Business Head (vehicle loans) Ashok Khanna said, “Convenience lies at the heart of our digital banking initiatives. We believe the 30-minute auto loan will be the next level in financing and address customer needs. If a customer walks into an auto dealership, they can walk out with the vehicle the same day itself, which was not the case earlier.”
HDFC Bank has also launched two-wheeler refinance program ‘Quick Paisa’ for existing two-wheeler loan customers with good repayments. The existing customer can apply for top-up loan through Net Banking and get the loan disbursal in a few seconds.