CHAPTER I

Introduction to the topic

AN INTRODUCTION
Here lies a question that a person who does not have a good amount of money at a particular time has no
right to see dreams? Is he not authorized to fulfill his desires on time? Should he stop dreaming? No,
because there is a solution for these queries. Loans Are available for these purposes only.
Loans are provided to people for such critical circumstances which may occur at any time. In anyone's
life a situation may come when all of sudden he may require cash. A moment when you do not want to
borrow money from your relatives.
There may occur any kind of emergency when you need a huge amount of money. There are various types
of loans like home loans, personal loans, student loans, business loans etc. You can take any type of loan
you need. For each and every kind of need
Loans are available with the banks to suit him. Personal loans are available for general home purposes
like buying a luxurious car, going for a holiday trip, educational purpose, home improvement, wedding
ceremony, etc. Many of your desires can be fulfilled by this loan.
Housing loans are available for personal requirements like, purchasing a home, renovating the home
etc.To start a new business you require a huge amount of money. A person willing to set up a business
may not have that much cash which can meet his requirements. For this business loans are available. You
can get business loans to start and well establish a new business in the market.
Whatever may be the kind of loan, all have full fledged facilities. All kinds of loans have their own
importance. Above all, the need for money explains the importance of loans. Applying for Loans is very
easy. Apply for that loan whichever is needed to you. But before applying you should go through different
lender's policies and apply for that lender which is beneficial for you.
Different lenders have different policies. If you get a loan for a long term with a low rate of interest then
it is beneficial for you. Due to competition, lenders are trying their best to attract people by providing
different schemes which in turn is good for people.
Banks just try to study the equilibrium of the loan in a particular market at a particular time. This allows
the banks to get the perfect rate of interest for a loan. They also study what the other banks have to offer.
This indirectly helps the common man who has different options and due to competition he will get a
cheaper loan.

ABOUT THE PROJECT:

1. Title Of The Project-:

The present study is titled as “ VEHICLE LOAN” and it was done with a special reference to
the STATE BANK OF INDIA.

2. Objectives-:
 To find out the various types of loan products which banks offer.
 To know the importance of loans in the life of a common man.
 To find out the documents needed by a bank for a particular loans also the tax benefits earned
by a person for taking a loan.
 To study the interest rates asked by the bank for vehicle loans.
3. Data and Methodology-:
For the purpose of this study on “VEHICLE LOAN” both primary data and secondary data were
used.
Primary Data -:
Visit to the banks, Interview with the branch managers and staff of the banks.

Secondary Data-:
Books, websites, newspapers, pamphlets.
CHAPTER II
Profile of the bank
PROFILE OF THE SBI
State Bank of India – Bank Profile
State Bank of India (SBI) is the largest Indian banking and financial services company (by
turnover and total assets) with its headquarters in Mumbai, India. It is state-owned. The bank
traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of
the Bank of Calcutta, making it the oldest commercial bank in the Indian
Subcontinent. Bank of Madras merged into the other two presidency banks, Bank of Calcutta and
Bank of Bombay to form Imperial Bank of India, which in turn became State Bank of India. The
government of India nationalized the Imperial Bank of India in 1955, with the Reserve Bank of
India taking a 60% stake, and renamed it the State Bank of India. In 2008, The government took
over the stake held by the Reserve Bank of India.

The origin of state Bank Of India

The origin of the State Bank of India goes back to the first decade of the nineteenth century
with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806. Three years later the
bank received its charter and was re-designed as the Bank of Bengal (2 January 1809). A unique
institution, it was the first joint-stock bank of British India sponsored by the
Government of Bengal. The Bank of Bombay (15 April 1840) and the Bank of Madras (1 July
1843) followed the Bank of Bengal. These three banks remained at the apex of modern banking
in India till their amalgamation as the Imperial Bank of India on 27 January 1921.
Primarily Anglo-Indian creations, the three presidency banks came into existence either as a
result of the compulsions of imperial finance or by the felt needs of local European commerce
and were not imposed from outside in an arbitrary manner to modernize India's economy.
The origin of the State Bank of India goes back to the first decade of the nineteenth century
with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806. Three years later the
bank received its charter and was re-designed as the Bank of Bengal (2 January 1809). A unique
institution, it was the first joint-stock bank of British India sponsored by the Government of
Bengal. The Bank of Bombay (15 April 1840) and the Bank of Madras (1 July 1843) followed
the Bank of Bengal. These three banks remained at the apex of modern banking in India till their
amalgamation as the Imperial Bank of India on 27 January 1921.
Primarily Anglo-Indian creations, the three presidency banks came into existence either as result
of the compulsions of imperial finance or by the felt needs of local European commerce and
were not imposed from outside in an arbitrary manner to modernize India's economy. Their
evolution was, however, shaped by ideas culled from similar developments in Europe and
England, and was influenced by changes occurring in the structure of both the local trading
environment and those in the relations of the Indian economy to the economy of Europe and the
global economic framework.
 Bank of Bengal H.O.
Establishment
The establishment of the Bank of Bengal marked the advent of limited liability, joint-stock
banking in India. So was the associated innovation in banking, viz. the decision to allow the
Bank of Bengal to issue notes, which would be accepted for payment of public revenues within a
restricted geographical area. This right of note issue was very valuable not only for the Bank of
Bengal but also its two siblings, the Banks of Bombay and Madras. It meant an accretion to the
capital of the banks, a capital on which the proprietors did not have to pay any interest. The
concept of deposit banking was also an innovation because the practice of accepting money for
safekeeping (and in some cases, even investment on behalf of the clients) by the indigenous
bankers had not spread as a general habit in most parts of India. But, for a long time, and
especially up to the time that the three presidency banks had a right of note issue, bank notes and
government balances made up the bulk of the investible resources of the banks.
The three banks were governed by royal charters, which were revised from time to time. Each
charter provided for a share capital, four-fifth of which were privately subscribed and the rest
owned by the provincial government. The members of the board of directors, which managed the
affairs of each bank, were mostly proprietary directors representing the large European managing
agency houses in India. The rest were government nominees, invariably civil servants, one of
whom was elected as the president of the board.

Group Photograph of Central Board (1921

Business
The business of the banks was initially confined to discounting bills of exchange or other
negotiable private securities, keeping cash accounts and receiving deposits and issuing and
circulating cash notes. Loans were restricted to Rs.one lakh and the period of accommodation
was confined to three months only. The security for such loans was public securities, commonly
called Company's Paper, bullion, treasure, plate, jewels, or goods 'not of a perishable nature's
opium, indigo, salt woolens, cotton, cotton piece goods, mule twist and silk goods were also
granted but such finance by way of cash credits gained momentum only from the third decade of
the nineteenth century. All commodities, including tea, sugar and jute, which began to be
financed later, were either pledged or hypothecated to the bank. Demand promissory notes were
signed by the borrower in favor of the guarantor, which was in turn endorsed to the bank.
Lending against shares of the banks or on the mortgage of houses, land or other real property
was, however, forbidden.
Indians were the principal borrowers against deposit of Company's paper, while the business of
discounts on private as well as salary bills was almost the exclusive monopoly of individuals
Europeans and their partnership firms. But the main function of the three banks, as far as the
government was concerned, was to help the latter raise loans from time to time and also provide
a degree of stability to the prices of government securities.

Old Bank of Bengal

Major change in the conditions
A major change in the conditions of operation of the Banks of Bengal, Bombay and Madras
occurred after 1860. With the passing of the Paper Currency Act of 1861, the right of note issue
of the presidency banks was abolished and the Government of India assumed from 1 March 1862
the sole power of issuing paper currency within British India. The task of management and
circulation of the new currency notes was conferred on the presidency banks and the
Government undertook to transfer the Treasury balances to the banks at places where the banks
would open branches. None of the three banks had till then any branches (except the sole attempt
and that too a short-lived one by the Bank of Bengal at Mirzapore in 1839) although the charters
had given them such authority. But as soon as the three presidency bands were assured of the free
use of government Treasury balances at places
where they would open branches, they embarked on branch expansion at a rapid pace. By 1876,
the branches, agencies and sub agencies of the three presidency banks covered most of the major
parts and many of the inland trade centers in India. While the Bank of Bengal had eighteen
branches including its head office, seasonal branches and sub agencies, the Banks of Bombay
and Madras had fifteen each.

Bank of Madras Note Dated 1861 for Rs.10

Presidency Banks Act
The presidency Banks Act, which came into operation on 1 May 1876, brought the three
presidency banks under a common statute with similar restrictions on business. The proprietary
connection of the Government was, however, terminated, though the banks continued to hold
charge of the public debt offices in the three presidency towns, and the custody of a part of the
government balances. The Act also stipulated the creation of Reserve Treasuries at Calcutta,
Bombay and Madras into which sums above the specified minimum balances promised to the
presidency banks at only their head offices were to be lodged. The Government could lend to the
presidency banks from such Reserve Treasuries but the latter could look upon them more as a
favor than as a right.

Bank of Madras
The decision of the Government to keep the surplus balances in Reserve Treasuries outside the
normal control of the presidency banks and the connected decision not to guarantee minimum
government balances at new places where branches were to be opened effectively checked the
growth of new branches after 1876. The pace of expansion witnessed in the previous decade fell
sharply although, in the case of the Bank of Madras, it continued on a modest scale as the profits
of that bank were mainly derived from trade dispersed among a number of port towns and inland
centers of the presidency.
India witnessed rapid commercialisation in the last quarter of the nineteenth century as its
railway network expanded to cover all the major regions of the country. New irrigation networks
in Madras, Punjab and Sind accelerated the process of conversion of subsistence crops into cash
crops, a portion of which found its way into the foreign markets. Tea and coffee plantations
transformed large areas of the eastern Terais, the hills of Assam and the Nilgiris into regions of
estate agriculture par excellence. All these resulted in the expansion of India's international trade
more than six-fold. The three presidency banks were both beneficiaries and promoters of this
commercialisation process as they became involved in the continent.

Bank of Bombay
While the Banks of Bengal and Bombay were engaged in the financing of large modern
manufacturing industries, the Bank of Madras went into the financing of large modern
manufacturing industries, the Bank of Madras went into the financing of small-scale industries in
a way which had no parallel elsewhere. But the three banks were rigorously excluded from any
business involving foreign exchange. Not only was such business considered risky for these
banks, which held government deposits, it was also feared that these banks enjoying government
patronage would offer unfair competition to the exchange banks which had by then arrived in
India. This exclusion continued till the creation of the Reserve Bank of India in 1935.

Presidency Banks of Bengal

The presidency Banks of Bengal, Bombay and Madras with their 70 branches were merged in
1921 to form the Imperial Bank of India. The triad had been transformed into a monolith and a
giant among Indian commercial banks had emerged. The new bank took on the triple role of a
commercial bank, a banker's bank and a banker to the government. But this creation was
preceded by years of deliberations on the need for a 'State Bank of India'. What eventually
emerged was a 'half-way house' combining the functions of a commercial bank and a
quasi-central bank.
The establishment of the Reserve Bank of India as the central bank of the country in 1935 ended
the quasi-central banking role of the Imperial Bank. The latter ceased to be bankers to the
Government of India and instead became an agent of the Reserve Bank for the transaction of
government business at centers at which the central bank was not established. But it continued to
maintain currency chests and small coin depots and operate the remittance facilities scheme for
other banks and the public on terms stipulated by the Reserve Bank. It also acted as a bankers'
bank by holding their surplus cash and granting them advances with it at many places where the
Reserve Bank did not have offices. The bank was also the biggest tenderer at the Treasury bill
auctions conducted by the Reserve Bank on behalf of the Government.

Imperial Bank

The establishment of the Reserve Bank simultaneously saw important amendments being made
to the constitution of the Imperial Bank converting it into a purely commercial bank. The earlier
restrictions on its business were removed and the bank was permitted to undertake foreign
exchange business and executor and trustee business for the first time. The Imperial Bank during
the three and a half decades of its existence recorded an impressive growth in terms of offices,
reserves, deposits, investments and advances, the increases in some cases amounting to more
than six-fold. The financial status and security inherited from its forerunners no doubt provided a
firm and durable platform. But the lofty traditions of banking which the Imperial Bank
consistently maintained and the high standard of integrity it observed in its operations inspired
confidence in its depositors that no other bank in India could perhaps then equal. All these
enabled the Imperial Bank to acquire a pre-eminent position in the Indian banking industry and
also secure a vital place in the country's economic life.
 Stamp of Imperial Bank of India

When India attained freedom, the Imperial Bank had a capital base (including reserves) of
Rs.11.85 crores, deposits and advances of Rs.275.14 crores and Rs.72.94 crores respectively and
a network of 172 branches and more than 200 sub offices extending all over the country.

First Five Year Plan

In 1951, when the First Five Year Plan was launched, the development of rural India was given
the highest priority. The commercial banks of the country including the Imperial Bank of India
had till then confined their operations to the urban sector and were not equipped to respond to the
emergent needs of economic regeneration of the rural areas. In order, therefore, to serve the
economy in general and the rural sector in particular, the All India Rural Credit Survey
Committee recommended the creation of a state-partnered and state sponsored bank by taking
over the Imperial Bank of India, and integrating with it, the former state-owned or state-associate
banks. An act was accordingly passed in Parliament in May 1955 and the State Bank of India
was constituted on 1 July 1955. More than a quarter of the resources of the Indian banking
system thus passed under the direct control of the State. Later, the State Bank of India
(Subsidiary Banks) Act was passed in 1959, enabling the State Bank of India to take over eight
former State-associated banks as its subsidiaries (later named Associates).
The State Bank of India was thus born with a new sense of social purpose aided by the 480
offices comprising branches, sub offices and three Local Head Offices inherited from the
Imperial Bank. The concept of banking as mere repositories of the community's savings and
lenders to creditworthy parties was soon to give way to the concept of purposeful banking
subserving the growing and diversified financial needs of planned economic development. The
State Bank of India was destined to act as the pacesetter in this respect and lead the Indian
banking system into the exciting field of national development.
 BOARD OF DIRECTORS

List of Directors on the Central Board of

State Bank of India
(As on 10th August 2012)

Sr. No. Name Designation Under Section of SBI Act

1955

1 Shri Pratip Chaudhuri Chairman 19 (a)

2 Shri Hemant G. Contractor Managing Director 19 (b)

3 Shri Diwakar Gupta Managing Director 19 (b)

4 Shri A. Krishna Kumar Managing Director 19 (b)

5 Shri Dileep C. Choksi Director 19 (c)

6 Shri S. Venkatachalam Director 19 (c)

7 Shri D. Sundaram Director 19 (c)

8 Shri Parthasarathy Iyengar Director 19 (c)

9 Shri Jyoti Bhushan Workmen 19 (ca)

Mohapatra Employee Director

10 Dr. Rajiv Kumar Director 19 (d)

11 Shri Deepak Ishwarbhai Director 19 (d)

Amin

12 Shri D. K. Mittal Director 19 (e)

13 Dr. Subir V. Gokarn Director 19 (f)

CHAPTER III
Theoretical study of loan
Product of SBI
What Is A Loan?
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial
assets over time, between the lender and the borrower.
In a loan, the borrower initially receives or borrows an amount of money, called the principal,
from the lender, and is obligated to pay back or repay an equal amount of money to the lender at
a later time. Typically, the money is paid back in regular installments, or partial repayments; in
an annuity, each installment is the same amount.
The loan is generally provided at a cost, referred to as interest on the debt, which provides an
incentive for the lender to engage in the loan. In a legal loan, each of these obligations and
restrictions is enforced by contract, which can also place the borrower under additional
restrictions known as loan covenants. Although this article focuses on monetary loans, in
practice any material object might be lent.

Various types of loans provided by State Bank of India

State Bank of India has a variety of schemes under Personal Finance to satisfy varying needs of
the banking public. The Bank offers the following schemes with attractive rates of interest:
*Housing Loan * Property Loan * Car Loan * Educational Loan * Personal Loan * Loan to
Pensioners * Credit Khazana * Loan Against Shares/Debentures * Loan For ESOPS * Festival
Loans * Tribal-Plus Scheme * EMI Calculator * CENTRAL SCHEME FOR INTEREST
SUBSIDY ON EDUCATION LOANS
Many of our branches offer loans under Personal Finance. This section also offers an EMI
calculator to facilitate computation of monthly repayment.
SBI Home Loans
"THE MOST PREFERRED HOME LOAN PROVIDER" voted in AWAAZ Consumer
Awards along with the MOST PREFERRED BANK AWARD in a survey conducted by TV
18in association with AC Nielsen-ORG Marg in 21 cities across India.
SBI HOME LOANS now offers Interest Rates concessions on GREEN HOMES in accordance
with SBI's commitment to Environment protection.
SBI Home Loans come to you on the solid foundation of trust and transparency built in the
tradition of State Bank of India.
Best Practices followed in SBI mentioned below will tell you why it makes sense to do business
with State Bank of India.

SBI Home Loans Unique Advantage

 Package of exclusive benefits.
 Low interest rates. Further, we charge interest on a daily reducing balance!!
 Low processing charges.
 No hidden costs or administrative charges.
 No prepayment penalties. Reduce your interest burden and optimally utilize your surplus
funds by prepaying the loan.
 Over 13,700 branches nationwide, you can get your Home Loan account parked at a branch
nearest to your present or proposed residence. LOANS AGAINST PROPERTY A dream come
true! An ALL PURPOSE LOAN for anything that life throws up at you!! Do you need funds for
a Marriage ceremony, want to take your family to a well-deserved holiday or for a sudden
medical emergency? you have some property, but would rather not sell it? Then why not avail of
this ALL PURPOSE LOAN from SBI? SBI now makes it very much possible for you to only
keep your property but also have liquid funds.

Enjoy the SBI Advantage

· Complete transparency in operations
· Access this loan from our wide network of branches
· Interest rates are levied on a monthly/daily reducing balance method
· Lowest processing charges.
· Long repayment period of 60 months, up to 120 months for salaried individuals with check off
facility
· No Hidden costs or administrative charges.
· No prepayment penalties. You can have surplus funds at any time thereby conveniently
reducing your loan liability and interest burden.

Property Loan Scheme Avail of an All-Purpose loan against mortgage of any of your property.
We offer you these loans at all our Personal Banking Branches and those branches having
Personal Banking Divisions amongst others.

Purpose
This is an all purpose loan, i.e., the loan can be obtained for any purpose whatsoever. If the
amount of loan is Rs.25.00 lacs and above then the purpose of loan will have to be specified
along with and undertaking that loan will not be used for any speculative purpose whatsoever
including speculation on real estate and equity shares.

EDUCATION LOANS (SBI STUDENT LOAN SCHEME)

A term loan granted to Indian Nationals for pursuing higher education in India or abroad where
admission has been secured.

Eligible Courses
a. Studies in India:
· Graduation, Post-graduation including regular technical and professional Degree/Diploma
courses conducted by colleges/universities approved by UGC/ AICTE/IMC/Govt. etc
· Regular Degree/ Diploma Courses conducted by autonomous institutions like IIT, IIM etc
· Teacher training/ Nursing courses approved by Central government or the State Government
· Regular Degree/Diploma Courses like Aeronautical, pilot training, shipping etc. approved by
Director General of Civil Aviation/Shipping
· Vocational Training and Skill Development Study Courses will not be covered under the
regular Education Loan Schemes. A separate scheme for ‘Loans for Vocational Education and
Training’ has been launched which covers financing for such Vocational courses

b. Studies abroad:
Job oriented professional/ technical Graduation Degree courses/ Post Graduation Degree and
Diploma courses like MCA, MBA, MS, etc offered by reputed universities.
CHAPTER - IV
Detail Study of vehicle loan
What is a Vehicle Loan?
Anytime you borrow money you sign a promissory note, which is your written promise to repay
the loan. When you get a car loan, you are agreeing to use the car as the loan guarantee. In other
words, if you don’t make the car payments, the car goes back to the dealer/lender.
A car or mortgage loans are considered secured loans. Secured loans are protected by an asset or
collateral of some sort. Once you have applied for a loan and it has been approved, you will sign
loan documents that details all of the loan terms including interest, number of payments, and
total amount financed. Read everything carefully before signing the paperwork, once you have
signed the loan documents, very little can be changed and you are bound by a legal contract.

How do I Get a Vehicle Loan?

Obtaining financing can be confusing and intimidating. Lenders have tried to streamline this
process as much as possible; however, for some individuals this process might be confusing. As
you complete this course you will be able to understand the loan process, and increase your
confidence about securing a vehicle loan or any other kind of loan in the future. Below are some
of the steps involved:

Research: Shop around for the right lender and loan product. This will take some time and
effort, but finding a loan with the best rates for you can save money in the long run.

Pre-approval: Before you begin shopping for your dream car, you will want to know how much
you can afford to spend for a car. Meet with a lender at a bank, credit union or dealership of your
choice to apply for a car loan, taking all the necessary documentation.

Loan Application: After you have a sales contract, apply for the loan by completing a standard
loan application. The form includes questions about your income, assets, debts and credit as well
as the vehicle that you want to purchase.

Loan Processing: Once the loan application is completed and processed you will be notified
whether you have been approved or not.(Most car loans are processed online by a loan processor
using a computer and might be approved in less than an hour.) If you are approved, you will
review and sign your loan documents agreeing to pay the lender for the money borrowed. You
will give the lender rights to your car if you fail to repay the loan.

SBI NEW CAR LOAN SCHEME

SBI provides the best car loan scheme for you.
Salient features:
● No Advance EMI;
● Longest repayment tenure (7 years);
 ● Lowest interest rates ;
● Lowest EMI;
● LTV 85% of 'On Road Price' of car (includes registration, insurance and cost of
accessories worth Rs 25000), 90% in case of Corporate Salary Package accounts;
● Interest Calculated on Daily Reducing Balance;
● Flexibility of payment of EMI anytime during the month ;
● No prepayment penalty;
● Free Accident insurance ; Optional SBI Life cover;
● Overdraft facility available.

Purpose

For purchase of new passenger cars, Multi Utility Vehicles (MUVs) and SUVs.

Eligibility : To avail an SBI Car Loan, you should be:

Individuals between the age of 21-65 years of age.
Regular employee of State / Central Government, Public Sector Undertaking,
Private Company or a reputed establishment.
Professionals, self-employed, businessmen, proprietary/partnership firms who are
income tax assesses.
Person engaged in Agricultural and allied activities.
Net Annual Income Rs. 2, 50,000/- and above.

Loan Amount: There is no upper limit for the amount of a car loan. A maximum loan amount of
48 times of Net Monthly Income or 4 times of Net Annual Income can be sanctioned.

Documents Required: You would need to submit the following documents along with the
completed application form:
1. Statement of Bank account of the borrower for last 6 months.
2. 2 passport size photographs of borrower(s).
3. A copy of passport /voters ID card/PAN card.
4. Proof of residence.
5. Latest salary-slip showing all deductions
6. I.T. Returns/Form 16: 2 years for salaried employees and 2 years for
professional/self-employed/businessmen duly accepted by the ITO wherever applicable
7. Proof of official address for non-salaried individuals

Margin: 15% of the on road price (which includes vehicle registration charges, insurance,
one-time road tax and accessories).

Repayment: You can enjoy the longest repayment period in the industry with us as long as 84
months.
Reimbursement of costs of car purchased by own sources: We also reimburse finance for the
cars purchased out of own funds which are not more than 3 month old at rate of interest
applicable to New Car.

Interest: Click here to view the interest rates

Processing Fee: 0.51% of loan amount, minimum Rs 1020/- and Maximum Rs 10200/-.

Security: As per Bank's extant instructions.

 CERTIFIED PRE-OWNED CAR LOAN

SBI provides the best car loan scheme for you to take a loan for purchase of a Certified
Preowned Car, not more than 5years old.

SBI offers you:

• No Advance EMI;
• Longest repayment tenure (7 years);
• Lower interest rates
• Lowest EMI;
• LTV 85%of ‘On Road Price’ of car (includes registration, insurance and cost of accessories),
• Interest Calculated on Daily Reducing Balance;
• Flexibility of payment of EMI anytime during the month;
• Low prepayment penalty, only 2%;
• Low processing fee (only 0.51% of loan amount);
• Free Accidental insurance ; Optional SBI Life cover;
The Scheme

Purpose: Term Loans for purchase of Certified Pre Owned car, from certified used car dealers,
not more than five years old. The loan should be repaid within 7 years from the date of the
original purchase of the vehicle.

Eligibility: To avail an SBI Car Loan, you should be:

 Individuals between the ages of 21-65 years of age.
 A Permanent employee of State / Central Government, Public Sector Undertaking, Private
company or a reputed establishment or
 A Professionals or self-employed individual who is an income tax assessee or
 A Person engaged in agriculture and allied activities.
 Net Annual Income Rs. 100,000/- and above.

Loan Amount: Maximum Loan amount will be 2.5 times of net annual income. Spouse’s
income could also be considered provided the spouse becomes a co-borrower in the loan.
Documents Required: You would need to submit the following documents along with the
completed application form:
1. Statement of Bank account of the borrower for last 6 months.
2. 2 passport size photographs of borrower(s).
3. Signature identification from bankers of borrower(s).
4. A copy of passport /voters ID card/PAN card.
5. Proof of residence.
6. Latest salary-slip showing all deductions
7. I.T. Returns/Form 16: 2 years for salaried employees and 3 years for professional/self
employed/businessmen duly accepted by the ITO wherever applicable to be submitted.
8. Proof of official address for non-salaried individuals.

Margin: 15% of the on the road price (which includes vehicle registration charges, insurance,
one time road tax and accessories).

Repayment: You can enjoy the longest repayment period in the industry with us as long as 84
months.

Interest: Click here to view the interest rates.

Processing Fee: 0.51% of Loan amount

Security: as per Bank's extant instructions.

 CAR LOAN SCHEME FOR USED CAR

SBI provides the best car loan scheme for you to take a loan for purchase of used car, not more
than 5 years old.

SBI offers you:

• No Advance EMI;
• Longest repayment tenure (7 years);
• Lower interest rates
• Lower EMI;
• LTV 85%of ‘On Road Price’ of car (includes registration, insurance and cost of accessories
worth Rs 25000),
• Interest Calculated on Daily Reducing Balance;
• Flexibility of payment of EMI anytime during the month;
• Low prepayment penalty, only 2%;
• Low processing fee (only 0.51% of loan amount);
• Free Accidental insurance ;
• Optional SBI Life cover.
The Scheme
Purpose: You can take finance for purchase of passenger cars, Multi Utility Vehicles (MUVs)
and SUVs not more than five years old.

Eligibility: To avail an SBI Car Loan, you should be:

 Individuals between the ages of 21-65 years of age.
 A Permanent employee of State / Central Government, Public Sector Undertaking, Private
company or a reputed establishment or
 A Professionals or self-employed individual who is an income tax assessee or
 A Person engaged in agriculture and allied activities.
 Net Annual Income Rs. 100,000/- and above.

Loan Amount: Maximum Loan amount will be 2.5 times of net annual income. Spouse’s
income could also be considered provided the spouse becomes a co-borrower in the loan.

Documents Required: You would need to submit the following documents along with the
completed application form:
1. Statement of Bank account of the borrower for last 12 months.
2. 2 passport size photographs of borrower(s).
3. Signature identification from bankers of borrower(s).
4. A copy of passport /voters ID card/PAN card.
5. Proof of residence.
6. Latest salary-slip showing all deductions
7. I.T. Returns/Form 16: 2 years for salaried employees and 3 years for
professional/selfemployed/businessman duly accepted by the ITO wherever applicable to be
submitted.
8. Proof of official address for non-salaried individuals. 15% of the on the road price (which
includes vehicle registration charges, insurance, one time road tax and accessories).

Repayment: You can enjoy the longest repayment period in the industry with us as long as 84
months.

Interest: Click here to view the interest rates.

Processing Fee: 0.51% of Loan amount

Security: As per Bank's extant instructions.

 2-WHEELER LOAN
SBI provides the best Two- Wheeler loan scheme for you to take a loan for purchase of a new
Two- Wheeler.

SBI offers you:

• No Advance EMI;
• Lower interest rates Lowest EMI;
• LTV 85%of ‘On Road Price’ of vehicle;
• Interest Calculated on Daily Reducing Balance;
• Flexibility of payment of EMI anytime during the month;
• Low processing fee (only 1.22% of loan amount);
• Free Accidental insurance ;
• Optional SBI Life cover.

Purpose: To provide finance for purchase of new Two-wheelers viz. scooter/motorcycle/

moped/battery-operated vehicles.

Eligibility: To avail an SBI Car Loan, you should be :

 Individuals between the ages of 21-65 years of age.  A Permanent employee of State /
Central Government, Public Sector Undertaking, Private company or a reputed establishment or
 A Professionals or self-employed individual who is an income tax assessee or
 A Person engaged in agriculture and allied activities.  Minimum Net Annual Income Rs.
75,000 (for regular petrol/diesel/gas operated scooters & motorcycles) and Rs. 60,000 (mopeds
and battery-operated Two wheelers)

Loan Amount:
• For salaried persons, the maximum loan amount is restricted to 6 time’s Net Monthly Income
(NMI), i.e. net of all deductions including actual monthly tax deductions at source.
• In case of others, the maximum loan amount is restricted to half of Net Annual Income (NAI),
i.e. income as per latest income tax return filed less taxes payable.
• For agriculturists, the net annual income should be arrived based on the nature of their activity
(i.e. farming, dairy poultry, orchards, etc) land holding, cropping pattern, yield, etc., and average
level of income derived therefrom in the area.

Documents Required: The following papers are to be submitted along with loan application:
1. Statement of Bank account of the borrower for last 12 months.
2. 2 passport size photographs of borrower(s).
3. Signature identification from bankers of borrower(s).
4. A copy of passport /voters ID card/PAN card.
5. Proof of residence.
6. Latest salary-slip showing all deductions and TDS certificate-Form 16 in case of salaried
persons
7. Copy of Income Tax Return for last two financial years, duly acknowledged by ITO for
professionals, self-employed and others. 8. Proof of official address for non-salaried individuals.

Margin: 15% of the on the road price (which includes vehicle registration charges, insurance,
one time road tax). You can repay the loan within 36 months.

Interest: Click here to view the interest rates.

Processing Fee: 1.22% of Loan amount

Security: As per Bank's extant instructions.

 SBI-TML CAR LOAN SCHEME FOR POST OFFICE

EMPLOYEES

The scheme is available till 25.08.2012

Between the Age: 21 – 65 years (for sanction

Age of loan),loan can be granted for persons
beyond 65 years who have sufficient, regular
and continuous source of income for servicing
the loan. Loan must be fully repaid before the
borrower attains the age of 70 years.

Who are Eligible Employees of Post Office in Uttar Pradesh

State

Purpose For purchase of Tata Cars

Maximum Loan Amount The maximum loan amount is 48 times of the

net monthly income.

Security Hypothecation of vehicle and noting of

hypothecation charge in the books of R.T.O.

Processing Fee Rs. 510/-

Rates of Interest 0.75%above base rate, i.e. 10.75% p.a., for all
tenure (Base Rate: 10% currently)

Margin 10% of on-road price of car, i.e. 90% finance

of ‘On Road’ price of the car

Repayment Period Maximum 84 months

Penal Interest For Loans above Rs.25000/- , if the

irregularity exceeds EMI or Installment
amount, for a period of one month , then
penal interest would be charged @2%
p.a.(over and above the applicable interest
rate) on the overdue amount for the period
of default. If part installment or part EMI
remain overdue, then penal interest should not
 be levied

Documents required  Statement of Bank account of the borrower

for last 6 months.
 2 passport size photographs of
borrower(s).
 A copy of passport /voters ID card/PAN
card/ Driving License.
 Proof of residence- Tax receipts,
Telephone bill, Electric bill etc..
 Latest salary-slip showing all deductions
 I.T. Returns/Form 16: for last 2 years

Prepayment Penalty No Prepayment Penalty will be charged

Mode of disbursement Amount should be remitted directly to the

supplier/dealer.

Insurance The vehicle purchased is to be kept

comprehensively insured in the name of the
borrower for the market value or at least 10%
above the loan amount outstanding,
whichever is higher, and the Bank’s interest as
a hypothecatee should be noted in the
certificate of insurance and insurance policy.
A copy of this is to be retained with the loan
documents.

 CAR LOANS Interest Rates w.e.f. 20.09.2012 (Base Rate 9.75 % p.a.)
SBI CAR LOAN SCHEME
Tenure Rate of Interest
For all tenures
For Term Loan and Overdraft: 0.75% above Base Rate, i.e. 10.50% p.a.

NRI Car Loan

Tenure Rate of Interest: For all tenures: 0.75% above Base Rate, i.e. 10.50% p.a

Two - Wheeler Loan

Tenure Rate of Interest
Up to 3 years 8.25% above Base Rate i.e. 18.00% p.a.

Used Vehicles
Tenure Rate of Interest
Up to 3 years 7.25% above Base Rate i.e. 17.00% p.a.
Above 3 yrs 7.50% above Base Rate i.e. 17.25% p.a.

Certified Pre-owned Car Loan scheme

Tenure Rate of Interest
Up to 3 years 6.00% above Base Rate i.e. 15.75% p.a.
Above 3 yrs 6.50% above Base Rate i.e. 16.25% p.a.
NOTE: ALL INTEREST RATES ARE SUBJECT TO CHANGE, WITHOUT NOTICE

SBI Car Loan

Owning a car is everyone's dream. Whether it's your first car for self, or the second one for your
family, Be it a compact car you want to buy or a luxury one or even if its a SUV. We all feel the
need for car finance, at some or the other time. This holds good for the business segment too. But
finding the best car loans is the toughest task. We at MoneyDuniya, assist you in evaluating the
best car loan interest rates, in the shortest possible time, through our Car Loan Calculator and
Comparator. Or if you are short of time, just select the car model and fill up our 2-minute online
application form and let us worry about the rest. We assure you the best car loan deal, with the
lowest EMI and processing fees, through our tie-ups with the most reputed banks and the car
loan providers, dealing in customized car loans. So, what are you waiting for!! GET SET GO!!
Process: All that you wanted to know about car loans but could not find out. The first step would
obviously be deciding which car & model to buy. This would depend on your personal choice,
need and most importantly your budget. You could also decide on a quality checked 2nd sale car.
Once you have decided, rest back and let the experienced team at Eazeeloans.com take over the
entire burden of applying, booking and getting the loan sanctioned registration ,insurance etc.
 The loan Process:
1. Enquiry with Eazeeloans.com
2. Submission of documents and booking amount.
3. Verification agency representative visit.
4. Loan approval.
5. Car registration, Insurance cover and delivery.
 How is Eligibility Calculated: Various factors are taken into account when assessing the
repayment capacity. Income, age, stability/ continuity of employment / business and subject to
maximum provided by the bank, to name some factors.
 How can eligibility be increased: Your spouse can be a co-applicant if he/she is earning. The
incomes can be clubbed to enhance your loan amount. You can also include Parents/Children as
Co-Applicants for higher eligibility.
 Who can apply for an Auto/Car Loan: Salaried Individuals Self employed
Professionals/Businessmen Companies/Firms
 Requirements: Min Age should be 21 years when the loan is sanctioned. The loan tenor is
from 5 years - 25 years subject to a maximum till 58/60 years or retirement, whichever is earlier
in case of salaried and for self-employed before 65 years. A CO-Applicant can be taken for
overcoming the age barrier as well. Companies/Firms to be in existence for at last 3 years. Proof
of income/existence needed.
 What are the Features of Auto/Car loan: * Attractive interest rates. * Covers all models. *
Flexible repayment. * speedy processing. * Easy Documentation * 80/85% of the cost of the
vehicle available as loan.
 Various rates offered in Mumbai: 1. Floating Rate 2. Fixed Rate * Floating Rate Home
Loan Loan under Floating/Adjustable Rate is linked to Retail Prime Lending Rate rates of banks.
The Rate of interest will be revised every time there is a change in Retail prime lending rate
Generally the EMI is retained and the tenor of the loan is increased /decreased as applicable.
*Fixed Rate Currently some banks are offering fixed rates only for 3-5 years. Repayment
Repayment is normally done through Equated Monthly Installments’ (EMIs) comprising both
principal and interest. Either through post dated cheques (PDC) or ECS (Electronic clearing
system).
 Documents Required: The following documents needs to be submitted: * Application form
with photograph. * Identity and Residence Proof. * Latest 3 months Salary-slips-for salaried. * 2
years I T Returns-for self employed. * Proof of business existence- min 3 years.. * Last 6 months
bank statements.
 CHAPTER - V
Questionnaire
 How do I get an Auto Loan?
1. Apply on Eazeeloans.com. Get rates quoted by various banks under one roof. What is the age
limit? Minimum Age is 21 years and maximum 65 years.
 How much loan can I get?
1. The amount of the loan depends upon: The cost of the vehicle. 2. The type
(standard/premium). 3. The percentage financing offered. 4. If you are buying a new car, you can
get up to 80% to 90% financing. The percentage of finance the banks give on cars is also
determined on the basis of second-hand market value of that particular car in the case of second
hand car.
 What documents do I need to give?
1. Photograph 2. ID Proof(Pan card, Driving License, Passport,) 3. Proof of signature 4. Proof of
Age. 5. Residence and office address proof. 6. Income proof(salary Slips or IT Returns) 7. Bank
Statements.
 What is the rate of interest?
Rate of interest would vary from 12% to 18% for a new car and 16% to 18% for a second hand
car. How long does it take to get a loan sanctioned? It would take between 3/4 days after
submission of all documents for a loan to be sanctioned.
 Can I get a loan to purchase a second hand car?
Yes Finance is available on a second hand car which is less than 7 years old. The loan amount
would depend on the valuation of the car done by the financer.
 Is collateral required to get a loan?
No, there is no need for collateral, the car is hypothecated in the bank's name and an
endorsement is made in the Registration certificate (RC) book of the vehicle.
 How do I create a better profile to avail a loan?
If the credit profile does not match the bank's requirement it can be reinforced by bringing in a
co-applicant who would be able to match the requirement. Are auto loans available without
income proof? Yes you can, under the No Income Proof scheme offered by some banks. Can the
loan amount be enhanced? The Loan amount can be increased by clubbing Co-applicant's
income.
 Is a guarantor required?
Generally no, but a guarantor like father, mother, son, daughter, husband, brother, sister, son's
Wife etc is required in case income profile is not met.
 How is the interest calculated?
The interest is usually calculated on a flat rate or on a reducing balance which can be either daily,
monthly, quarterly or annually.
 What is the loan tenure?
Usually auto loan tenure is available from 1 to 7 years. The tenure would depend on various
factors like the financer car segment, income, customer profile etc Is Part payment and
 Prepayment option available? :Yes prepayment is possible by paying prepayment fees on
the outstanding principal. There is no part payment facility available.

Chapter - VI
Conclusion

The loan system in India has been on the verge of rising due to the change in the mindset
of Indian people, who once were afraid of taking loans as they feared what will the banks
do if the money isn’t returned back. Nowadays the people in India want to increase their
own standard of living even though their financial conditions are weak. For the purpose
of satisfying their dreams they contact the bank for the loan.
After doing this project I got to know what are the documents needed for an application
of
the loan, which is a very important gain which I got from this project. Before I started the
project I had very little information on documents required.
This project has given me a lot of information related to the loan by talking to various
branch managers and the staff. This has given me confidence that the future of banks in
India will be very bright as in a population of more than 1 billion everyone needs money.
Chapter VII

BIBLIOGRAPHY
www.sbi.co.in
www.apnapaisa.com
www.wikipedia.org