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Car Loan

State Bank of Travancore was established in 1945 and through the SBI Subsidiary Banks Act of 1959, it became an associate of the State Bank of India. With its head office in Thiruvananthapuram, Kerala, the State Bank of Travancore is one of the most popular public sector banks in the country. For an individual who wishes to buy any car, the bank offers a variety of car loans that are attractive and convenient. There are many advantages of car loans offered by the bank like high loan terms, quick processing time, lower margins and low interest rates besides many others.

Eligibility Criteria for State Bank of Travancore Car Loan

The following are the criteria to get a car loan from the State Bank of Travancore:
 

  • Individuals who have been in their jobs for a minimum of two years and get a regular salary
  • Any other individual with a regular income
  • Any employee of a private sector company, state or central government, corporations, public sector companies, insurance companies and banks
  • An individual getting a regular pension
  • An individual with minimum two years’ experience in the defense services
  • Anyone who has filed income tax returns for minimum two years.

Factors Determining Eligibility of State Bank of Travancore Car Loan

 Car loans from State Bank of Travancore come with many benefits but one has to be eligible to get it. There are some factors which have an effect on the eligibility criteria of the bank. Some of these are:
 

  • Before processing your car loan application, the bank does an evaluation of the credit score. By doing this, the bank is able to do an analysis of the creditworthiness of the loan applicant. Your financial history is reflected by your credit score. Factors like closed and current accounts, payment history, duration of credit, etc. affect the credit history. A high credit score is essential and ensures quick approval of the car loan.
  • One of the other main factors that have an impact on your creditworthiness and eligibility for the car loan is your income. The bank calculates the debt income ratio which is ratio that reflects the debts the person has with respect to his income in a year. With this ratio, the bank can come to know about the ability of the applicant to repay the loan and also his net worth.
  • The amount that is paid as down payment also has an impact on the eligibility of the car loan. Higher the amount paid as down payment, lesser is the burden that will be there of the loan. This also reduces the risk and shows reliability on the part of the applicant. With less loan amount and higher margin, there are higher chances of being eligible for the State Bank of Travancore car loan.
  • The eligibility for the loan is higher for a younger applicant than an older one. The bank thinks that older car loan applicants have more risks involved in outflows and income. Their chances of getting the loan increases if they have high net worth and they take less loan amount or have shorter loan tenure.
  • When an applicant takes the loan for shorter time duration, it implies that he/she will repay the loan quickly. As this case involves low risk, the bank approves the application quickly.

Steps to Increase Eligibility for the Car Loan

Getting a car loan from the State Bank of Travancore comes with many benefits and thus, the following steps can be taken to increase the eligibility for the loan.
 

  • To be eligible for a car loan from the bank, ensure that you pay all your bills and do not default for any credit. Your credit score gets affected by late payments and default in payment and thus, taking care of it is good.
  • If you have a guarantor who can guarantee your loan, the bank is more confident and will sanction the loan easily.
  • As far as loans are concerned, getting secured loans is better than unsecured loans. Loans like personal loans and credit cards are not considered favorable by the bank as they are unproductive payouts. Having a balance of the two is good if you want a car loan.
  • Apart from the hypothecation of the car, giving a guarantee to the bank is very helpful and will help you in getting the loan easily.
  • If you have been a guarantor for anyone’s loan or if you have joint accounts, you should keep a close watch in the activities of these accounts as this will also have an impact on your credit score and creditworthiness.

Features of the State Bank of Travancore Car Loan

The car loan offered by the bank is feature-rich and has many benefits for the salaried class or professionals. There are many aspects of a loan which need to be taken into account when taking a car loan and it is important to look at each one of them before applying for a loan. There are some essential features of the loan which are discussed as follows and which will help you take a decision about taking a car loan from the State Bank of Travancore.

Minimum Income Requirement

In order to get a State Bank of Travancore car loan, a salaried person should have a net annual income of over Rs 3,00,000. Income earned from dividends or bank interests can be added to this to know the annual income. The net annual income is the figure achieved after deducting all deductions from the gross salary like income tax, provident fund, etc.

For businessmen, partnership and proprietary firms, professionals and self-employed, the net profit or the taxable income per annum should be Rs 4,00,000. The profit amount has to be reflected in the income tax returns.

Loan Amount

48 times of the net monthly income of a salaried individual is given as the loan for a car by the State Bank of Travancore. For the businessmen, partnership and proprietary firms, professionals and self-employed, the loan amount given is up to 4 times the net profit as filed in the income tax returns or Gross Taxable income per annum as per ITR after adding back depreciation and deducting repayment of all existing loans.

EMI to NMI Ratio

EMI/NMI ratio is the ratio between the monthly installments and the net monthly income. For loans of up to Rs 10,00,000 of normal car loan, the ratio should not be more than 50%. For a loan above this amount for premium cars, the ratio should not be more than 55%.

Margin

The margin for a normal car loan of up to Rs 10,00,000 is 15% of the total cost of the vehicle and for loans for premium cars of an amount above this is 20%. The cost of the vehicle is calculated as follows:
 

  • The cost implies the cost+ insurance+ accessories+ life tax
  • The cost of the accessories cannot be more than Rs 50,000 or 5% of the total value of the car, whichever is less.
  • Any discount or offer given by the dealer has to be deducted from the on road price of the car

Repayment

The loan has to be repaid within 7 years for any applicant. The repayment period cannot exceed beyond 70 years of the age of the applicant.

Documents Needed for Applying for Car Loan

The following is the list of documents needed for applying for a car loan.

For salaried individuals, the list is:
 

  • Last 6 months statement of bank accounts
  • Identity proof like PAN card, passport copy, driving license, Voter ID card, etc.
  • Form 16 and latest salary slip
  • Passport size photographs
  • Address proof like Aadhaar card, Telephone or Electricity bill, passport copy, Voter ID card, driving license, ration card, etc.
  • Form 16 or IT returns of the last two years

For businessmen, partnership and proprietary firms, professionals and self-employed:
 

  • Last six month bank statements
  • Identity proof
  • Income tax returns of last 2 years
  • Passport size  photographs of the borrower
  • Address proof
  • Profit and Loss statement, balance sheets, etc.

Getting a loan from State Bank of Travancore is simple with basic documentation. The maximum processing time taken by the bank is two working days after the application has been received. The bank processes the documents and disburses the loan within two days. The loan can be availed at the place of work or permanent residence. An officer will do a verification and inspection at the place where the car is maintained.

State Bank of Travancore is a preferable choice for all those who want to buy a car. The bank process is simple to follow. There are many advantages of taking the car on loan and this definitely makes it easier for an individual to buy his dream car and also not compromise on other needs. The banks have EMI calculators and before buying the car one can see what amount of loan can be easily paid by them on a monthly basis. The bank has various tools available for assistance using which anyone can decide on various factors like down payment and loan tenure. Buying a car was never so easy and the State Bank of Travancore makes the process and application simpler too.