sundram car finance

8/7/2019 sundram car finance

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Company Profile


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The Company was incorporated in 1954, with the object of financing the

purchase of commercial vehicles and passenger cars. The company was started with a

paid-up capital of Rs.2.00 Lakhs and later went public in 1972. The Company's shares

were listed in the Madras Stock Exchange in 1972 and in the National Stock Exchange in

January 1998.

Subsequently, the equity shares of the Company have been delisted from Madras

Stock Exchange Limited (MSE) with effect from January 27, 2004, in accordance with

SEBI (Delisting of Securities) Guidelines, 2003, for voluntary delisting.

For him it was a lifetime involvement in automobiles, finance and philanthropy

Born on November 8, 1912, Mr.Santhanam had his education in Madurai. In

1930, he joined his father in business, and thus began a life -time involvement in

automobile and finance.

He moved to Chennai in 1936, and served parent company T.V. Sundaram

Iyengar & Sons, in various capacities, gaining rich experience in road transport,

marketing of automobiles, manufacture of automobile components, general insurance,

banking and finance. In 1954, he founded Sundaram Finance, which together with its

subsidiaries, now has an asset base of about Rs.6000 crore.

He played a crucial role in the establishment of several auto component units in

the TVS Group, prominent among which were Wheels India, Brakes India, Sundaram

Clayton and Lucas-TVS. He also promoted Madras Motor General Insurance Company,

which later merged into the United India Insurance Company. He was Managing

Director of the T.V.Sundaram Iyengar & Sons for nearly a decade before becoming its

vice-chairman, position he held till his death.

He was not only deeply involved in negotiations with foreign collaborators for

the manufacture of quality auto components, but also in financial planning and project

financing. His financial acumen was always regarded highly, not just in the TVS group,


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but outside as well. He served on the Government's Direct Taxes Advisory Committee,

and the study Group on Road Transport Financing among others.

For Mr.Santhanam, quality was paramount. He ensured that his auto component

distribution companies provided transport operators genuine and quality products at

fair prices.

He was also the founder chairman of trade associations such as the Federation of

Automobile Dealers' Association and the South India Hire Purchase Association.

He was an ardent supporter of sports, especially football, cricket and tennis. In

the late 1940s he promoted TVS Greens, which had several leading national football

players. A keen tennis player himself, he sponsored several leading players during the

early stages of their career. He was often spotted at Wimbledon during the tennis

fortnight cheering on India's maestro, Ramanathan Krishnan.He championed educational, religious and charitable causes and was

instrumental in donating large sums of money from the companies with which he was

associated. T S Surendran, Vice-Chairman of Sankara Nethralaya, said Mr.Santhanam

had contributed liberally to "the cause of our foundation." He was associated with the

foundation for over 25 years. The Sundaram Medical Foundation and the hospital

managed by it stand testimony of his keen interest in charitable causes.

"Work was worship for him," according to officials in the TVS Group. "His

number sense was incredible," said a ranking official of Sundaram Finance, who had

worked with him closely. He knew his principal employees by name and qualification.

He kept himself updated on the happenings in the group companies and attended

meetings of the Sundaram Finance Board.

Mr.Santhanam, according to T T Srinivasaraghavan, Managing Director of

Sundaram Finance, was a "visionary."

Even in early 1950s, he had understood the need for a good road infrastructure.

"He tirelessly worked for the uplift of transport operators," Mr.Srinivasaraghavan said,

and pointed to the travels Mr.Santhanam had undertaken across the country often

sipping tea with the drivers.

Mr.Santhanam brought to bear such involvement in the non-banking finance

business, encouraging small players to become corporate entities. "He never saw

anyone as a competitor," he said.


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IN RECOGNITION OF SERVICE TO INVESTORS

A Certificate of honour was given by the Institute of Chartered Financial Analyst,

in recognition of the Company's efforts to set a trail blazing record of investor rewards ,

fostering the equity cult on ethical lines among the top hundred investor rewarding

companies in India for the period 1990-95.

Birth of Sundaram Finance

First finance company to be listed on the Madras Stock Exchange.

Started Leasing operations.

Formation of Lakshmi General Finance

Receivables crossed Rs. 1000 crore (Rs. 10 billion)

Deposits crossed Rs. 500 crore (Rs. 5 billion)

Formed Sundaram Newton Asset Management Company Ltd. in collaboration

with Newton Management Ltd., UK.

Received Best Tax Payer Award

Received Best Tax Payer Award

Receivables crossed Rs. 2000 crore (RS. 20 billion)

Promoted Fiat Sundaram Auto Finance Limited, a joint venture with Fidis

S.p.A., Italy

Promoted Sundaram Home Finance Limited with equity participation from

International Finance Corporation (IFC), Washington, and FMO Netherlands

Promoted Royal Sundaram Alliance Insurance Company Limited, a joint

venture with Royal & Sun Alliance Plc, for Non -Life Insurance

Promoted Sundaram Infotech Solutions - Infotech division of Sundaram

Finance

Promoted Sundaram Business Services - BPO arm of Sundaram Finance

Merger with LGF making SF Billion dollar Balance sheet NBFC

BNP Paribas Asset Management Group, France acquires 49.90 % stake in

Sundaram Asset Management Company Ltd from SFL.

Union de Credit pour le Batiment SA (UCB), a wholly owned subsidiary of

BNP Paribas SA, France acquires 49.90% stake in Sundaram Home Finance

Ltd from SFL.


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AWARDS

y Certificate of Commendation award by the Government of India under thescheme of Good Tax Payers.

y Second Best Tax Payer in the category of Private Sector Company forAssessment Year 1994-95 in Tamil Nadu Region, from the Income Tax

Department, Tamil Nadu.

y Rolling Trophy by Rotary Club of Madras South West for Best Employer-Employee Relationship for the year 1995-96.

y BestTax Payer in the category of Private Sector Company for Assessment Year1995-96 in Tamil Nadu Region, from the Income Tax Department, Tamil Nadu.

y Automan Award to Shri T S Santhanam, Chairman, from Motor India in 1998.y Pioneering Service Award to Shri T S Santhanam Chairman, from Chennai Good

Transport Association.

y Sarige Ratna Award to Shri T S Santhanam, Chairman, from the Bangalore CityLorry Transporting Agents Association (Regd).

y Most Valued Customer Award to Shri T S Santhanam Chairman, from theState Bank of India.

y The Best Financier of the New Millennium 2000 to Shri. G K Raman,Managing Director, from the All India Motor Transport Congress.


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COMMERCIAL VEHICLES LOANS

Sundaram Finance is one of the oldest and largest

providers of finance for the acquisition of commercial vehicles of

all makes. The Commercial vehicle finance provided by us helps

the small operators to acquire vehicles with minimum hassle and

documentation. We provide customised financing options to suit

your needs. The strength of our Group lies in the quick completion of transactions, long

association with transporters for generations and the intimate knowledge of the market

and its nuances.

Large fleet operators also find it easy to expand their fleet

through the finance provided by us. Our Group has a vast network

of over 500 branches to cater to the financing needs of our

customers. We also offer special schemes, supported by the manufacturers, where the

rates are highly competitive. Our finance schemes are easy to understand and without

any hidden costs. You will deal only with our employees who are of high integrity and

extremely customer friendly. You are assured of a pleasant, transparent and gimmick-

free deal from us.

We provide finance for acquiring equipment either under hire purchase or lease

finance routes. The mode of finance to be employed for funding the requirement is left

to you. Some of the distinguishing features between lease and hire purchase are given

below:

We are offering the lease finance option only to corporates. Some of the salient

features of this mode of finance are given below:

y Equipment finance, lease and hire purchase, is generally provided only forgeneral purpose machinery.

y In the case of imported equipment we provide the finance but this is approvedon a case to case basis.


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COMMERCIAL VEHICLES

After you select the vehicle you can contact any of our branches where we

provide total assistance to you to purchase the vehicle. You also have the flexibility to

select the finance scheme that is on offer. Once approved, you can make the initial

payment and on completion of the necessary documentation the delivery order for the

vehicle is made and the vehicle is delivered to you. All the documentation required

would be discussed with you up-front. This is just an example of the transparency in our

transaction. The maximum finance that we provide is 75% of the on road cost of the

vehicle (excluding accessories and insurance). The scheme generally varies based on the

needs of the customers. The maximum tenure will be 48 months. For all other queries

please contact us at any of the branches or mail us.

Commercial Vehicles

We provide finance for buying a second hand vehicle. We also extend financial

assistance against an existing, unencumbered free vehicle. This is generally done to pay

the margin when you buy new vehicles and avail finance from us. This is however,

subject to satisfactory completion of appraisal formalities. This finance is alsoselectively extended for working capital requirements. The condition and market value

of the vehicle are the key factors in determining the credit approval and the quantum of

finance. We give finance against vehicles that are upto 5 years old and the maximum

tenure is 36 months. The finance quantum is normally upto 60% of t he value as

assessed by us. For all other queries please contact us at any of the branches or mail us.

How to obtain finance from us?

y You select the vehicle and estimate the finance amount based on the repaymentperiod as also your capacity.

y You also have the flexibility to select the finance scheme that is on offer and onceapproved, you can make the initial payment ( generally the margin money).

y Once the payments are made, delivery order for the vehicle is made out and thevehicle of your choice is delivered to you


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y Where body construction is involved, a moratorium for the payment of the 1stinstalment is allowed to facilitate your completion of the bodywork..

y All the documentation required would be discussed with you up -front and this isjust an example of the transparency in our transaction.

y At the end of the contract period, once all the instalments are paid, you becomethe owner of the vehicle.


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Executive Summary


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EXECUTIVE SUMMARY

WHATIS LOAN?

In this environment where there is much inflation hovering on the heads of

people. In the society the people belongs to the following class status and these are as

follows:

y Upper Classy Lower Classy Middle Class

The distribution of wealth is totally not equal. The rich becomes richer and the

poor becomes poorer. The salary of the individual is not enough for surviving; one has

to do a part time job or even should go for loan for meeting the demands of the families.

The life of the poor people is becoming very miserable and the rich people are living

their lives in a very luxurious manner. The poor and even the middle class family is

fighting for the basic needs of the day to day life, because the prices of the products are

so expensive that every one is not able to buy the products in an easy way. Mostly

people used to borrow money from one another to meet their requirements of day to

day, and after sometime return the money back to the lender. So if we see our

environment then we can easily say that every one is borrowing money. Bank plays a

very important role in providing the loan of different types. The banks play very

important role in providing the money to the people so that they can fulfill their day to

day routine. One should know very clearly that which cheap loans are good for the

person. The individual should know and shou ld very much aware about the updates of

cheap loans.

Advance loans are also known as pay day loans, these loans are for the purpose

to hide the expenses related with the borrower till the pay day, this is also known as

cash advances..

If you want to purchase a particular car, house etc. then instant loans is very

suitable and appropriate. The information about the low loans is available on th e

internet and the people should mark the one which is appropriate for meeting the

requirements. If you need to get out of the situation where you have to pay the money in


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cash then the quick loans are the best ways. Loans are now a days very essential for the

survival, as we can see that every body is taking loan for the following purposes and

these are as follows:

y To Buy A Housey To Buy Different Products Like Home Appliancesy To Buy Propertyy To Buy The Transport Etc

Now the people start getting loan and then pay back the loan in installments and

interest loans are very feasible for the business class especially. Best loan is the one on

which the interest rate is not very much and it is in relation with the buying power of

the customer. One should know that what are the countrywide loans? Are very suitable

for the person who wants to get a loan to buy or purchase the home. One should get payloans from the one who is really expert in the filed. There is a very popular site related

with the commercial loan, if you want to have the information about the commercial

loan you can get it from the particular internet site, so the internet is also providing the

information about the loans means not only the books and the magazines are providing.

There is great importance of Loans in not only for the individuals but also a great

importance for the companies and small size and large size companies. If we see some

companies then we can see that there is a concept of loans in every department or even

in every enterprise.

Loan is a type of transaction in which the borrower gets a certain amount of

money from the lender, and the lender gives the money because they both agreed on the

thing that the borrower will give the money back to the lender in a certain amount of

time period. If the borrowers don't give the money back then it is to be considered as

unethical. As we know that education is very important for every one, every one wants

to study. The education is not only important for the rich people but also for the poor

and middle class people, that's whey the student loan is also there for the anxious

students so that they can read and study well, what they want to in a real sense. The

best way to utilize the loan is also to pay the loan back in the right time because

otherwise the individual has to pay back the money with the more interest rate as it was

defined earlier.


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There are many type of loans which the bank is offering to the individuals and to

the small entrepreneurs and as well as to the large owners of the companies. There are

many types of loans available for the people; some of them are as follows:

y Long-Term Loansy Short-Term Loansy UnSecured Credit Linesy UnSecured Loansy Secured Loans Etc.

These loans provide the benefits to the people in many ways; the loans provide

the opportunity for the business people to do something good in the corporate sector.

Though the loans many companies are making and providing good services to the

people but also pay back the money. The loan can only be a good way for seekingopportunities and fulfilling the desires but it will become a frustration if the borrower

will not pay the money in time.

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 backor repayan 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.

Acting as a provider of loans is one of the principal tasks for financial

institutions. For other institutions, issuing of debt contracts such as bonds is a typical

source of funding.


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Research Methodology


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RESEARCH METHODOLOGY

Research Methodology is a way to systematically solve the research problem. It

may be understood as Science of studying how research is done, Scientifically in it we

study the various steps that generally adopted by a reseacher in studying his reseach

problem along with the logic behind them. Accuracy of the study depends on the

systematic application of the method. The researcher has to decide the method to be

used that helps him to get a desired direction in a systematic way.

Definitions

According to Clifford Woody

Research comprises defining and redefining problems, formulating or hypothesis

or suggested solutions collecting: organizing and evaluating data making deductions and

reaching conclusions to determine whether they fit the formulating hypothesis.

Thus, Research Methodology is a strategy that guides a researcher in providing

answers to research questions and for this research survey is being done.

Research in common parlance refers to a search for knowledge. In fact research is

an act of scientific investigation.


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S

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Th s majorst s

OBJ

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-

Stu of CarLoans & Customer Satisfaction of Sundram Finance

S

pli

D i

-

Sampling is the selection of some part of aggregate or totalit on the basis of

which a judgementorinference aboutthe aggregate ortotalit is made.

S

pli

Uni

-

The sampling unitof my sur ey includesthe existing customer. Thissu ery was

done withthe help of proper questionnaire.

Determine or define the problem or opportunity

that is faced

Specify what information is needed

Identify the sources of the information.

Decide on the techniques for accruing the

Gather and process the information

Analyze and interpret the meaning.

Present the findings to the decision makers.


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Sampling Size-

In my survey, I have used a sample unit of 70 existing and non existing

respondents.

Sampling Method-

In my survey, I have used Simple Random Sampling Method. In this I

administered a structured questionnaire and personal interview

Data Collection-

Data Collection was done in two ways they were-

1. Primary Data Collection

2. Secondary data Collection

Primary Data Collection

Primary Data was collected by using structured questionnaire and by taking

interviews of the respondents. A structured questionnaire was formulated after

conducting a pilot Survey.

Secondary data Collection

This was done by referring to the literature available of the banks.

Analysis and Interpretation-

Data collected was compiled up and on the basis of percentage method depicted

through bar diagrams Interpretation was done and recommendations was given. .


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Loans


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TYPES OF LOANS

Secured

A secured loan is a loan in which the borrower pledges some asset (e.g. a car or

property) as collateral for the loan.A subsidized loan is a loan that will not gain interest before you begin to pay it. It

is known to be used at multiple colleges.

A unsubsidized loan is a loan that gains interest the day of disbursement.

A mortgage loan is a very common type of debt instrument, used by many

individuals to purchase housing. In this arrangement, the money is used to purchase the

property. The financial institution, however, is given security a lien on the title to the

house until the mortgage is paid off in full. If the borrower defaults on the loan, the

bank would have the legal right to repossess the house and sell it, to recover sums

owing to it.

In some instances, a loan taken out to purchase a new or used car may be

secured by the car, in much the same way as a mortgage is secured by housing. The

duration of the loan period is considerably shorter often corresponding to the useful

life of the car. There are two types of auto loans, direct and indirect. A direct auto loan is

where a bank gives the loan directly to a consumer. An indirect auto loan is where a car

dealership acts as an intermediary between the bank or financial institution and the

consumer.

A type of loan especially used in limited partnership agreements is the recourse

note. A stock hedge loan is a special type of securities lending whereby the stock of a

borrower is hedged by the lender against loss, using options or other hedging strategies

to reduce lender risk. A pre-settlement loan is a non-recourse debt, this is when a

monetary loan is given based on the merit and awardable amount in a lawsuit case. Only

certain types of lawsuit cases are eligible for a pre-settlement loan. This is considered a

secured non-recourse debt due to the fact that if the case reaches a verdict in favor of

the defendant the loan is forgiven.


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Unsecured

Unsecured loans are monetary loans that are not secured against the borrower's

assets. These may be available from financial institutions under many different guises

or marketing packages:

y credit card debty personal loansy bank overdraftsy credit facilities or lines of credity corporate bonds (may be secured or unsecured)The interest rates applicable to these different forms may vary depending on the lender

and the borrower. These may or may not be regulated by law. In the United Kingdom,

when applied to individuals, these may come under the Consumer Credit Act 1974.

Demand

Demand loans are short term loans (typically no more than 180 days) that are

atypical in that they do not have fixed dates for repayment and carry a floating interest

rate which varies according to the prime rate. They can be "called" for repayment by the

lending institution at any time. Demand loans may be unsecured or secured.

Target markets

Personal or commercial

Loans can also be subcategorized according to whether the debtor is an

individual person (consumer) or a business. Common personal loans include mortgage

loans, car loans, home equity lines of credit, credit cards, installment loans and payday

loans. The credit score of the borrower is a major component in and underwriting and

interest rates (APR) of these loans. The monthly payments of personal loans can be

decreased by selecting longer payment terms, but overall interest paid increases as well.

For car loans in the U.S., the average term was about 60 months in 2009.

Loans to businesses are similar to the above, but also include commercial

mortgages and corporate bonds. Underwriting is not based upon credit score but rather

credit rating.


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LOAN PAYMENT

The most typical loan payment type is the fully amortizing payment in which

each monthly rate has the same value overtime.

The fixed monthly paymentP for a loan ofL

for n months and a monthly interestrate c is:

Abuses in lending

Predatory lending is one form of abuse in the granting of loans. It usually

involves granting a loan in order to put the borrower in a position that one can gain

advantage over him or her. Where the moneylender is not authorized, they could be

considered a loan shark.

Usury is a different form of abuse, where the lender charges excessive interest. In

different time periods and cultures the acceptable interest rate has varied, from no

interest at all to unlimited interest rates. Credit card companies in some countries have

been accused by consumer organisations of lending at usurious interest rates and

making money out of frivolous "extra charges".

Abuses can also take place in the form of the customer abusing the lender by not

repaying the loan or with an intent to defraud the lender.


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CAR LOAN PROVIDED BY VARIOUS BANKS

Car Loans

The No. 1 financier for car loans in the country. Network of more than 2500

channel partners in over 1000 locations. Tie-ups with all leading automobile

manufacturers to ensure the best deals. Flexible schemes & quick processing. Hassle-

free application process on the click of a mouse. The No. 1 Financier for Car Loans in

India.

New Car

Turn your dream into reality. Own that new car you have always desired, with a

little help from us. We offer loans up to 100% of on -road cost on select models, and up

to 95% of the ex-showroom price on others. Our interest rates would pleasantly

surprise you. Whats more, you can take up to 7 years to repay the loan.

Worried about paperwork? Relax. The process for getting a loan involves only a

few simple steps and we will tailor-make the loan to suit your needs.

Premium Benefits

y Pay interest only on the funds you withdraw.y Pay only a minimum of 5 % of the utilised amount. No fixed EMIs.

Arm yourself with these tools:

y A Roaming Current accounty Multicity Cheque Booky Internet Banking Accessy Access to 24-hour Customer Care

Important

All loans are at the sole discretion of ICICI Bank. Car loan offerings mentioned in these

pages are subject to change without prior notice.


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Baroda Car Loan

In todays fast paced world, a vehicle is but a necessity. Yet other expenses and

plans in life take priority and the dream of owning a car takes a back seat. Whether as a

comfortable and dependable means of transport or as a status symbol in society, we

believe you deserve ownership of a vehicle.

The Car Loans from Bank of Baroda are designed to finance the car that suits

your need and matches to your status & taste.

Bank of Baroda also presents a unique add on facility for installation of CNG /

LPG gas-kit in new/old (not more than 3 years) four wheeler. Save money. Save earth.

Convert to alternative fuel today and bank on us for your financial requirements.

Key Benefits

y Loans available up to Rs 15 Lacs for any car make/model (Inclusive of Gas-Kit).y Loans can be availed for new and second-hand vehicles (Not more than 3 years

old).

y Repayment period as long as 7 years.y Low interest rates.


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Is your dream car still a dream?

Axis Banks Power Drive will help realize your dream. With some of the worlds

finest cars now available in India dont let the price tags discourage you. Power Drive

will bridge that distance by financing a major part of the cost of your new car. So, you

dont have to put the brakes on your ambition.

y Loan value calculated as per the on-road-price of the vehicle.y Attractive interest rates.y LTV of upto 85% of the on -road-price on selected models.y Loans available for salaried and self employed individuals, proprietorships and

partnership firms.

y Special schemes for Axis Bank Salary and Priority accountholders.y No income proof schemes available.y Loans offered from Rs. 1 lac onwards.

y Loans tenure from 1 year to 7 years.


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Car Loan

Move ahead in life with SBI Car Loans! If you have been putting off purchasing

that Car, we invite you to go through our Car Loan Scheme. Low interest rates, easy

repayment options, total transparency.

Finance to include vehicle registration charges, insurance, one-time road tax and

accessories (subject to conditions).

Well, what are you waiting for? Just contact any of our branches (more than

6000) that offer Car Loans or our Personal Banking Branches and give wheels to your

desire!

You can apply for an SBI Car Loan to purchase :

y A new car, jeep, Multi Utility Vehicle (MUV) or SUV (any make or m odel)y A used car / jeep / MUV /SUV (not more than 5 years old). (any make or model)

Enjoy the SBIAdvantage :

Excellent service and lower costs. A quick survey of similar schemes available

elsewhere and you will find that SBI Car Loans for new and old ve hicles offer you :

y Lowest interest rates.y Longer repayment period of upto 84 months.y No hidden costs or administrative charges.y Finance for one-time road tax, registration fee, insurance premium and

accessories.

y No advance EMIs(Some Banks/companies ask you to pay one or more EMIs atthe time of disbursement of loan, thereby effectively reducing your loan amount).


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CitibankAuto Loan

Loans to finance your dream car, whether it is brand new or pre-owned in just

30 minutes* if you are an existing Citibank customer. Also leverage your car to meet

your cash needs with Car Cash-in.

Top 3 reasons to get a CitibankAuto Loan

1. Loans for new car, used car and loans against your car.

2. Competitive interest rates.

3. Flexible tenure from 1 year to 5 years.

Did You Know

y As a Citibank customer, you can get your auto loan sanctioned in 30 minutes.y When you take a loan against your car, you can retain ownership of the car.

Our basket ofAuto Loans

New Car Finance

Get a loan up to 90% of the car value, for a new Maruti car!

Car Cash-in

Get a loan against your car. Citibank offers loans up to 85% of your car value.

Pre-owned Car Finance

You can get a loan up to 85% of the value of the pre-owned car you want to buy.

Features of a CitibankAuto Loan

New car and pre-owned car

y New cars and Pre-owned carsy Auto Loans at competitive interest rates.y You can choose any tenure from 12 to 60 months.y Simple documentation.y Easy repayment options.


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Car Finance

Own a vehicle with the friendliest and most convenient car loan. Either you can

purchase a new Car/ Van/ Jeep or raise loan to purchase old vehicles that are not older

than 3 years. Finance will be provided for purchase of vehicle of indigenous/ foreign

makes.

Eligibility

Individuals as well as Business Concerns (Corporate or non-corporate).

Amount ofLoan

For Individuals: 25 times of the monthly net salary OR Rs.15 lac, whichever is

lower. Income of spouse can be taken into account for determining loan amount. In such

cases, the spouse shall stand as a guarantor.

Margin :20%

Security

The vehicle purchased with the amount of loan is to be hypothecated to the Bank.

It will be registered in the name of the borrower jointly with the Bank. Guarantee of

spouse, if employed or third party guarantee is acceptable to Bank.


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CAR LOAN PROCESS

PAPERWORK& OTHER DOCUMENTATION

Car loan requires less paperwork than a home loan. In fact it is possible to get a

car loan within a week! It is because the bank does not have to verify any asset as in the

case of home loans.

Car loan application process:

Enquiry with a lender: Firstly you need to get in touch lenders and get them to

make loan offers to you. Then negotiate with them to get the best car loan interest rates.

Check if there are any special offers too. Then all you need to do is select the best bank

(lender) by comparing the information you have collected to choose the best deal for

you. Documents Collection: After your lender selection, their direct selling agent will

visit you to collect documents supporting proof of income, residence proof, and identity.

You may be have to give copies of IT returns, salary slips, bank statements, passport,

driving license, and other relevant documents as well. (Please note that these

requirements vary across lenders.)

Field Investigation Agency Representative Visit:

After submitting the documents, a field investigator visits your home to double

check the facts provided in the documents, such as your place of residence, tenure at

work place, and so on. It is important that you are present during this visit to clarify any

question that the investigator might have. Otherwise, the investigator might not get all

the facts clearly and could report that the facts you provided do not actually add up -

thus forcing the lender to reject your loan application.

Loan approved:

After the lender is satisfied with the authenticity of your documents, the loan is

approved. The lender then disburses the amount through cheques or demand drafts

(DD).


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CAR LOAN FINANCE

Car Loan Finance is the process where Finance Companies offer loans to buy

cars. Nowadays, it is quite easy to get an automobile loan. It is the age of organized and

institutional Car Finance. There are many innovative and tempting offers given by the

Car Finance Companies to the Customers for implementing aggressive marketing of Car

Finance Schemes.

The various schemes that are available for Car Loan Finance are:

y Marginy Schemesy Security Deposit Schemesy Hire Purchase & Lease EMIy Advance EMI Schemesy Processing Feesy DSA/DMAs Vs Dealer

Car Loan Finance can be taken either singly or jointly, if there are more than one

persons looking for Car Finance. When more than one persons seek Car Finance, they

are called co-applicants. In general, a Guarantor is not required when you are going for a

Car Loan Finance, but if your income is below the credit criteria, then you may require aGuarantor for your loan.

If you want to avail a car loan, the various costs that you have to pay to the

Finance Company are:

Interest cost, it is charged by the Finance Company to provide finance. Processing Fees, this is a one time charge which is taken for the purpose of legal

paperwork and processing. The range is 2-3 percent of the loan and it should be

paid as an upfront payment to the company.

There are two methods of calculating interest, one is the Reducing BalanceMethod and the other is the Flat Rate Method. In the Reducing Balance Method

(also known as Written Down Value System), the interest is calculated on the

balance of the loan which is outstanding. The Flat Rate system refers to the

calculation of interest on the total amount over the entire loan and principal


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duration and in this case, the interest is divided equally with the number of

installments.

When you are going to buy a car, some requirement of security is there. These

are:

1. Hypothecation of the car2. Registration of the hypothecation charge in the RTO (Regional Transport Office)

Books.

3. A third party guarantee or Guarantee of Spouse if she is employed.

Time Duration or Tenure of the Loan

The time period in which the Customer has to repay the loan to the Finance

Company is called the Tenure. The Customer has a choice to repay the loan. The optionsare available from 1-7 years, depending on your capacity to repay the loan.

EMI (Equated Monthly Installments)

An EMI comprises of a part of the Principal and the interest, and it is a method of

repaying the loan. The amount of EMI is dependent on three factors: the loan term, the

rate of interest, and the amount of the loan.

Sometimes, the Manufacturers and Dealers provide some benefits to the

Customer which includes giving Discount to the Customer. This Discount is shared

among the Manufacturer, the Dealer, and the Finance Companies.

Registration amount and Insurance

For an individual, the Registration amount is 3.5% of the showroom price of the

car. For a company, it is 10.5% of the showroom price of the car. Insurance rate

applicable for both individuals and companies is at a flat rate of 3.6% of the showroom

price of the car for both companies and individuals.

The Conditions that are applicable in the Financing Agreement between the

Finance Company and the Individual are:


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The entire risk of non-performance is accepted by the Hirer.The benefits of warranties that are provided by the supplier or Manufacturer of

the Vehicle should always go to the Hirer.

The Vehicle shall be insured by the Hirer and he should forward the insurancecopies regularly to the Finance Company every year.

In order to indemnify the Finance Company against all duties, taxes, fees, and anyother outstanding payables regarding the Vehicle, all such payments must be

paid by the Hirer. The Hirer has to maintain the Vehicle in serviceable and good

condition. To allow the Finance Company for inspection of the Vehicle anytime

when it is needed. Change of possession of the Vehicle cannot be allowed in

terms of mortgaging, selling, assigning, encumbering or any other way if

permission is not taken from the Finance Company. In case of default, the options open for the Finance Company are: It may be demanded by the Finance Company that the Vehicle is returned to the

company. Immediate possession can be taken by the authorized official recruited

by the Finance Company by entering the premises where the Vehicle is kept.

After giving a notice to the Hirer, the Finance Company has the options of selling,hiring, or using the Vehicle. If the Vehicle is resold, the Hirer has to pay for the

deficiency in case there is a shortfall. The Hirer also has to pay for any damages

caused to the Vehicle.

The documents that are required in the agreement between the Hirer and the

Finance Company are:

1. Hire Purchase Agreement2. Schedule of Charges, Deposits, and Rates3. Irrevocable Power of Attorney4. Promissory Note5. Form 20 for Vehicle Registration6. Certificate of Inspection7. Form 26 for Intimation of Loss or Destruction of Certificate of Registration and

application of - duplicate certificate


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8. Form 27 for assignment of new Registration mark on transfer of the Vehicle toanother state.

9. Form 28 for NO OBJECTION CERTIFICATE and grant of certificate.10. Form 29 Form of Notice to Transfer of Ownership of a Vehicle.11. Form 30 report of Transfer of Ownership of a Vehicle.12. Form 34 Application for making an entry of an agreement of Hire

Purchase/Lease/Hypothecation subsequent to Registration.

13. Form 35 Notice of Termination of an agreement of Hire Purchase/ Lease/Hypothecation Dealer Authorization Letter.

14. Signature verification15. Disbursement Memo16. ChecklistHow Can You Get Your Vehicle Financed?

1. Banks :

A Bank is the most easiest source to get a Car Loan Finance. If there is an

acquaintance with the Bank, it is viable. Some other Finance Companies are providing

better service than Banks. Processing paperwork takes longer time in case of Banks.

2. Non-Banking Financial Companies (NBFCs)

The Dealers and Manufacturers have a tie-up with this type of companies. These

are popular because of their promptness, though people should be cautious about

things like Dealer Discounts in which case the financiers claim that better Discounts are

available from the Dealer if the Vehicle is financed from them by the buyer. This may be

fraudulent because there might be a financier-Dealer nexus.

The scenario of Car Loan Finance in India is quite eminent. Various Banking as

well as Non-Banking Financial Companies are offering Car Loan Finance such as

CitiBank, HDFC Bank, ICICI Bank, Maruti Finance, Saraswat Bank, SBI Car Loans, and

Sundaram Finance etc.

If one has set his eyes on a wonderful car but the size of his pocket restrains him

to buy one, then opting for Car Finance is the best way out since they claim to be


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specialists in car finance, helping the customers to finance their cars in the most cost

effective way.

The Car Finance Dealers help the customers in the follo wing ways:

Provision of retail automotive financing Provision of wholesale financing Provision of capital loans. Car Finance cover both old and new cars.

The car finance services rendered by the different car finance dealers or brokers

can be discussed as follows: Private Purchase Plan

1. Traditional Purchase Plan: In this scheme the buyer has to start with an initial

deposit which has to be 10% and abo ve.

2. Flexible Purchase Plan: Here the buyer can postpone the payment till the

expiry of the contract. In this scheme the buyer agrees for the final payment

taking into account the age, mileage and the use of the car.

3. Advantage Plan: Here the buyer has the option of not making the final

payment and returning the car .

Business Purchase Plan

1. Traditional Finance Plan The buyer here has to pay for the cost of the car and

the interest in fixed monthly installments.

2. Flexible Purchase Plan: Similar to the private flexible purchase plan ,

payment of a lump sum amount is allowed at the end of the contract.

3. Advantage Plan: The buyer can choose from 24 , 30 or 36 monthly payments.


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CAR REFINANCE

It may be the case that you hate the Car Loan you have taken, but you love your

car. There is great news for you. It is the best time to do Car Refinance. Re-Finance is

replacing an older Loan with a new Loan offering better terms. This is applicable for Car

Refinance also. Re-Financing your Car Loan has become easy with Interest Rates going

down day by day. If you go through your present Car Loan contract, certain questions

may arise in your mind such as:

1. Do you have to pay a high Rate of interest on a long -term Loan?

2. Is there a clause of penalty for early payment?

You should be ready to take a new Car Loan if there is a high Interest Rate and

there are no or low penalties in case you make an early payment.

Brian Reed, who is the President of Capital One Auto Finance recommends that

Refinancing your auto Loan via the Internet is one of the best-kept secrets today. He

says that the time taken to complete an application which is about 10 minutes is all that

it takes.

There are some other examples that might be unbelievable to you. Sometimes it

is heard that a person who has bought a new car is stuck with a Loan which is charging

about 18% Rate of Interest. The monthly Payments can be slashed down if he re-

finances the car at a competitive Rate.

Capital One recently acquired Capital One Auto Finance, which had been giving

Loans mostly to Super-prime Customers. This has now resulted in their ability to

provide Refinancing for Car Loans to a more broad spectrum of Customers, which

includes the Sub-prime or undeserved class of Customers.

The Refinancing game is also being played by the other lenders. For example, E-

Loan Inc., and BankLoan.com.

Capital One Auto Finance started their business in 1995 and they have become a

leader in the field of online lending.

At the present time, one of the lowest Interest Rates is offered by Capital One

Auto Finance in the field of Car Refinancing. Those who have strong credit are able to


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re-finance Loans up to 5 years at 6.75% (for current Interest Rates, please see Capital

One Auto Finance).

Applications are taken over the Internet and online lenders like E-Loan and

Capital One Auto Finance provide Customers the Interest Rate quotes and the monthly

payment quotes. After establishing a line of credit a check or draft is issued which can

be utilized at a car dealership.

1. The Saver This type of Customer always keeps an eye on the Fed (Federal

Reserve). They start shopping in an attempt to improve their own financial

condition when Interest Rates are falling down.

2. The Newly Educated Remorseful A person may have purchased a new car

recently and the finance was made through the dealership. When he was madeaware by a friend or neighbor that the dealer has marked the Interest Rate up by

several percentage points, then he becomes remorseful and he starts to search

for a new Car Loan.

3. The Budgeter A person might have purchased a car on a Loan which is

short term, for example 2 years. In spite of the Payments being high, they are

affordable to him. If this Customer's financial condition changes, -say he has

purchased a house and his monthly expenditure is going up. After looking at his

Car Loan, he develops a desire to distribute the payment over a longer time

duration. An easy way to do this is Refinancing the Car Loan.

4. The Lessor These days many people lease out their cars. At the end of the lease

period, sometimes it is seen that they have a desire to keep the car. The dealer is

unable to help out to establish a Loan in some instances.


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Banks/Rates New Car Loan

(Reducing)

Used Car

Loan

(Reducing)

Processing

Fee

ICICI Bank 10% - 11.75%

(for 36 months -

60 months Loan

Tenure),

12.25% - 13.25%

(for 24 months -

35 months Loan

Tenure),

14.25%

(for 23 months

Loan Tenure)

15.50% -

17%

Rs.2500/- to

Rs.5000/-

HDFC Bank 10.50% -11.25% 17% - 19% Rs 2950/- to

Rs. 3950/-KotakMahindra 10% - 12.5% 17% - 20% Rs.3300/- to

Rs.4750/-

Axis Bank 9.50% - 10.50% 16.50% -

18%

Rs.3000/- to

Rs.3500/-

State Bank ofIndia (SBI) 8%

(Fixed for 1 year)

9.75%

(from 2 & 3 year),

then

floating (market

rate)

N. A. 0.5% of loan

Amount

Bank OfIndia 10.75%(upto 3

yrs ),Then

11.25%

10.50% -

10.75%

N.A

Federal Bank 9.75% for 3 yrs,

10.25% for 5 yrs

N. A. Rs 1655/- to

Rs 2758/-


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CAR LOAN ELIGIBILITY

Tenure (in Years)

Banks Salaried Self- Employed

Citibank - -

ICICI 1 to 7 1 to 7

HDFC 1 to 7 1 to 7

SBI 1 to 7 1 to 5

Bank of Baroda - -

Oriental Bank of Commerce - -

Documents Required


Citibank Application form with

photograph, Identity &

residence proof, Latest salary

slip, Form 16, Bank statements

not necessary

Application form with


residence proof, Last 2 years

income tax returns, Last

6months bank statement.

ICICI Application form with




not necessary

Application form withphotograph, Identity &




HDFC Application form with




not necessary



residence proof,Last income tax

returns, Bank statement waived

for small cars,for mid-sized &

premium cars if income is

greater than 15 lacs.

SBI Application form with Application form with


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not necessary




6months bank statement.Bank of

Baroda




slip, Form 16, Last 6 months

bank statement.






Oriental

Bank of

Commerce




slip, Form 16, Last 6 months

bank statement.






Partnership Firm


Citibank - Application form with


residence proof, Firm

shoulld have a minimum

PAT( profit after tax)

income of Rs.60,000, last 2

years income tax returns,

last 2 years profit & loss

account.

ICICI - Application form withphotograph, Identity &

residence proof, Firm

shoulld have a minimum

PAT( profit after tax)


38/66

38 | P a g e

income of Rs.60,000, last 2



account.HDFC - Application form with


residence proof, last 2



account.

SBI - -

Bank of Baroda - -

Oriental Bank of Commerce - -


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39 | P a g e

DOCUMENTATION REQUIRED

DOCUMENTS SALARIED SELF- EMPLOYED PVTLTD /

LTD CO'S

PUBLIC

LTD CO.

Application form Required Required Required Required

Income

Documentation

(latest 2 years)

ITR or Form 16

and last 2

months salary

slips

ITR and audited

accounts or

computation of

income statement

and assessment

order copy

ITR and audited accounts

Bank Statement

(previous 3 months)

Required Required Required Required

Proof of identity Required Required - -

Proof of Residence Required Required - -

Office Address Proof - Required Required Required

Legal Documents - - Memorandum of

Association and Articles

of Association


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40 | P a g e

Case Study


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41 | P a g e

Suppose Mr. Brijesh Sharma a Government employee wants to purchase a New Car

costing around Rs. 6,00,000.

Government Employee Private Employee

Documents Required

2 Colour recent photographssigned across

6 Months Bank statement 2 Month Salary Slip Last two years ITR with

computation of Income

Proof of Identity Residential proof Form 16 A

Documents Required

2 Colour recent photographssigned across

6 Months Bank statement 2 Month Salary Slip Last two years ITR with

computation of Income

Proof of Identity Residential proof

Farmer / Agriculturist

Documents Required

2 Colour recent photographs signedacross

6 Months Bank statement Proof of Identity Residential proof Bahi Minimum 3-5 Acres Own Land

Therefore following Finance schemes provided by the bank with different tenures.

Loan Amount Applied For Rs. : 500000

Rate of Interest : 8%


42/66

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EMIINADVANCE

Months EMI

12 Rs. 43206/-

24 Rs. 22464/-

36 Rs. 15564/-

48 Rs. 12126/-

60 Rs. 10071/-

Following Schedule Is For :

500000 to repay in 11 months. All calculations are based on EMI in Advance.

EMINumber EMIAmount InterestAmount Principal Reduction Balance Due

1. Rs.43206 Rs.3045 Rs.40161 Rs.416633

2. Rs.43206 Rs.2778 Rs.40429 Rs.376204

3. Rs.43206 Rs.2508 Rs.40698 Rs.335506

4. Rs.43206 Rs.2237 Rs.40969 Rs.294537

5. Rs.43206 Rs.1964 Rs.41243 Rs.253294

6. Rs.43206 Rs.1689 Rs.41518 Rs.211777

7. Rs.43206 Rs.1412 Rs.41794 Rs.169982

8. Rs.43206 Rs.1133 Rs.42073 Rs.127909

9. Rs.43206 Rs.853 Rs.42353 Rs.85556

10. Rs.43206 Rs.570 Rs.42636 Rs.42920

11. Rs.43206 Rs.286 Rs.42920 Rs.0


43/66

43 | P a g e

Total InterestAmount : Rs.18474

Complete EMIList

Months EMI

12 Rs. 43206/-

24 Rs. 22464/-

36 Rs. 15564/-

48 Rs. 12126/-

60 Rs. 10071/-

Note: Interest calculated at 1/12th of annual interest rate on the remaining principal

amount. (Rounding errors possible)


44/66

44 | P a g e

Following Schedule Is For :

500000 to repay in 23 months. All calculations are based on EMI in Advance.


1. Rs.22464 Rs.3184 Rs.19280 Rs.458256

2. Rs.22464 Rs.3055 Rs.19409 Rs.438847

3. Rs.22464 Rs.2926 Rs.19538 Rs.419309

4. Rs.22464 Rs.2795 Rs.19668 Rs.399640

5. Rs.22464 Rs.2664 Rs.19800 Rs.379841

6. Rs.22464 Rs.2532 Rs.19932 Rs.359909

7. Rs.22464 Rs.2399 Rs.20064 Rs.339844

8. Rs.22464 Rs.2266 Rs.20198 Rs.319646

9. Rs.22464 Rs.2131 Rs.20333 Rs.299313

10. Rs.22464 Rs.1995 Rs.20468 Rs.278845

11. Rs.22464 Rs.1859 Rs.20605 Rs.258240

12. Rs.22464 Rs.1722 Rs.20742 Rs.237498

13. Rs.22464 Rs.1583 Rs.20881 Rs.216617

14. Rs.22464 Rs.1444 Rs.21020 Rs.195597

15. Rs.22464 Rs.1304 Rs.21160 Rs.174437

16. Rs.22464 Rs.1163 Rs.21301 Rs.153136

17. Rs.22464 Rs.1021 Rs.21443 Rs.131693

18. Rs.22464 Rs.878 Rs.21586 Rs.110108

19. Rs.22464 Rs.734 Rs.21730 Rs.88378

20. Rs.22464 Rs.589 Rs.21875 Rs.66503

21. Rs.22464 Rs.443 Rs.22021 Rs.44482

22. Rs.22464 Rs.297 Rs.22167 Rs.22315

23. Rs.22464 Rs.149 Rs.22315 Rs.0

Total InterestAmount : Rs. 39133


45/66

45 | P a g e

Complete EMIList

Months EMI

12 Rs. 43206/-

24 Rs. 22464/-

36 Rs. 15564/-

48 Rs. 12126/-

60 Rs. 10071/-




46/66

46 | P a g e

Following Schedule Is For : 500000 to repay in 35 months.

All calculations are based on EMI in Advance.


1. Rs.15564 Rs.3230 Rs.12335 Rs.472101

2. Rs.15564 Rs.3147 Rs.12417 Rs.459684

3. Rs.15564 Rs.3065 Rs.12500 Rs.447184

4. Rs.15564 Rs.2981 Rs.12583 Rs.434601

5. Rs.15564 Rs.2897 Rs.12667 Rs.421934

6. Rs.15564 Rs.2813 Rs.12752 Rs.409182

7. Rs.15564 Rs.2728 Rs.12837 Rs.396345

8. Rs.15564 Rs.2642 Rs.12922 Rs.383423

9. Rs.15564 Rs.2556 Rs.13008 Rs.370415

10. Rs.15564 Rs.2469 Rs.13095 Rs.357320

11. Rs.15564 Rs.2382 Rs.13182 Rs.344138

12. Rs.15564 Rs.2294 Rs.13270 Rs.330868

13. Rs.15564 Rs.2206 Rs.13359 Rs.317509

14. Rs.15564 Rs.2117 Rs.13448 Rs.304061

15. Rs.15564 Rs.2027 Rs.13537 Rs.290524

16. Rs.15564 Rs.1937 Rs.13628 Rs.276896

17. Rs.15564 Rs.1846 Rs.13718 Rs.263178

18. Rs.15564 Rs.1755 Rs.13810 Rs.249368

19. Rs.15564 Rs.1662 Rs.13902 Rs.235466

20. Rs.15564 Rs.1570 Rs.13995 Rs.221471

21. Rs.15564 Rs.1476 Rs.14088 Rs.207383

22. Rs.15564 Rs.1383 Rs.14182 Rs.193202

23. Rs.15564 Rs.1288 Rs.14276 Rs.178925


47/66

47 | P a g e

24. Rs.15564 Rs.1193 Rs.14372 Rs.164554

25. Rs.15564 Rs.1097 Rs.14467 Rs.150086

26. Rs.15564 Rs.1001 Rs.14564 Rs.135522

27. Rs.15564 Rs.903 Rs.14661 Rs.120861

28. Rs.15564 Rs.806 Rs.14759 Rs.106103

29. Rs.15564 Rs.707 Rs.14857 Rs.91246

30. Rs.15564 Rs.608 Rs.14956 Rs.76290

31. Rs.15564 Rs.509 Rs.15056 Rs.61234

32. Rs.15564 Rs.408 Rs.15156 Rs.46078

33. Rs.15564 Rs.307 Rs.15257 Rs.30820

34. Rs.15564 Rs.205 Rs.15359 Rs.15461

35. Rs.15564 Rs.103 Rs.15461 Rs.0


Complete EMIList

Months EMI

12 Rs. 43206/-

24 Rs. 22464/-

36 Rs. 15564/-

48 Rs. 12126/-

60 Rs. 10071/-




48/66

48 | P a g e




1. Rs.12126 Rs.3252 Rs.8873 Rs.479001

2. Rs.12126 Rs.3193 Rs.8932 Rs.470069

3. Rs.12126 Rs.3134 Rs.8992 Rs.461077

4. Rs.12126 Rs.3074 Rs.9052 Rs.452025

5. Rs.12126 Rs.3014 Rs.9112 Rs.442913

6. Rs.12126 Rs.2953 Rs.9173 Rs.433740

7. Rs.12126 Rs.2892 Rs.9234 Rs.424506

8. Rs.12126 Rs.2830 Rs.9296 Rs.415211

9. Rs.12126 Rs.2768 Rs.9358 Rs.405853

10. Rs.12126 Rs.2706 Rs.9420 Rs.396433

11. Rs.12126 Rs.2643 Rs.9483 Rs.386951

12. Rs.12126 Rs.2580 Rs.9546 Rs.377405

13. Rs.12126 Rs.2516 Rs.9610 Rs.367795

14. Rs.12126 Rs.2452 Rs.9674 Rs.358121

15. Rs.12126 Rs.2387 Rs.9738 Rs.348383

16. Rs.12126 Rs.2323 Rs.9803 Rs.338580

17. Rs.12126 Rs.2257 Rs.9868 Rs.328712

18. Rs.12126 Rs.2191 Rs.9934 Rs.318777

19. Rs.12126 Rs.2125 Rs.10000 Rs.308777

20. Rs.12126 Rs.2059 Rs.10067 Rs.298710

21. Rs.12126 Rs.1991 Rs.10134 Rs.288576

22. Rs.12126 Rs.1924 Rs.10202 Rs.278374


49/66

49 | P a g e

23. Rs.12126 Rs.1856 Rs.10270 Rs.268104

24. Rs.12126 Rs.1787 Rs.10338 Rs.257766

25. Rs.12126 Rs.1718 Rs.10407 Rs.247359

26. Rs.12126 Rs.1649 Rs.10477 Rs.236882

27. Rs.12126 Rs.1579 Rs.10546 Rs.226336

28. Rs.12126 Rs.1509 Rs.10617 Rs.215719

29. Rs.12126 Rs.1438 Rs.10687 Rs.205031

30. Rs.12126 Rs.1367 Rs.10759 Rs.194273

31. Rs.12126 Rs.1295 Rs.10830 Rs.183442

32. Rs.12126 Rs.1223 Rs.10903 Rs.172540

33. Rs.12126 Rs.1150 Rs.10975 Rs.161564

34. Rs.12126 Rs.1077 Rs.11049 Rs.150516

35. Rs.12126 Rs.1003 Rs.11122 Rs.139394

36. Rs.12126 Rs.929 Rs.11196 Rs.128197

37. Rs.12126 Rs.855 Rs.11271 Rs.116926

38. Rs.12126 Rs.780 Rs.11346 Rs.105580

39. Rs.12126 Rs.704 Rs.11422 Rs.94158

40. Rs.12126 Rs.628 Rs.11498 Rs.82660

41. Rs.12126 Rs.551 Rs.11575 Rs.71086

42. Rs.12126 Rs.474 Rs.11652 Rs.59434

43. Rs.12126 Rs.396 Rs.11729 Rs.47705

44. Rs.12126 Rs.318 Rs.11808 Rs.35897

45. Rs.12126 Rs.239 Rs.11886 Rs.24011

46. Rs.12126 Rs.160 Rs.11966 Rs.12045

47. Rs.12126 Rs.80 Rs.12045 Rs.0



50/66

50 | P a g e

Complete EMIList

Months EMI

12 Rs. 43206/-

24 Rs. 22464/-

36 Rs. 15564/-

48 Rs. 12126/-

60 Rs. 10071/-

72 Rs. 8709/-




51/66

51 | P a g e




1. Rs.10071 Rs.3266 Rs.6805 Rs.483124

2. Rs.10071 Rs.3221 Rs.6850 Rs.476274

3. Rs.10071 Rs.3175 Rs.6896 Rs.469378

4. Rs.10071 Rs.3129 Rs.6942 Rs.462436

5. Rs.10071 Rs.3083 Rs.6988 Rs.455448

6. Rs.10071 Rs.3036 Rs.7035 Rs.448413

7. Rs.10071 Rs.2989 Rs.7082 Rs.441332

8. Rs.10071 Rs.2942 Rs.7129 Rs.434203

9. Rs.10071 Rs.2895 Rs.7176 Rs.427026

10. Rs.10071 Rs.2847 Rs.7224 Rs.419802

11. Rs.10071 Rs.2799 Rs.7272 Rs.412530

12. Rs.10071 Rs.2750 Rs.7321 Rs.405209

13. Rs.10071 Rs.2701 Rs.7370 Rs.397839

14. Rs.10071 Rs.2652 Rs.7419 Rs.390420

15. Rs.10071 Rs.2603 Rs.7468 Rs.382952

16. Rs.10071 Rs.2553 Rs.7518 Rs.375434

17. Rs.10071 Rs.2503 Rs.7568 Rs.367866

18. Rs.10071 Rs.2452 Rs.7619 Rs.360247

19. Rs.10071 Rs.2402 Rs.7669 Rs.352578

20. Rs.10071 Rs.2351 Rs.7721 Rs.344857

21. Rs.10071 Rs.2299 Rs.7772 Rs.337085

22. Rs.10071 Rs.2247 Rs.7824 Rs.329262

23. Rs.10071 Rs.2195 Rs.7876 Rs.321386

24. Rs.10071 Rs.2143 Rs.7928 Rs.313457


52/66

52 | P a g e

25. Rs.10071 Rs.2090 Rs.7981 Rs.305476

26. Rs.10071 Rs.2037 Rs.8035 Rs.297441

27. Rs.10071 Rs.1983 Rs.8088 Rs.289353

28. Rs.10071 Rs.1929 Rs.8142 Rs.281211

29. Rs.10071 Rs.1875 Rs.8196 Rs.273015

30. Rs.10071 Rs.1820 Rs.8251 Rs.264764

31. Rs.10071 Rs.1765 Rs.8306 Rs.256458

32. Rs.10071 Rs.1710 Rs.8361 Rs.248096

33. Rs.10071 Rs.1654 Rs.8417 Rs.239679

34. Rs.10071 Rs.1598 Rs.8473 Rs.231206

35. Rs.10071 Rs.1541 Rs.8530 Rs.222677

36. Rs.10071 Rs.1485 Rs.8587 Rs.214090

37. Rs.10071 Rs.1427 Rs.8644 Rs.205446

38. Rs.10071 Rs.1370 Rs.8701 Rs.196745

39. Rs.10071 Rs.1312 Rs.8759 Rs.187985

40. Rs.10071 Rs.1253 Rs.8818 Rs.179168

41. Rs.10071 Rs.1194 Rs.8877 Rs.170291

42. Rs.10071 Rs.1135 Rs.8936 Rs.161355

43. Rs.10071 Rs.1076 Rs.8995 Rs.152360

44. Rs.10071 Rs.1016 Rs.9055 Rs.143304

45. Rs.10071 Rs.955 Rs.9116 Rs.134189

46. Rs.10071 Rs.895 Rs.9176 Rs.125012

47. Rs.10071 Rs.833 Rs.9238 Rs.115775

48. Rs.10071 Rs.772 Rs.9299 Rs.106475

49. Rs.10071 Rs.710 Rs.9361 Rs.97114

50. Rs.10071 Rs.647 Rs.9424 Rs.87691

51. Rs.10071 Rs.585 Rs.9486 Rs.78204


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52. Rs.10071 Rs.521 Rs.9550 Rs.68654

53. Rs.10071 Rs.458 Rs.9613 Rs.59041

54. Rs.10071 Rs.394 Rs.9677 Rs.49364

55. Rs.10071 Rs.329 Rs.9742 Rs.39622

56. Rs.10071 Rs.264 Rs.9807 Rs.29815

57. Rs.10071 Rs.199 Rs.9872 Rs.19942

58. Rs.10071 Rs.133 Rs.9938 Rs.10004

59. Rs.10071 Rs.67 Rs.10004 Rs.0


Complete EMIList

Months EMI

12 Rs. 43206/-

24 Rs. 22464/-

36 Rs. 15564/-

48 Rs. 12126/-

60 Rs. 10071/-




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Research Findings


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RESEARCHFINDIN S

D you have any au

omobile ?

Do youpurchase this in cash/

inance from Sundram Finance?

100%

0%

Yes No

10%

90%

Cash Finance


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Isthe Rate ofInterestis feasible provided by Sundram Finance?

Do you know which type of finance itis?

0%

20%

40%

60%

80%

Yes No

62%

38%

0%

10%

20%

30%

40%

50%

60%

70%

Yes No

36%

64%


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Isthe terms and conditions by the bank are clear?

Whataboutpaperwork ?

3! %

68%

Yes

No

0%

10%

!

0%

30%

"

0%

50%

60%

70%

Tough Easy

6# %

36%


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Isthe loan facility is provided by the automobile premises or youtake from other bank

0%

$ 0%

40%

60%

80%

Premises Own

79%

% 1%


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FINDINGS OF THE STUDY

As per my study

1. The awareness level of the citizens of Jabalpur are yet not more as they

mould into any shape where the company wants, they only wants auto

loan on any condition.

2. They dont have proper knowledge about the terms and conditions behind filling

the form.

3. They are not aware about other finance schemes provided by various other

banks.

4. As per my survey I found that respondents takes loan from where they

purchase vehicle and they not visit any other bank because they feel easiness .


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SUGGESTIONS FOR CUSTOMERS

Its always a delight to get the keys to a new car. For most, the only challenge is

paying for the car. Unless you have cash in hand, youll need some type of auto loan.

Follow these six keys to a great auto loan and you can ride around knowing you got the

best deal.

Manage Your Credit

One of the first things you should do before applying for an auto loan is review

your credit. All consumers are entitled to a free credit report, so use this resource. Find

out if theres anything you need to fix. Any errors or bad habits could affect your auto

loan rate.

Know How Much You Can Spend

Diligent budgeters already know this, but I dont run into very many diligent

budgeters. Track your budget any way you like and then find out how much your

payments might be with the car payment calculator.

Look at the Big Picture

The terms of your auto loan will determine how much you pay now and how

much the auto loan costs overall. Remember that a low cost now may not mean low

total costs for you in the big picture.

For example, most borrowers choose a low down payment because its easy to

manage today. However, that choice increases the total cost of your auto loan and

usually leaves youupside-down

(meaning you owe more on the vehicle than it

s

worth) for years to come.

Consider Insurance

When you ask various lenders what theyll offer you, you may find that you need

insurance to get the best auto loans. I m referring to disability insurance and life


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insurance at this point. The lender is concerned that something could happen to you and

you wouldnt be able to pay them back.

Having insurance might not be a requirement, however you should know all the

details if you already are insured.

Shop Around

This is simple but it is often overlooked. The most important point here is that

you dont have to get your auto loan from the dealership. I strongly encourage you to

check with a credit union, bank, or online lender. In most cases your car dealer won t

have the best auto loan. By consulting with an alternate lender before stepping onto the

lot, youll be armed with knowledge of whats fair -- and you may have some bargaining

power.

Avoid Prepayment Penalties

Things change in life and flexibility is important. Your auto loan should also be

flexible. Find a lender that will allow you to make extra payments or pay off the loan

entirely without any penalties. Its important to read the fine print some penalties

arent called penalties.

Find out how much loan you can really take

Although some financiers have schemes that give 100% car financing, they will

either take advance EMIs or a deposit from you. So you never really get what they

promise you. And you dont need to be a Noble laureate to understand that effectively

you shell out some money from your pocket. So where does the question of 100%

finance arise? Ask the supposedly shrewd marketers of loan products this question, if

you see a point.

Look beyond the interest factor

Don't rush in to take a car loan just because interest rates offered on such loans

are low. Effective interest rate would be a better parameter to judge a loan. It factors all

the costs involved in a loan like processing f ees and method of EMI calculation.


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Avoid getting lured by lowly quoted "flat interest rates". Again calculate the

effective rate of the scheme, which is on the basis of cash flows. The effective interest

rate actually turns out to be higher on this method of calculation than the normal

methods (Annual reducing balance, Monthly reducing balance etc).

The explanation to this is that principal doesn t get adjusted (read reduced) with

EMI payments unlike normal methods (Annual, Monthly reducing balance etc). So you

end up paying more interest, besides the loan amount.

Find out if the Bank is offering a step-up option

This option is suitable for persons who cant afford shelling out larger amounts

as monthly payments initially. But, expect to pay higher amounts with a salary hike,

promotions etc.

Take into account the processing fees , which usually range between 1% to 3

%, while making the decision to take a loan.

Read the fineprint

Find out in detail about the hypothecation of your vehicle to the financier, the

loan agreement that you will have to sign, and the stamp charges that you will have to

pay. Also try and get hold of a copy of the loan Agreement and read the fine print. Get a

clear picture of what a loan agreement is all about.

Find out about the pre-payment charges

That are applicable on payment of loans ahead of schedule. This is useful as one

would like to prepay some part of the loan as and when one gets money. This could

translate into savings, as outstanding principal amount would stand reduced after such

payments. These features help in your decision making during tie-breakers.

Find out your risk appetite

Are you the types who invest often in stock markets? Or you prefer the FDs? This

self-analysis could be important if you are contemplating going for a security deposit

scheme. As you would get no more than 12-15%p.a for the money you have deposited


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under this scheme. So here, there is an opportunity cost involved for not earning returns

the stock market way if you are high risk taker.

Check the depreciation factor .

If you take financing in the form of loan or hire purchase you get to claim

depreciation (You can claim these benefits only if you buy as a Sole Proprietor and not

as an individual). If you lease the vehicle, the financier gets to claim the depreciation.

Find out about the amortisation schedule to get a hang of the interest and principal

contribution of EMIs at different points of time.

When do you pay the monthly installment

The timing of paying the installment is important as your salary might getcredited at a later date than the date at which the payment has to be made. Then you

have to provide a cushion by having a reasonable amount of money on your savings

account.

Bargain and look for special discounts.

You can always negotiate the final rate of interest/EMI that you have to pay. Yes

thats possible. Also look out for some special benefits

Look for longer duration

If higher EMIs payments bother you. Go for a longer tenure loan. Usually car

financing is available from 1 to 5 years. However there are some banks which have

schemes which offer loans for 7 years. Hunt for them. Generally, the tenure is dependent

on the type of car you wish to purchase.

Thumb rule is :

A good second hand car market encourages banks to give longer tenure of loans.


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CONCLUSION

Indian auto market has more than 35 financers that offer auto financing

solutions to the intended car buyers. Being one of the fastest growing automobile

markets in the world, the Indian automobile market has got so much of potential and

hence a number of auto finance companies have come up to tap the booming market. It

can be added here that the passenger vehicle market constitutes almost 80% of

automobile sales. In 2008, the stock passenger car was about 11 per 1,000 people. The

production of passenger vehicle is further expected to go up at a CAGR of about 10%

from 2009-10 to 2012-13. So, sensing this market potential, many financial companies

in India have given special attention on auto financing.

During the 2000s, the auto finance in India was dominated by private banks,

when Citibank was the market leader. But its market share dropped from 27 per cent

during 90s to less than 8 percent during early 2000. ICICI Bank became the new leader

with almost 29.2 per cent market share during 2003-04. The journey continued till

2008 when HDFC bank took the lead. However, the current trend shows that the PSU

banks like SBI, PNB, Bank of Baroda, Bank of India, Canara Bank, Syndicate Bank and

Union Bank etc. are leaving behind their private sector counterparts in the Rs. 22,000

crore passenger car and 2-wheeler loan market. The reason behind this is the fact that,

private banks have been compelled to reduce their exposure to the sector owing to

increased delinquencies.

Due to upcoming more growth in this sector Sundram Finance have to develop

strategies which attract the customers, this is done by more advertising and sales

promotion activities etc.


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REFERENCES

1. Internet2. www.wiki.com3. www.autofaq.com4. Research Methodology : C.B. Mamoria5. Marketing Management : Philip Kotler 5

th Edition


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APPENDIX

1. Do you have any automobile ?2. Do you purchase this in cash/finance from Sundram Finance?3. Is the Rate of Interest is feasible provided by Sundram Finance?4. Do you know which type of finance it is?5. Is the terms and conditions by the bank are clear?6. What about paper work ?7. Is the loan facility is provided by the automobile premises or you take from other

bank

sundram car finance

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