A

PROJECT REPORT ON
“COMPARATIVE STUDY OF CAR LOAN”
AT
AKSHAY KIA MOTORS
SUBMITTED BY
AMOL SHESHRAO GAJBHARE
UNDER THE GUIDANCE OF
PROF. NANDINI PHATAK
SUBMITTED TO
SAVITRIBAI PHULE PUNE UNIVERSITY
IN PARTIAL FULFILLMENT OF BACHERLOR OF
BUSINESS ADMINISTRATION
2020 – 2021
THROUGH
ABHINAV COLLEGE OF COMPUTER SCIENCE AND
MANAGEMENT
PUNE
 ACKNOWLEDGEMENT

This project bears the imprint of many people and has been made
possible through direct and indirect co-operation of people I worked
with during my internship program at “Akshay Kia” for whom I wish
to express my appreciation and gratitude.

I am particularly grateful to express my special thanks and gratitude to

my teacher and guide, Prof. Nandini Phatak for her encouragement
and support that she provided during the preparation of this project.

Special thanks to “Akshay Kia” and the finance manager Mr.

Gautam Mankar for investing their valuable time for making me
understand the client acquisition and conversion of company and
providing me with the valuable information regarding the work
culture at the workshop.

I would also like to mention a deep sense of gratitude to my family

members and friends, without the support of whom I could not have
been able to complete this work.

AMOL GAJBHARE
 CERTIFICATE

This is to certify that academic goal title of project report on

“COMPARATIVE STUDY OF CAR LOAN” is a confide work which is
successfully carried out by MR. AMOL SHESHRAO GAJBHARE, SY
BBA(FINANCE) for the partial fulfillment of BBA Degree from
SAVITRIBAI PHULE PUNE UNIVERSITY. He has worked out under
guidance and direction. His work is found to be satisfactory and complete in
all aspects of the project.

(PRINCIPAL) (EXTERNAL
EXAMINAR)

(HEAD OF THE DEPARTMENT) (INTERNAL

EXAMINER)

SEAT NO.: PLACE:

DATE:

DECLARATION
I, the undersigned, hereby declare that the project work entitled
“COMPARATIVE STUDY OF CAR LOAN” submitted to
Savitribai Phule Pune University is the record on an original work
done by me for the partial fulfillment of BACHELOR OF
BUSINESS ADMINISTRATION under the guidance of Prof.
Nandini Phatak.
Conclusions drawn here are based on the material collected by me.

Place: Pune

Class: SY BBA

Semester: III

Date:

AMOL GAJBHARE
TABLE OF CONTENT

Sr. No. Title Page No.

1 Introduction to Loan 1
1.1 Introduction to Car Loan 2
2 Scope and Objective 4
3 Literature Review 5
4 Research Methodology 6
5 Company Profile 7
5.1 Akshay Kia Loan 8
6 Theoretical Background: 11
Major Players of Car Loan –
6.1 SBI Bank
6.2 PNB
6.3 ICICI Bank
6.4 HDFC Bank
7 Kia car segment: 31
Pricing of Kia cars in Jalgaon city
8 Data Analysis on Car Loan 35
8.1 Data Analysis and Interpretation on 39
the basis of Questionnaire
8.2 Customer FAQs 41
9 Conclusion 43
10 Suggestions and Recommendations 44
11 Bibliography 45
 1. INTRODUCTION TO LOAN

Banks have variety of schemes under Personal Finance to satisfy varying

needs of the banking public. Banks provide credit in the form of overdraft or
loans. Overdraft facility is generally provided on current account. Overdraft
is a service provided by a bank to utilize money even when there is no
balance in the customer’s account. It is a form of credit and one has to pay
interest for the overdraft drawn. It is an arrangement made to cover the cash
shortages. The rates differ from bank to bank and depend on the time period
also. It is not suitable for long period of time. Bank loan is the money which
one borrows from the bank for a specific purpose for specific period with
agreement for interest and repayment periods etc.
Types of Loans:
Following are some of the popular loan schemes offered by banks:

1. Housing Loans: Loan is given for the purchase of land and

constructions of house on the same. The rates of interest to be
charged depends on two factors firstly the amount of loan and
secondly the time period for which the loan is required. The rate of
interest may be fixed or fluctuating. In case of fixed rate of interest,
the interest rate remains the fixed throughout the period of loan in
spite of the fact that the current rate of interest may be different the
rate at which the loan was obtained. In case of fluctuating rate of
interest, the rate of interest changes according to the current rate in
the market.
2. Personal Loan: Finance is provided to meet out all personal needs
like renovating the house, purchasing a computer, marriage or
medical expenses etc.
3. Travel Loan: Finance is provided to meet out the travel cost of the
customers either domestic or for international visits.
4. Car Loan/Vehicle Loan: Finance is provided for purchase of car or
other vehicles either for personal or business purposes.
5. Education Loan: Finance is provided to meet out the education
cost of children of the customers.

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 6. Festival Loans: Finance is also given to meet out the festival
expenses.

1.1 CAR LOAN

A car loan is an amount of money taken from a lending provider to purchase
a new or used car. The individuals agree to repay the total amount of the loan
along with the lending interest rate amount to the lender (often banks) as and
when required.

Individuals can choose a car from a list of models and manufacturers in India
according to their annual income and budget. Presently, a common man can
fulfill his dreams of purchasing a car by getting an auto loan. According to
your requirements and financial situations, you can get auto loans from a
variety of auto financing services such as Mahindra Finance, Tata Finance,
Bajaj Finance, ICICI Loans, State Bank of India loans, etc.

For example, if you are thinking about financing options with ICICI, you
must first give your information regarding the type of loan to the bank. The
ICICI bank associates will then get in touch with you to assist with the loan
eligibility amount and the different offers and schemes available with their
bank.

These days, almost everyone has the desire to buy a car which best suits them
according to their requirements.

Types of Car Loan:

There are several different types of auto loans so that every individual will
find at least one auto loan that is able to meet their requirements.
New Car Loan:

A new car loan is taken out to purchase new vehicles generally from
dealerships. As citizens of India are getting higher pay packages, many
salaried and selfemployed individuals are looking to get their dream car.

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Many individuals have the cash in hand and they prefer to purchase a new car
on the spot. This however does not apply to the majority of those falling
under this category. Most people will contact banks for information about
their auto loans and look to proceed from there.

There are many banks which provide new car loans with low car loan rates in
India. As the financial market fluctuates in India, there may be an increase in
the lending interest rate for new car loans. Because of this situation, be
careful when it comes to getting an auto loan and plan according to your
financial situations and position.
Used car Loan:

Used car loans are taken by the borrower to purchase a used car from either a
second-hand car dealer or an individual seller. There are a number of lending
institutions which provide used car loans in India. Before going for a car
loan, check the various offers and schemes from Bajaj Finance and other
providers.

Sometimes people can’t afford to buy a new car and, in such cases, going for
a used car is the best option. The amount of money that you can afford per
month should also be taken into consideration in order to take the right
decision for auto loans from top banks and lenders such as ICICI, AXIS,
HDFC, SBI, Bank of Baroda and Bajaj Finance.

To get used car loans, banks usually charge a high lending interest rate. It’s
always good to check with banks about the lending interest rate because
buying a used car in India will definitely be cheaper than purchasing a new
car. The depreciation of used cars is always less than that of a new car. In
most cases the owner of a car will apply for auto insurance for the used car
and the cost of insurance will be lower.
2. SCOPE AND OBJECTIVE

Scope:

The scope of this project report is based on the perception of the relevant
customers towards car loan which is limited to Jalgaon city. The study helps
to understand the comparison between private & public sector banks and how

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much the parameters can influence the customer in their decision of applying
car loan.

• It helps us in gaining independent knowledge about customer

perception towards car loan.
• It helps in evaluating the effects of several parameters while choosing a
car financing company.
• It can provide prospective information to potential customers.

Objectives:

• Understand the customer’s preference of banks for car loans.

• Identify the major government and private car financing banks.
• Study the problems faced by the customers in availing car loans .

3. LITERATURE REVIEW

Kritika Anuragi, Akshay Raj, Smriti Bajpai, “Analysis of Kia Motors’ Booming Market
Penetration amidst Downturn of India’s Automobile Industry", IJRAR - International Journal
of Research and Analytical Reviews (IJRAR):

The Indian automobile industry is among the largest industries in the country
and ranks fifth on a global scale. The industry has been undergoing a speedy
transformation with new changes surfacing every day. In this perennially
evolving industry, every company strives to offer products that appeal to a
broad spectrum of customers. In view of this, the target segment of each
brand often overlaps with its competitors. Consequently, companies often
lose fractions of their market share to more competent companies with ever-
changing customer inclination. From the onset of 2019, the industry
dynamics were influenced by a series of external factors such as policy
changes, increased taxes, higher interest rates, fuel price hikes and legal
rulings that impacted the customers’ buying behaviours and delayed their

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purchase decisions. As a result, a reduced number of people are investing in
automobiles pushing the industry towards a slowdown. In the thick of this
downturn, Kia Motors ventured into the industry with Kia Seltos. It managed
to have explosive sales with the launch and was able to sustain these
numbers. In November, Kia recorded 14,005 deliveries, which is even higher
than the sales figures of its rival product Hyundai Creta which recorded
10487 deliveries in January and the numbers have been declining ever since
hitting a lowest of 635 deliveries. Other leading brands in the mix exhibited
similar trends as Hyundai. This research investigates and analyses the factors
that were catalytic to Kia’s successful entry and Kia’s rise to being one of the
top five carmakers of India dominating the Mid-SUV segment.
4. RESEARCH METHODOLOGY

Research is a common way to generate information from primary sources can

also define research as scientific & diplomatic search for pertinent
information on specific topic.
It is the systematic, collection analysis & reporting of data & finding relevant
to specific situation.
Research methodology is a frame work, a blue print or the research study
which guides the collection & analysis of data.

Collection of Data:

Primary data: A set of questions related to the research topic was

formulated. Response for each question included in the questionnaire has
been collected from the consumer. Much of data in this report has been
collected by me during my internship program.

Secondary data: Secondary data is the second-hand information that was

collected by me from magazines and websites.

Sample size:
My target population were the two public banks and two private banks.
1. State Bank of India
2. Punjab National Bank

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 3. ICICI Bank
4. HDFC Bank

5. COMPANY PROFILE

Kia India Private Limited is a subsidiary of Kia for its operations in India.
The company was founded on 19 May 2017 following an announcement of
the construction of a new 536-acre manufacturing facility in Anantapur
District, Andhra Pradesh. The plant started its trial production in January
2019 and the mass production of its first product, the Kia Seltos started on 31
July 2019. The US$2 billion manufacturing plant is capable of producing
300,000 vehicles annually.
Kia Motors India is producing several models that was developed specifically
for the Indian market, namely the SP2i version of the Seltos and the sub-4
metre SUV Sonet. The plant also manufactures the Kia Carnival exclusively
for the domestic market. Within nine months of operations, in July 2020 the
company announced that it has achieved a milestone of 100,000 vehicle sales.

Current Models in India:

• Kia Seltos (2019 – present)

• Kia Sonet (2020 – present)

• Kia Carnival (2020 – present)

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 5.1 AKSHAY KIA LOAN
Akshay Kia is the dealer of Kia in Jalgaon city active from September 2020.
At Akshay Kia, we understand the little pleasures that a car can bring to you
and your family. Hence, we process car loans for almost all three models of
Kia cars available in India. All you need to do is choose your favourite model
and we will make sure you get the funds to own it.
Features:

Financing available for all categories of vehicles across manufacturers

• Minimum loan amount that can be disbursed is Rs. 1 lakh

• Loan tenure up to 5 years
• Choice of multiple loan schemes as per your needs
• Technology driven processes
• Transparent processes with no hidden charges Advantages:

• Maximum funding at ex-showroom price

• Attractive schemes to suit your needs
• Faster sanction and disbursement of loans
• Multiple modes of repayment
• Simple documentation process
• Attractive Loan to Value (LTV) on your car
• Competitive processing charges
• Pan India branch network
• Insurance cover available at attractive rates

Eligibility Criteria

Minimum age requirement: 18 years

• Maximum age requirement: 65 years

• Any other requirements: KYCs of borrower, co-borrower and
guarantor (as per RBI guidelines)

Documentation

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Basic documents required to process loan for various individuals are as
follows:

1. Documents for salaried individual:

• Passport size photographs
• ID proofs – Aadhar card, Pan card
• Income proof – Pay slip of past 3 months
• 6 months bank statement
• Form 16
• Residence’s electricity bill copy
2. For self-employed individual / person belonging to business class:
• Passport size photographs
• ID proofs – Aadhar card, Pan card
• Business registration certificate
• ITR of two or three previous assessment years
• Trading a/c, P&L a/c, Balance sheets of three years
• Details of partners (if any)
• Residence’s electricity bill copy
3. Agricultural class individual:
• Passport size photographs
• ID proofs – Aadhar card, Pan card
• 7/12 extract document
• ITR of two or three previous years
• Residence’s electricity bill copy

Process

➢ Know Your Customer (KYC) ➢ Application form

➢ Filling of required documents
➢ Log in
➢ Pre screening
➢ Data entry
➢ Check CIBIL
➢ Field investigation
➢ Approval/Non approval of loan
➢ Disbursement of file

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➢ Sending to main office

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 6. THEORETICAL BACKGROUND

Major Players of Car Loan:

6.1 SBI BANK

To avail an SBI Car Loan, you should be:

• Individual 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. 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.
• Gross Annual Income –
a) Salaried: Net Annual Income of applicant and/or co-applicant if any,
together should be Rs. 3, 00,000/-
b) Self-employed professionals and Proprietary / Partnership Firms: Net
Profit or Gross Taxable income of Rs. 4,00,000/- p.a. (income of
coapplicant can be clubbed together)
c) Agricultural: Net Annual income of applicant and/or co applicant
together to be Rs. 4, 00,000/-

Salient Features:

Loan Amount

There is no upper limit for the amount of a car loan. A maximum loan
amount of 2.5 times the net annual income can be sanctioned. If married,
your spouse's income could also be considered provided the spouse becomes
a co-borrower in the loan. The loan amount includes finance for one-time
road tax, registration and insurance.

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No ceiling on the loan amount for new cars.
Loan amount for used car is subject to a maximum limit of Rs. 15 lakhs.

For Salaried: The maximum loan amount is 48 times of the Net Monthly
Income.

For Self-employed, professionals and Proprietary/Partnership Firms: Up

to 4 times Net Profit or Gross Taxable income as per ITR after adding back
depreciation and repayment of all existing loans.
For Agriculturist: Up to 3 times of Net Annual Income.
Types of Loan:

1. Term Loan

2. Overdraft – a) For New vehicles only

b) Minimum loan amount: Rs. 3 Lakhs

Documents required:

Need to submit the following documents along with the completed

application form if you are an existing SBI account holder: -

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 /voter 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.

If you are not an account holder with SBI you would also need to furnish
documents that establish your identity and give proof of residence.

Margin:

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New / Used vehicles: 15% of the on the road price.

Repayment:

You enjoy the longest repayment period in the industry with us.

Repayment period:

For Salaried: Maximum of 84 months

For Self-employed & Professionals: Maximum 60 months
Repayment period for used vehicles: Up to 84 months from the date of
original purchase of the vehicle (subject to maximum tenure as above).

Prepayment Penalty: Prepayment fee of 2% of the amount of the loan

prepaid will be levied subject to certain conditions.
Attractive Features

1. Interest Rate From 7.5%

2. Present EMI For a period of 5 years

3. Processing fee Min. Rs. 500/- to max.

Rs. 3750/- per
application

4. Prepayment Penalty Not chargeable

5. Other charges No such charges

6. Margin 15% of on road price

7. Maximum period of the 7 years

loan

8. Any advance EMI NIL

recovery

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 6.2 ICICI BANK

CAR LOAN OVERVIEW

Turn your dream into reality. Own that new car you have always desired,
with a little help from us. We offer car loans up to 90% of the ex-showroom
price of the car. Our interest rates would pleasantly surprise you. What's
more, you can take up to 7 years to repay the loan.
Pick choice of Car Loan.

• Loan on the Strength of Your Income: Submit income proofs as

required and avail finance up to 90% of the ex-showroom price of the
car.
• Car Loans with Fixed Interest Rates: ICICI Bank offers new car loans
with fixed rate option only.
Car Loan Eligibility Criteria:
Particulars Salaried Self- Partnership Private /
Employed Firm Public Ltd
Co

Age Criteria The applicant Any - Limited

should be proprietor, companies
above 25 partner, should have
years old at professional been in
the time of or director existence for
application, above 28 at least 3
and upto 58 years but years.
years of age below 65
at the time of years at the
maturity of time of the
the loan. loan
maturity.
Income Gross annual Gross annual Firm should Minimum
Criteria income of at income of at have a PAT (profit
least Rs. 2.50 least Rs. 2.00 minimum after tax) of
lakhs lakhs PAT (profit Rs. 2.00
after tax) of lakhs

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 Business
Rs. 2.00 income as
lakhs per ITR or
Business Profit as per
income as per P/L.
ITR or Profit
as per P/L.
Stability The total Current Current -
employment business business
stability stability stability
should be should be 2 should be 2
more than 2 years or total years or total
years and more than 3 more than 3
current years years.
employment
stability of
minimum 1
year.

Car Loan Interest Rate

ICICI Bank offers new car loans with fixed interest rate. In fixed interest rate,
the interest rate on the car loan will remain fixed during the tenure of the
loan.

• New Car: 8.00% to 15.00% depending on the segment of vehicle and

tenure selected.
• Pre-Owned Car: 13.75% to 17.00% depending on the segment of
vehicle.
Special interest rate applicable to the customer would be depend on segment,
asset category and location. Stamp duty charge shall be extra as applicable
additional documentation charges of Rs.350/- applicable ICICI Bank reserves
the right to revise the rate of interest and processing fee from time to time at
its sole discretion.

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Factors Affecting Car Loan Amount:

Car Loans from ICICI Bank are extremely convenient, flexible and quick.
With more than 700 channel partners in over 1200 locations, we reach out to
millions of customers and help them realize their dream of possessing a car.

The minimum loan amount for taking a new car loan is Rs. 1, 00,000. The
maximum loan amount will depend upon the price of the car, model variant,
profile of the customer, etc.
We finance up to 90% of the ex-showroom price of the car.

The Loan amount also depends on the car model. Higher loan amounts are
available under specific enhanced income eligibility criteria.

Service Charges

• If you are looking for flexible schemes, quick processing of your loans,

attractive interest rates at the click of a mouse, then your search ends

here. ICICI Bank Car Loans is the most preferred financier for car loans

in the country and offers you all the above with unbelievable ease.

• ICICI car loan interest charges differ according to the car model, the
tenure

of the loan, the customer and his location.

Description of Charges Car Loans

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Non-Refundable Loan Processing Fees and Gross Loan Processing Documentation
Documentation Charges
Amt Fee Amt Charges

<2.5L Rs. 2500/- Rs. 350/-

2.5L to 3.9L Rs. 3500/- Rs. 350/-

4L to 4.9L Rs. 4000/- Rs. 350/-

5L to 9.9L Rs. 4200/- Rs.350/-

>10L Rs. 5000/- Rs. 350/-

Stamp Duty Actual

Prepayment options Part Prepayment of the loan is not allowed

Prepayment Charges Lower of the two amounts given below.

1. 5% of principal outstanding or

2. Interest outstanding for unexpired period of

Charges for late payment (loans) 2% per month on the outstanding installment

Cheque Swap Charges Rs, 500/- per transaction

Cheque Return Charges Rs. 400/- per return

Amortization Schedule Charges Rs. 200/- per schedule

Statement of Account Charges Rs. 200/- per statement

Prepayment Statement Charges Rs. 100/- per statement

Duplicate NOC Charges Rs. 500/- per NOC

NOC for conversion from Petrol to LPG/CNG Rs. 500/- per NOC

Revalidation of NOC Charges Rs. 500/- per NOC

NOC to convert from Commercial to Private Rs. 2000/- per NOC

Registration

Charges for changing from fixed to floating Not applicable

rates of interest

Charges for changing from floating to fixed 1.75% on principal outstanding

rates of interest

Documentation

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At ICICI Bank Car Loans, we offer the most convenient, flexible &quick car
loan at the click of a mouse. Keeping your convenience in mind, we ask you
for minimal mandatory documents for the sanctioning of your car loan.

Income proof:
Salaried individuals:
Latest Salary Slip and 2 years Form 16/ Income tax returns.

Self-Employed individuals:
Income Tax Returns of 2 previous financial years.

Partnership Firms, Societies & Companies:

Income Tax returns of 2 previous financial years along with complete
financial/audit report.

Documents supporting customer information:

Identity Proof, Signature Proof, Recent passport size colour photograph and
Address Proof as per ICICI Banks norms (Our representative will help you
choose suitable documents).

Other documents:
Partnership Firms: Partnership deed and Letter signed by all partners
authorising one partner to execute the required Car Loans documentation.

Societies and Companies: Resolution by Board of Directors (or such

managing body) & Memorandum & Articles of Association (or Society/Trust
deed).

Our representative will help you with the formats of documents and the
information required.

Application Process of your Car Loan:

Car Loans from ICICI Bank are extremely convenient, flexible and quick.

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Keep It Simple and Swift. That's the idea behind the easy and quick
application process of ICICI Bank Car Loans. We have multiple channels for
you to access our car loan services.

• Our representative will meet you at your convenience to assist you with
the documentation and other terms.
• The loan will be disbursed within one day of submitting all the
required post-sanction documents.
• If the vehicle is readily available with the dealer, you can get your car
as soon as the disbursal is made to the dealer. However, ICICI Bank is
in no way responsible for car deliveries as they are regulated by the car
manufacturer's delivery schedules.
• You can retain the original Registration Certificate, Invoice and the
Insurance Policy. We simply require a photocopy of these documents
within 30 days of getting your loan disbursement.
• If you wish to cancel your loan application any time before the loan is
disbursed, you may do so by informing the representative who has
collected your documents or send us a written request.
• You may contact the nearest ICICI Bank branch for the best deal
available on the car of your choice. We have an extensive network of
associates offering our loan products too.

Repayment Terms of your Car Loan:

ICICI Bank Car Loans offers flexible schemes, attractive interest rates, and
quick & hassle-free application process at the click of a mouse. At the same
time, we ensure that the repayment terms are equally convenient for you.
ICICI Bank offers new car loans with fixed interest rate. In Fixed interest
rate, the interest rate on the car loan will remain fixed during the tenure of the
loan.

• Repayment tenure ranges from 1 year to 7 years for new car loans.

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 • You may change the tenure of the loan before the loan is disbursed.

The interest rate & EMI would change accordingly.

• The repayment due dates for the loan are 1st and 15thof every month

and would depend on the date of disbursement. Payment due dates

cannot be

changed.

• You can make the Payments through post-dated cheques (PDCs)

• Repayment option through Direct Debit Mandates is also available for

all

ICICI Bank account holders.

• Option of repaying through ECS is also available in select cities.

• Payments through cash or credit cards are not accepted.

• You may change the PDC's in case your Bank Account is changed .

However, we would require verification of signatures by new banker.

A nominal fee of Rs.500/- (Swap Charges) would be charged for

exchange of cheques.

• A full pre-payment of the loan is accepted. Part pre-payment is not

allowed.

Note: All charges are subject to Service Tax as applicable.

EMI Calculation Made Easy

We, at ICICI Bank Car Loans, strive to assist you in every possible way at
every step. We have provided some useful tools below that will help you in
deciding your Car Loan.

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Fixed Interest Rate Loan EMI Calculator

Under the Fixed Interest Rate option for Car Loan the interest rate for your
loan will remain constant throughout the tenure of the loan. The contracted
instalment amount and interest rate will be applicable for the full tenure of
the loan.

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 6.3 PNB BANK

Car Finance:

Available for purchase of New Car/ Van/ Jeep/ Multi Utility Vehicle (MUV)/
Sports Utility Vehicle (SUV) or for old vehicles that are not older than 3
years (Depreciation @ 15% p.a. on current invoice / showroom invoice).
Finance will be provided for purchase of vehicle of indigenous/ foreign
makes.
Eligibility:

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

Minimum net monthly salary / pension / income – 20000/-. Income of spouse
/Parent can be added.
Amount of Loan:

For Individuals / Proprietorship Concerns: 25 times of the monthly net

salary OR Rs.25 lakh (for one or more vehicles), whichever is lower. Income
of parent(s) / spouse can be taken into account for determining loan amount.
In such cases, the parent(s)/ spouse shall stand as additional guarantor.

For Business Concerns (Corporate or non-corporate): No ceiling on loan

amount (for one or more vehicles).
Margin

• For New Vehicles: 15%

• For Old Vehicles: 30%
• Under Tie-up Arrangement: 10%

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 / Collateral Security:

1. Third party guarantee / collateral security is waived in following cases:

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 • Permanent Employees of Central Govt. /State Govt. /PSUs/ MNCs/
Listed Companies at NSE/ BSE whose shares are actively traded and
quoted above par.
• For other than salaried class borrowers where ex – showroom cost of
the car is exceeding Rs.6 lakh.
2. However, the Guarantee of Parent(s) / Spouse will be taken in case their
income has been considered for determining loan amount.

Rate of Interest:
BPLR System Base rate system
Less than 3 year 3 years and above Less than 3 years 3 years and above

10.50% 11% BR+1% BR+1.5%

Car loan was fixed rate loan. new car loan will be floating i.e. to be changed
with change in BR. The old car loans will be mandatorily migrated to base
rate system on the reset date.
@@ Base Rate+0.50% to individual borrowers where PNB Score is 60 &
above During Festival Bonanza interest @ BR +0.40 i.e., 10.65 % (Fixed)
with reset clause of 3 years.

Repayment
• For New Vehicle: The loan amount together with interest is to be
repaid maximum in 84 Equated Monthly Instalments (EMIs).
• For Old Vehicle: The loan amount together with interest is to be
repaid maximum in 60 Equated Monthly Instalments (EMIs)

Upfront Fee & Documentation Charges

• 1% of the loan amount, with a maximum of Rs.6,000/- (exclusive of
service tax & education cess)

22
Disbursement:

The intending borrower will be required to settle the transaction for purchase
of vehicle needed by him/her with the seller and will be required to deposit
the difference of the cost of the vehicle to amount of loan, and thereafter, the
advance will be allowed to him/her from the bank by paying the entire price
of the vehicle to the seller directly on behalf of the borrower.

23
 6.4 HDFC BANK

Car Loan Overview:

Our Car Loan offers a convenient car buying experience with faster approval
and doorstep service. We offer Car Loans for the entire range of private cars
and multi-utility vehicles. Drive home in your dream car with an HDFC
Bank Car Loan, one of the leading car finance providers in India.

Features:
• Loan disbursal in 2 days
• Fixed interest rate and No Income Document Scheme
• Up to 100% funding and 0.5% lower rate.
• Up to 7 years tenure

Benefits:
• Fast and hassle-free loan processing
• Stability in EMI repayment, not affected by fluctuating market rates
• Lowest down payment and best deals for customers
• Lower EMI

Reason to take New Car Loan from HDFC Bank

Whatever be your need, we have a loan for you. Over the years we have won
the trust of our customers and have become market leader in loan products.

Enjoy triple benefits when you take a New Car Loan from HDFC Bank:
• Faster loan - Our loan sanction and disbursal are one of the quickest
with easy documentation and doorstep service.
• Competitive pricing – Our loan rates and charges are very attractive
• Transparency – Complete clarity on loan process and No hidden
charges. Update on status of loan application at each stage.

HDFC Bank only offers the transparency of Fixed Reducing Rate of Interest
(No Floating Rates)

24
Test-driving and choosing from the ample options available to purchase a
new car can be a lot of fun. But car financing isn't! Thus, HDFC Bank
simplifies and quickens the car financing process so that you don’t waste time
on any paperwork. Be it a small car, family car or sheer luxury on wheels!
Just select your preferred make and model as per your budget and
requirement and HDFC Bank’s New Car Loan will bring it to your driveway
in no time.

Some exclusive features and benefits with your HDFC Bank New Car Loan:
• Our loans cover the widest range of cars and multi-utility vehicles in
India.

• You can avail up to 100% finance on your favourite car

• We offer a flexible loan repayment tenure ranging from 12 to 84

months.

• You can borrow up to 3 - 6 times your annual income

• We provide speedy processing - within 48 hours of documentation

• You can repay with easy EMIs

• You can FastTrack your loan by simply choosing the plan that is right

for you.

• We offer attractive interest rates

• Our documentation is hassle-free

• We offer special privileges for HDFC Bank customers

• Max Loan limit Rs. 1.5 Cr

Mechanism To Get Loan:

Check which category you fill into first. Depending on the kind of work you
do, our requirements to give you a loan will be different.

25
About a salaried employee:
This category includes salaried doctors, CAs, employees of select public and
private limited companies, government sector employees such as public
sector undertakings and central, state and local bodies.
• Minimum age for Salaried is 21 years (at time of loan application) and
<=60 (at the end of the loan tenure)
• Have had a job for at least 2 years, and a minimum of 1 year with your
current employer
• Earn at least an income of Rs. 1,80,000 annually, including the income
of your spouse/Co-applicant.
• Have a tele-phone/ post-paid mobile

About a self-employed individual (Sole Proprietorship)

This category includes self-employed sole proprietors in the business of
manufacturing, trading or services.
• Minimum age for Self Employed is 21 years (at the time of loan

application) and <=65 (at the end of the loan tenure)

• Be in business for at least 2 years

• Earn at least Rs. 60,000 per annum if you are looking to buy a standard

car and at least Rs. 1,00,000 per annum for mid-sized and premium

cars. • Have a telephone at residence / Post Paid mobile connection

About self-employed (Partnership Firms)

This category includes self-employed partners in the business of
manufacturing, trading or services.
• Earn at least Rs. 60,000 per annum if you are looking to buy a standard

car and at least Rs. 1,50,000 lakh p.a. for car loan • Have a minimum

turnover of Rs. 4,50,000 per annum

26
 • Have a landline at your office and residence.

About self-employed (Private Limited Companies)

Own a private company in the business of manufacturing, trading or services
• Earn at least Rs. 60,000 per annum if you are looking to buy a standard

car and at least Rs. 1,50,000 per annum for mid-sized and premium

cars

• Have a minimum turnover of Rs. 4,50,000 per annum

• Have a landline at office

Documents:
• Proof of Identity: NA
• Income Proof: Audited balance sheet, Profit & Loss Account for latest
two years and the latest 2 years IT returns of the company
• Address Proof: Telephone Bill/Electricity Bill/Shop & Establishment
Act certificate/SSI registered certificate/Sales Tax certificate
• Bank Statement: Last 6 months

About self-employed (Public Limited Companies)

A director in a public limited company in the business of manufacturing,
trading or services
• Earning at least Rs. 60,000 per annum, to buy a standard car and at
least Rs. 1,50,000 per annum for mid-sized and premium cars
• Have a minimum turnover of Rs. 4,50,000 per annum
• Have a landline at office

Documents:
• Proof of Identity: NA
• Income Proof: Audited balance sheet, Profit & Loss Account for latest
two years
• Address Proof: Telephone Bill/Electricity Bill/Shop & Establishment
Act certificate/SSI registered certificate/Sales Tax certificate
• Bank Statement: Last 6 months

27
Fees & Charges
New Car Loans
Description of charges
FC Charges No foreclosure allowed within 6
months from date of availing the car
loan
6% of Principal Outstanding for
preclosures within 1 year from 7st
EMI
5% of Principal Outstanding for
preclosures within 13-24 months
from 1st EMI
3% of Principal Outstanding for
preclosures post 24 months from 1st
EMI
Pre-Payment Charges (pre-payment 5 % on the part payment amount in
is allowed only once a year) case part prepayment is within 13-24
months from 1st EMI
3% on the part payment amount in
case part prepayment is post 24
months from 1st EMI
Part-payment is allowed subject to
completion of 12 months (i.e., Post
payment of 12 EMIs)
Part payment will be allowed twice
only
At any point of time, part payment
will not increase beyond 25% of
Principal Outstanding
Stamp Duty At actual
Late Payment Penalty 2% per month
Processing fees Up to 2.5 Lakhs: Rs. 2825/-
Over Rs. 2.51 Lakhs up to 4 Lakhs:
Rs. 3850/-

28
 Over Rs. 4.01 Lakhs to 5 Lakhs: Rs.
4300/-
Over Rs. 5.01 Lakhs up to 10 Lakhs:
Rs. 4650/-
10 Lakhs plus: Rs. 5150/-
Cheque swapping charges NIL
Loan cancellation / re-booking In the event of cancellation, interest
Charges charges from disbursement date till
refund of disbursement amount will
be borne by the customer
Legal, Repossession & Incidental At actual
Charges
Duplicate no due certificate / NOC NIL
Loan Rescheduling charges Rs. 1000/-
Special NOC NIL
CIBIL Charges (only on request) Rs. 50/-
Cheque/ ECS Return Charges Rs. 450/-
Rack interest rate 11.50% to 13.75% depending on the
segment of vehicle

7. KIA CAR SEGMENT AND FUNDING RANGE:

Presently, the Kia cars available in India are only in the SUV segment with
only 3 models.

Model Ex-Showroom Value Funding (%)

(In lakhs)
Sonet 6.79-13.20 70-100
Seltos 9.89-17.65 60-90
Carnival 24.95-33.95 60-85

29
 ✓ Funding range is indicative. Pre-approved customers could get up to
100% ex-showroom funding on Kia Seltos as well.

Pricing of Kia Sonet in Jalgaon:

Trim Ex-Showroom On road Price

Description Price (Rs.) (Rs.)
1.2 THE 679000 853343
PETROL 1.2 HTK 769000 955856
1.2 HTK+ 855000 1053812

1.0 HTK+IMT 949000 1156255

1.0 HTK+DCT 1049000 1288597
1.0 HTX+IMT 999000 1213143
1.0 GTX+IMT 1199000 1461915
1.0 HTX+IMT 1175000 1434185
PETROL Dual Tone
1.0 GTX+IMT 1209000 1473469
Dual Tone
1.0 GTX+7DCT 1289000 1565905
1.0 GTX+7DCT 1299000 1577460
Dual Tone

1.5 THE 825000 1038173

1.5 HTK 919000 1147159
1.5 HTK+ 969000 1205130
1.5 HTK+ AT 1059000 1328224
1.5 HTX 1019000 1281139
1.5 HTX+ 1195000 1476542
DIESEL 1.5 GTX+ 1219000 1516564
1.5 HTX+ Dual 1195000 1488313
Tone
1.5 GTX+ Dual 1229000 1528336
Tone
1.5 GTX+AT 1309000 1622506

30
 1.5 GTX+AT 1319000 1634277
Dual Tone

Pricing of Kia Seltos in Jalgaon:

Trim Ex-Showroom On-road Price

Description Price (Rs.) (Rs.)
1.5 THE 989000 1223327
1.5 HTK 1059000 1313877
Tech Line Petrol
1.5 HTK+ 1169000 1441314
1.5 HTX 1345000 1641813
1.5 HTX CVT 1445000 1757665

1.4T GTX 1545000 1896687

1.4T GTX+ 1649000 1994002
GT Line Petrol
1.4T GTX+ Two 1669000 2016600
Tone
1.4T GTX+DCT 1729000 2086683
1.4T GTX+DCT 1749000 2109281
Two Tone

1.5 THE 1035000 1311276

1.5 HTK 1169000 1468617
1.5 HTK+ 1279000 1598298
1.5 HTK+ AT 1379000 1716189
Tech Line Diesel 1.5 HTX 1455000 1802387
1.5 HTX+ 1559000 1924994
1.5 HTX+ Two 1579000 1948000
Tone
1.5 HTX+ AT 1659000 2042886

31
 1.5 HTX+ AT 1679000 2065892
Two Tone
1.5 GTX+ AT 1745000 2144273
1.5 GTX+ AT 1765000 2167279
Two Tone

Seltos HTX 1.5 1386000 1693346

Petrol AE
Anniversary Seltos HTX IVT 1486000 1809197
Edition 1.5 Petrol AE
Seltos HTX 1.5 1496000 1854757
Diesel AE

Pricing of Kia Carnival in Jalgaon:

Trim Description
Ex-Showroom On-road Price
Price (Rs.) (Rs.)
Carnival D2.2 2495000 3204694
8AT PREMIUM 7
Carnival D2.2 2515000 3228789
8AT PREMIUM 8
Kia Carnival
Carnival D2.2 2895000 3689191
8AT PRESTIGE 7
Carnival D2.2 2995000 3810339
8AT PRESTIGE 9
Carnival D2.2 339500 4330343
8AT Limousine 7

Finance Banks in Jalgaon City

Public Banks -
1. State Bank of India
2. Punjab National Bank

32
 3. Bank of Baroda
4. Bank of Maharashtra
5. Central bank of India
6. Bank of India
7. Union Bank of India

Private Banks -
1. ICICI
2. IDBI Bank
3. HDFC Bank
4. AXIS Bank
5. Kotak Mahindra finance
6. Jalgaon Janta Sah. Bank Ltd.

8. DATA ANALYSIS ON CAR LOAN

The analysis was made on the basis of Loan amount, various schemes,
repayment period, and interest rate EMI’s.

Different LTV (Loan To Value) of the Banks

Sr. No. Bank Loan Amount

1 SBI 85%
2 ICICI 90%
3 PNB 80%
4 HDFC 100%

33
LOAN

LOAN AMOUNT PERCENTAGE

120%

100%
80%
Loan Amout

60%
40%

20%

0%
SBI
PNB ICICI
HDFC

Banks

Interest Rate:
Interest rate of these banks vary accordingly. They try to provide minimum
interest rate so that maximum number of customers can get advantage of the
facility.

Sr. No. Bank Average Interest

Rate
1 SBI 8.50%
2 PNB 9.25%
3 ICICI 9.50%
4 HDFC 9.20%

34
 INTEREST RATE
10.00%

9.00%

8.00%

7.00%

6.00%

5.00%

4.00%

3.00%

2.00%

1.00%

0.00%
SBI PNB ICICI HDFC

For Used Car

Interest rates for used cars by these banks are as follows.

Sr. No. Bank Interest Rate

SBI 17.25% (Upto 36
Months)
17.50% (Above 36
months)
PNB 16% (24 months),
16.50% - 17% (48
months)
ICICI 13.75%-17%

35
 HDFC 15.25% 17.75%
(60 months),
15.25% - 17.75%
(48 months),
15.25% - 17.75%
(36 months),
15.75% - 18.25%
(24 months),
15.75% - 18.25%
(Upto 12 months)

Repayment Period:
The period of time in which the loan should be repaid.

Sr. No. Bank Minimum Maximum

(Months) (Months)
1 SBI 12 84
2 PNB 12 84
3 ICICI 12 84
4 HDFC 36 84

90

80

70

60

50

40

30

20

10

0
SBI PNB ICICI HDFC

Min. Months Max. Months

36
Processing fees & Charges:

Sr. No. Bank Procession fee

1 SBI 0.51% of the
loan amount
2 PNB 1% of the loan amount
3 ICICI 2500 to 5000
4 HDFC 2825 to 5150

8.1 Data Analysis On The Basis of Questionnaire

The survey was conducted during my internship period in Akshay Kia,
Jalgaon.

1. How much loan tenure do you wish to have?

a) 2 years
b) 3 years
c) 5 years
d) 7 years

37
 Percentage of Customers
7%
15%

23%

55%

2 Years 3 Years 5 Years 7 Years

INTERPRETATION:
The data analysis from the obtained information shows that the loan tenure
preferred by customers is mostly of 5 years i.e., 55% of the customers,
because majority of people in Jalgaon city belong to middle class working
family.
Meanwhile 23% customers prefer a tenure of 3 years, 15% customers prefer a
tenure of 7 years, and the rest 7% prefer a 2-year tenure.

2. Do you have any current loan in process?

a) Yes
b) No

38
 Percentage of Customers

NO
30%

YES
70%

YES NO

INTERPRETATION:

Majority of customers have another loan running mostly house loans,

whereas very few customers have all the previous loans cleared.
8.2 CUSTOMER FAQs

Following are some of the FAQs asked by the customers and the answers
given by our finance manager during my internship program.

1. Do I need a loan guarantor or co-borrower?

A loan guarantor or a co-borrower is only required if you are unable to meet the
eligibility criteria stated by the lending institution such as monthly income, age or
credit score. Otherwise, you can apply for a car loan on your own.

2. In which cases can my car loan application be rejected?

Your loan application may be rejected if you have a bad credit score (CIBIL),
have defaulted on your repayments or applied for and been rejected for loans
multiple times, etc. Also, you should meet the bank’s eligibility criteria such

39
as minimum income level, age, previous relationship with the bank, etc. to
get your loan approved.

3. Are there any tax benefits of a car loan?

No. Unlike a home loan, a car loan has no tax savings benefits what so ever.
Therefore, car loan amounts should always be tied to your actual requirement
and splurging on a fancy car by taking a large loan amount is not a good idea.

4. Can interest rates be negotiated?

Yes, you can negotiate the interest rate applicable to your car loan by
leveraging your credit history and prior relationship with the prospective
lender. The regular payment of EMIs for previous loan/credit cards you
had/have with your prospective lender can fetch you a car loan at a preferred
(lower) interest rate.

5. Can I pre-pay my car loan?

Pre-payment of car loans is allowed by many lenders however there are
usually a few terms and conditions attached. For starters, the lenders only
allow car loan repayment after you have completed specified loan tenure and
there is usually a pre-payment penalty as well. The prepayment penalty
charges usually range from 1%-4% of the. It is recommended that you
confirm all relevant charges with a bank before you make a pre-payment .

6. Are there any special terms and conditions associated with the zero
percent financing option?

40
There are usually quite a few terms and conditions in case of zero financing
options that are not usually applicable in case of a standard car loan. For
example, the usual tenure of a zero financing loan ranges from 12 months to
15 months hence your premium payments will be much higher than that in
case of a standard car loan. Additionally, you often have to pay a much larger
down payment
amount as compared to the standard car loan, which is bound to stretch your
monthly budget.
9. CONCLUSION

• After doing the comparative study on car loan, I reached on the

conclusion that, this loan facility is very much better for customer those
who want to buy car. It provides low-interest bank car loan offers;
buying a new car has become remarkably easier and convenient today.
• In Jalgaon city many people got advantage of these facilities and many
more are getting advantage of these facilities.
• All the banks provide loan on new and old cars but the loan amount,
repayment period and interest rates are different for new and old cars.
• Requirement a customer needs to fulfil before getting loans are almost
same for all banks. The maximum amount of loan is different for
different banks. Some banks provide fixed loan amount, some decide
by calculate from the customer monthly and annual income and some
allot loan on the basis of customer repayment capacity. The interest
rate is also different for different banks. It is between 7.50% to 11.50%.
• So, my conclusion from this study of project work is that customer
those who are not much very strong in financial position can maintain
car by taking advantage of these car loan facilities and from my
comparative study the SBI provide more facilities and people give
preference to SBI bank for borrowing car loan because it provides
minimum interest rate and more schemes to customer.

41
 10. SUGGESTIONS AND RECOMMENDATIONS

• Customer awareness programme is required so that more people should

attract towards the car finance.
• If there are any kind of hidden charges than that must disclose to
customer before giving loan to them.
• There are more formalities before getting loan, all formalities taking
long processing time, my suggestion to reduce unnecessary formalities.
So that the borrower can get loan easily.
• For the better service new offers would be require.
• Agents should be trained, well educated & proper trained to convince
the people.
• Special scheme should be implemented to encourage both customer
and agents.
• Akshay Kia should more focus on retaining existing customers.

11. BIBLIOGRAPHY

Other sources:
• Guidance by Mr. Gautam Mankar, Finance Manager, Akshay Kia,
Jalgaon.

• Brochures of SBI Bank, PNB, ICICI Bank and HDFC Bank.

Websites:
www.economictimes.com

42
http://www.sbi.co.in/

http://www.pnbindia.in

http://www.icicibank.com

http://www.hdfcbank.com

43