Pay Commission effect: Banks sweeten car loan terms for govt employees

Banks have rolled out automotive financing schemes together with as much as 100% financing, decrease interest rates and processing costs

it is not most effective the automobile and two-wheeler makers who are looking to trap govt employees after a salary revision below the Seventh Pay commission. top banks- SBI, HDFC and Axis- have rolled out attractive automotive financing schemes for the federal government staff and pensioners. The highlights embrace up to one hundred per cent financing, lower rates of interest and processing prices amongst other benefits.

country’s biggest financial institution, SBI, is doing a 100 per cent financing of on highway price of automobiles for presidency staff compared to ninety per cent earlier. The bank’s interest rate for male govt staff is now 9.7 per cent and 9.sixty five per cent for female employees. this is decrease than the earlier uniform rate of 9.75 per cent. The foreclosure cost has additionally been waived.

The transfer comes after better pay packages beneath the Seventh Pay commission got here into effect in August this yr. on the grounds that then, arrears of the preceding months (on account that January 2016) have also been disbursed. There are 4.eight million crucial government workers and 5.5 million pensioners, who will benefit from the increase. automobile loans type a big chunk of the retail loan trade of banks.

prime non-public sector financial institution, HDFC financial institution, too is focused on a larger pie of latest automobile loans taken by means of govt employees. it’s providing ninety per cent on street funding choices for serving govt staff, said a financial institution spokesperson. in the past, funding used to be profile primarily based. against an past processing fee ranging from Rs 2,885 to Rs 5,150 (depending on the quantum of mortgage), a flat processing charge of Rs 599 is on supply. The rate of interest on HDFC automobile loans is 9.65 per cent. “we’re also providing credit score protect and insurance coverage funding choices along with the above,” he introduced.

Axis financial institution, which was earlier funding 85 per cent of the on street value, is now funding the entire on highway value of automobiles for presidency staff. The tenure has additionally been raised to eight years from seven previous. It has also sweetened the rate of interest to 9.ninety seven per cent from a range of 9.99 to 10.25 per cent earlier. It has also brought down the foreclosures fees.

top automotive makers have also introduced sops for government staff in recent months. Hyundai is giving advantages of Rs 7,000 on the Grand i10 and Xcent and Rs 5,000 every on the i10 and the Eon, along with the other promotional offers for important executive staff. Tata Motors introduced a scheme for vital and state executive workers, offering them advantages corresponding to more cash reductions or the choice to buy extended guarantee coverage, annual repairs programs as well as accessories on the acquisition car. Two-wheeler majors, together with Hero MotoCorp and Honda are also offering exclusive reductions and bargains to government staff and pensioners to extend gross sales.

Ajay Modi