About State Bank of India
The State Bank of India commonly referred to as SBI, along with its Associates, the State Bank of Bikaner and Jaipur, the State Bank of Patiala, etc. accounts for an estimated 60% of all banking transactions that take place across the country. The history of SBI dates back to the British Rule of India and it became a nationalized entity in the 1955 through an Act of Parliament. Due to its or its associate bank’s presence no matter what part of the country you are in, it is a household name and well recognized not just in India but also around the world. Some of the key international branches of The State Bank of India include but are not limited to those located in Sri Lanka, New York, Chicago, Los Angeles, Sydney, The Bahamas, Bahrain, Frankfurt, Toronto, London and Paris.
The diverse range of services offered by the State Bank of India to its customers includes credit card services under the SBI Cards Brand, insurance services under SBI Life and SBI General Insurance. In terms of banking services, SBI and its associates provide complete range of banking services including but not limited to savings, current, NRE/NRO accounts, international banking, rural and agri-banking and loans ranging from home loan to 2-wheeler loan.
Need for 2 Wheeler Loans
In India, two-wheelers are more than just a commuting choice; they are in many cases a necessity. Especially due to poor and mostly overcrowded public transport in most major cities, owning a two-wheeler has become a necessity for Indians. In many ways, a two-wheel transport is a greener as well as cheaper alternative to owning a car or hiring a cab in fact in some parts of India, commuting using a motorcycle or scooter is even cheaper than using public transport.
But it is not just big cities where 2 wheelers are the norm, a major chunk of 2 wheeler sales in India in fact occur in the rural areas, where narrower and roads make using a motor cycle/scooter the preferred transportation option. However, with rising prices, 2 wheelers are still an expensive proposition for certain sections of Indian society. It is for these economically weaker sections and for young individuals who are just starting out on their job that 2 wheeler loans are marketed by Banks and NBFCs across India including SBI.
Purpose of SBI 2 Wheeler Loan
State Bank of India’s 2 wheeler loan is designed to help individuals all over India purchase a new motorcycle or scooter of their choice with minimum hassle. Apart from scooter/motorcycle other 2 wheeled transport including moped and battery-operated vehicles.
The following are some of the key benefits that you can expect to receive when availing a SBI 2-Wheeler loan:
- No need to pay an advance EMI in order to avail the facility.
- Benefit of one of the lowest loan interest rates in India.
- Flexible EMI payment option on any day of the month.
- Benefit of extremely low processing fees of around 1% of loan sanctioned.
- Complimentary accidental insurance through SBI General Insurance is provided to the loan applicant.
- Option available to applicant for availing SBI Life managed life insurance scheme (discounted rates may apply).
- Flexible repayment tenure of up to 36 months or 3 years.
- As a result of the low interest rates, the applicants also benefit from the unbelievably low EMIs.
- Total loan value provided is up to 85% of the market price of the 2 wheeler in question.
- Interest applicable to the 2-wheeler loan is calculated using the daily reducing balance methodology.
- In case of salaried applicant, the loan amount sanctioned can be no more than 6 times of the Net Monthly Salary of the applicant. Net monthly salary refers to in hand income obtained by the individual after all tax deductions have been made on the applicant’s gross income.
- For self-employed individual applicants, max. 2 wheeler loan amount sanctioned equals 50% of the Annual Net Income of the individual according to the most recent tax filing made by the applicant. Net annual income refers to the amount remaining subsequent to all tax deductions made to the gross salary.
- In case the applicant derives his/her income from agriculture, the net annual income is computed by SBI on the basis of various criteria including but not limited to average income level as per demographic of the area, crop yield data, cropping pattern, total land holdings of the applicant as well as the type of agricultural activity. Some of the key types of agricultural activity accepted by SBI as capable of generating agricultural income include orchards, poultry, dairy and farming among others.
- Though not always mandatory, the bank may demand security for extending the two-wheeler loan to the applicant as per applicable rules and regulations which are subject to periodic change.
The State Bank of India is not only engaged in providing loans for the purchase of regular two wheelers but also a specialized two wheeler loan for the purchase of high performance superbikes. This is provided under SBI’s unique Super Bike Loan scheme.
Purpose of Super bike loan Scheme: The purpose of the SBI super bike loan scheme is to provide individuals with financing for new high-performance bikes with engine capacities of 500 cc or greater.
Key Features of the super bike loan: The super bike loan scheme is unique in many ways and the following are some of the key aspects of this unique scheme –
- A loan provided under this scheme can only be used for the purchase of a new super bike which features an engine capacity of 500 cc and above.
- The applicant needs to be between the ages of 21 years and 65 years in order to qualify for this scheme.
- Up to 85% of the super bike’s ex-showroom cost is covered by this loan option.
- Full time employees belonging to reputed companies, corporations, understating whether public or private are eligible for this unique scheme.
- Self-employed individuals including businessmen, partners in a partnership firm as well as professionals are eligible for the scheme provided they have the made the proper IT filings.
- This scheme may also be availed by those deriving income from agriculture and ITR is not mandatory for agriculturists.
- Flexible loan repayment of up to 60 months or 5 years from date of disbursement.
Minimum Income Criteria: High performance motorcycles of 500 cc or above are expensive and thus SBI seeks to minimise its risk of providing this loan to various applicant groups –
- Net income of salaried applicant or joint net income of co-applicants need to be in excess of Rs. 6 lakhs annually to qualify for this unique scheme.
- For applicants who are self-employed businessmen, partners in a partnership firm or self-employed professionals, the latest ITR filing should show a gross taxable income or net profit of Rs. 6 lakhs annually. For purpose of loan eligibility, the money paid in lieu of existing loans and applicable depreciation is also considered when making the loan eligibility assessment.
- In case of individuals engaged in obtaining agricultural income, the net income of the co-applicants together or the sole applicant needs to be at least Rs. 6 lakhs annually.
The SBI 2-wheeler loan scheme is now calculated on the basis of 1yr MCLR rate of the State Bank of India. At present, 2 wheeler loans from SBI are available from as low as 11.65% onwards. Lower rates may, however, be applicable in case of individuals who are SBI salary account or a have other previous relationship with SBI or its Associates.
The processing fees are different in case of the standard SBI two-wheeler and the super bike loan. These are as follows:
For those seeking a SBI 2 wheeler loan, the applicable processing fees range from Rs. 250 to Rs. 500 along with applicable taxes and service charges. The amount is calculated as 1.5% of the 2 wheeler loan amount sanctioned by SBI for purchase of the vehicle.
- In case of an applicant seeking SBI’s super bike loan, the processing fees applicable are charged at 2% of the loan amount sanctioned by the bank plus all applicable charges and taxes. The minimum processing fees for availing the superbike loan is Rs. 5400 and the maximum processing fees for this financing option is capped at Rs. 17800.
An individual applicant interested in availing the SBI 2 wheeler loan can do so either through the online route or the offline route at an SBI branch of their choice. In case of individuals who are seeking discounted loan rates for financing their 2 wheeler, SBI remains one of the top choices as it has a pan India presence along with the most reasonable rate of interest of its two wheeler vehicle loans.