Tata Nano SBI, Canara Bank and Bank of India loan interest rates

Bank Of India, one of the banks with which Tata Motors has tied up to finance the Tata Nano, has offered a scheme for existing customers who wish to buy the Tata Nano.As per the new scheme, loan seekers will get a three-month moratorium on interest and principal payment.

The scheme will not recover upfront interest from the loan seeker.

“The loan is highly beneficial to people who will get the allotment and delivery of vehicle as it shall be charging a floating rate of interest of 10.25 per cent with repayment period less than 36 months,” Bank of India said in a statement.

Bank of India has said that loan seekers will have to pay 10.75 per cent interest between 3-6 years, which is the lowest rate on auto finance charged by banks.

“On booking the loan, it shall charge 12 per cent fixed rate of interest only till delivery of the vehicle. Booking loan may be for a short period of 90 days only and delivery period as declared by Tata Motors,” Bank of India said.

Meanwhile, other banks are also trying to offer competitive interest rates for Tata Nano loan seekers.

The Economic Times has reported that Canara Bank is expected to sign a Memorandum of Understanding (MoU) with Tata Motors, as one of Tata’s preferred banks to finance the Tata Nano.

Canara Bank is said to charge a low interest, fixed rates for short tenures and higher interest rates for longer tenures.

The bank will charge a fixed interest rate of 9.5% for the first year of the loan, 10.5% for the second and third years, and 11.5% beginning the fourth year.

On the other hand, the State Bank of India will charge a floating interest rate of 11.75% for loans up to five years and 12% for loans up to seven years, after the initial 90 days of booking.

UCO bank, which will sign a MoU with Tata Motors for financing the Nano, will offer full or partial loans to make the initial deposit for booking the Tata Nano.

Subsequently, UCO bank will charge an interest rate of 10% per annum on the loan.

If loan seekers want to convert the loans into auto loans they will be charged existing interest rates, the bank said.

The booking window for the Tata Nano opens on April 9, 2009. The forms, costing Rs 300 apiece, will be available at SBI branches, Westside, Croma, World of Titan, and Indicom showrooms.

Tata Nano buyers will need to pay Rs 95,000 to book the base model of the Tata Nano, of which they has to pay a minimum of Rs 2999 if they take a loan from SBI, and Rs 2,850, if they choose Canara Bank.

Tata Nano’s preferred banks for financing the Tata Nano are SBI, ICICI Bank, Axis Bank, Corporation Bank, Central Bank, Union Bank of India, UCO Bank , United Bank of India, Indian Bank, Federal Bank, and the Punjab National Bank.