COMPANY PROFILE

More than half the numbers of cars sold in India wear

a Maruti Suzuki badge.  We are a subsidiary of Suzuki
Motor Corporation Japan. We offer full range of cars- from
entry level Maruti 800 & Alto to stylish hatchback Swift,
Wagon R, Estillo and sedans DZire, SX4 and Sports Utility
vehicle Grand Vitara.
   We were born as a government company, with Suzuki
as a minor partner, to make a people's car for middle class
India. Over the years, our product range has widened,
ownership has changed hands and the customer has
evolved. What remains unchanged, then and now, is our
mission to motorize India.  

Our parent company, Suzuki Motor Corporation, has

been a global leader in mini and compact cars for three
decades. Suzuki's technical superiority lies in its ability to
pack power and performance into a compact, lightweight
engine that is clean and fuel-efficient.
  The same characteristics make our cars extremely
relevant to Indian customers and Indian conditions. Product
quality, safety and cost consciousness are embedded into
our manufacturing process, which we have inherited from
our parent company.

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 Right from inception, Maruti brought to India, a very
simple yet powerful Japanese philosophy 'smaller, fewer,
lighter, shorter and neater'
From the Japanese work culture we imbibed simple
practices like an open office, a common uniform and
common canteen for everyone from the Managing Director
to the workman, daily morning exercise, and quality circle
teams.
  To reach our customers, we have built a strong sales
network of 600 outlets spread over 393 towns and cities. We
provide maintenance support to customers through 2628
workshops spread over 1200 towns and cities.

Source: www.automobilesindia.com

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 In these competitive times the challenge is to keep
inventing newer ways of doing things to keep the customers
in your fold.

Servicing customers 24x7... 365 days....

The company takes great pride in sharing that
customers have rated Maruti Suzuki first once again in
Customer Satisfaction Survey conducted by independent
body, J.D.Power Asia Pacific. It is 8th time in a row.

Setting up "Express Service Bays" & "2 - Technician

Bays"
As the name suggests the company set out to delight
its customers by offering them faster car service by
introducing new concepts such as Express Service Bays &
2- Technicians Bays.These are done for customers who are
hard pressed for time. Both the initiatives undertaken in
this direction have helped improve customer interface and
also helped increase the productivity and capacity of
existing workshops.

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Mega Camps

 
The company aggressively conducts 'Mega Camps'
throughout the country round the year.
Activities undertaken during a mega camp include
complimentary car wash, AC & Pollution check up, oil and
fuel top ups, wheel alignments etc.
Apart from mega camps workshop camps like A/C
checkup camps, PUC and general check-up camps, Locality
camps, Pre monsoon camps etc are also regularly conducted
as part of customer connect initiatives.

Service at your Door Step through Maruti Mobile

Support
Another unique initiative is the doorstep service facility
through Maruti Mobile Support.
Maruti Mobile Support is a first of it's kind initiative
and is expected not only to help the company reach out
customers in metro cities but also as a mean to reach semi
urban /rural areas where setting up of new workshop may
not be viable.

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Car Safety device: Immobilizer

  The company used technology to meet customer needs

and even delight them. Following feedback that the
company's cars were more prone to theft owing to their
resale value, the company worked on an anti-theft
immobilizer or "I-Cats;" system for all its new cars.

Complete car needs

The company's effort of providing all car-related needs
-- from learning to drive a car at Maruti Driving Schools to
car insurance, extended warranty and eventually
exchanging the existing car for a new one -- under one roof
at dealerships also enhances customer satisfaction. We
have two state-of-the-art manufacturing facilities in India.
 
    
The Gurgaon facility
Our facility in Guragoan houses three fully integrated
plants. While the three plants have a total installed capacity
of 350,000 cars per year, several productivity improvements
or shop floor Kaizens over the years have enabled the
company to manufacture nearly 700,000 cars per year at
the Gurgaon facilities.

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The Manesar facility  
  Our Manesar facility has been made to suit Suzuki
Motor Corporation (SMC) and Maruti Suzuki India Limited's
(MSIL) global ambitions.
The plant was inaugurated in February 2007. The
World Car derived from concept A-Star would be
manufactured here.

  The plant at Manesar is the company's fourth car

assembly plant and started with an initial capacity of
100,000 cars per year. This will be scaled up to 300,000
cars per year by October 2008.  
     
Diesel Engine Plant- Suzuki Power train India Limited  

  Suzuki Power train India Limited the diesel engine

plant at Manesar is Suzuki & Maruti's first and perhaps the
only plant designed to produce world class diesel engine and
transmissions for cars.

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 The plant is under a joint venture company; called
Suzuki Power Train India Limited (SPIL) in which SMC holds
70 per cent equity the rest is held by MSIL. This facility has
an initial capacity to manufacture 100,000 diesel engines a
year. This will be scaled up to 300,000 engines /annum by
2010.  

7
Indian Automobile Industry

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 Indian Automobile Industry

The automobile industry in India is the tenth largest in

the world with an annual production of approximately 2
million units. India is expected to overtake China as the
world's fastest growing car market in terms of the number of
units sold and the automotive industry is one of the fastest
growing manufacturing sectors in India. Because of its large
market (India has a population of 1.1 billion; the second
largest in the world), a low base of car ownership (25 per
1,000 people) and a surging economy, India has become a
huge attraction for car manufacturers around the world.
Though several major foreign automakers, like Ford,
Suzuki, GM, and Honda have their manufacturing bases in
India, Indian automobile market is dominated by domestic
companies. Maruti Suzuki is the largest passenger vehicle
company; Tata Motors is the largest commercial vehicle
company while Hero Honda is the largest motorcycle
company in India. Other major Indian automobile
manufacturers include Mahindra & Mahindra, Ashok
Leyland and Bajaj Auto.
Many foreign companies have been investing in the
Indian Automobile Market in various ways such as
technology transfers, joint ventures, strategic alliances,
exports, and financial collaborations. The auto market in
India can boast of attractive finance schemes, increasing
purchasing power, and launch of the latest products.

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 Total sales of major car manufacturers in India
registered a figure of 0.674 million units at the end of March
2007. The number of car exports in India was 39,295 units.
General Motors, Maruti, and Honda accounted for 60
percent of the market sales at the end of April 2007. There
has been an increase in the purchase of motorcycles and
cars both, in the rural as well as urban areas.
Some vital statistics regarding the automobile market
in India has been mentioned below:
 Two wheelers - 2nd largest in the world
 Commercial Vehicle - 4th largest in the world
 Passenger car- 11th largest in the world
As such, the Indian automobile market comprises of a
wide variety of vehicles such as light, medium, and heavy
commercial vehicles, cars, scooters, mopeds, motorcycles, 3
wheelers, and multi-utility vehicles such as jeeps and trax.
The modern automobile market in India has been
considering key issues in the process of growth:
 Customer care, and not just 'service'
 Domestic as well as multinational investments
 Searing through cut-throat competition
 Road safety
 Anti-pollution norms
 Coordination with the government to enable
advancement
 Used vehicle trade

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 The future of Indian Automobile market is bright as it
looks forward to manufacturing and implementing new
innovations such as electric cars as provided by Reva,
alternate fuels like CNG and LPG, and probably customized
Internet automobile orders.

Modern Automobiles Market – Key Issues:

The latest trends and key issues in the modem
automobile market need to be considered for successful
entry in the Indian Market.
1. Government – The Enabler
In contrast over the past, Indian Government has
switched over its role from controller to enabler. The focus is
on providing better infrastructure, growth oriented
economic policies and right environment to attract
investments.
 An ambitious project of Interstate highway network,

called golden quadrangle, is in its advanced stages of

implementation.
 Pollution control has become another priority area.

There is a proposal to ban all the vehicles older than

10~15 years, which is likely to boost the demand of
modem automobile.
 The import duties on the CBU and Used vehicles are

designed to protect the interests of the automobile

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 manufacturers in India, an incentive to attract foreign
investment.
 Government has also cut the excise duty to boost the

demand. Although, it has met with a limited success in

past, with a favorable economic environment,
Government may take these proactive steps again.
 The oil companies are about to be privatized which is

likely to make them flexible and customer friendly.

These developments have made India an attractive and
promising destination for any global player.

 Competition – Cut Throat

The entry of multinationals has put immense pressure
on Indian companies. Some of them have entered into joint
ventures with multinationals; a few others have invested
heavily on R&D to be on their own, others perished. The
market has now polarized into two distinct segments:

 Indian Players:
Those who invested in R&D survived. They could
launch new models, retain their dealer network and improve
on their service in due course of time. They have
strategically leveraged their low cost structure to create
price barrier for the competition. Most of them offered "value
for money" products to offset their weakness in technology
and styling.

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  Multinationals:
The multinationals have launched international
products with better technology and styling at higher price
points. These products appealed to a different class of
customers who were "value-conscious". This class of
customers has an attitude to appreciate evolved product
offerings and buying power to purchase them.

 Customer – The King

Undoubtedly the customer has become the King. The
modem customer is armed with IT and has higher buying
power. The ever-increasing expectations from products and
services are a major challenge for all the players in the
market. The softer issues have gained as much importance
as product features in his brand decisions. There is higher
propensity towards choosing brand that befitting the self-
image.

2. Customer Care – Not just service

After sale service is the clinched description of the
function. The customer today is looking beyond just fixing
the problems. The service experience, ambience and the
expertise are sought after. 24-hour breakdown service is not
uncommon.

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Pollution and Safety norms
Indian two wheelers have already met the most
stringent international norms of pollution. The cars are not
left far behind. Government of India is dead serious about
enforcing them. Euro II vehicles have become a norm in the
NCR region, Mumbai and KoIkata. Soon these norms would
be enforced in 6 other metro cities and eventually all over
India.
 Automatic Scooters:
This segment is likely to be the best gainer from
increasing buying power of the urban customer. There is
propensity towards owning unisexual vehicle in the family.
Hence, there is a storing possibility that the current
motorcycle owner may graduate to automatic scooter for
overall convenience.
Although, current volumes do not look attractive, we
strongly recommend launch of product in this segment. The
convenience package offered by this category should be
supplemented with lower cost of ownership to become
successful.
Looking at the current volumes and tends we
recommend launch of products in following segments
 Image Builders:
The presence in D segment builds the image for the
company. The volumes may not look lucrative to enter the
segment. But the product offering demonstrates the ability

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of the company to manufacture high-end, latest technology,
well styled
One of the problems faced by the market leader Maruti
has been its absence in D segment.
 Profit Builders:
The current sale trend indicates that lower C segment is
growing. Keeping in mind the trends in banking sector and
the consumer psyche, we feel that this segment would
increase its share in the category. Improving road conditions
and infrastructure would increase its share in the category.
Improving road conditions and infrastructure would make
inter-city travel in personal cars very easy. The customer
would graduate from A and lower a to tower C segment for
better luggage space, higher power engine and better road
handling at high speeds.
 Volume Builders:
Volume for tomorrow lies in upper B segment the
fastest growing segment in the category. Affluent first time
customers are likely to find upper B segment attractive. The
offerings in this segment combine the best of both worlds -
maximum space inside the car and maneuverability of the
small car. The success of Indica and Palio suggest that this
of future.
 An eye on the future
Following are some very diverse trends seen in the
market, which also need to be tracked in the future.
 Alternate Fuel:

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 Currently, the use of CNG and LPG is legitimate on all
vehicles. The transport vehicles are first ones to adapt to
these cheaper fuels. The usage of these fuels is not:
considered very safe by individuals. But as the equipment
starts safer and the distribution of the fuel improves,
individuals would start graduating towards them.
It is strongly recommended that any new engine
should be compatible to these fuels.
 Electric Car:
Reva has met a limited success in the cities. With
technological advancements electrical car may emerge as a
preferred option as a second car. This trend needs to be
studied for its implication.
3. Advent of Internet:
Indian customer is known for his propensity towards
"touch-Tel factor before making a buying decision. But the
new generation, which is growing with the Internet. May
defy this logic. Internet would assume much larger role than
just information dissemination. In the new market scenario,
Internet would actually drive the value chain. The customer
would use the Internet to place the customized order and
expect the manufacturer to fulfill it in the minimum time.

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17
 OBJECTIVE OF THE STUDY

Primary Objective:
To study the Market Potential and Customer
Satisfaction of Maruti cars in Jabalpur.

Secondary Objectives: are

 To find the reason behind satisfaction and
dissatisfaction of customer.
 To find the income level group and their buying
behavior.
 To find out the market segmentation strategies
followed by Maruti Automobile Companies.

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RESEARCH METHODOLOGY

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 RESEARCH METHODOLOGY

 Definition of Research Methodology

For this project a descriptive research study was
appropriate as this study describes the buying perception of
the consumers.
This study will help the company to launch new
promotional schemes in future. Based on this study we may
have high probability of success regarding promotional
strategies.
The research design is a grand plan for conducting the
research investigation. It specifies the overall framework
and the specific procedure for collecting and analyzing the
data.
Research Methodology is a strategy that guides a
researcher in providing answers to research questions and
for this, research survey is being done. "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.
This study in the following manner:
Research in common parlance refers to a search
for knowledge. In fact research is an act of scientific
investigation. According to Clifford Woody research
comprises defining and redefining problems, formulating
hypothesis or suggested solutions collecting; organizing and
evaluating data, making deductions and reaching

20
conclusions to determine whether they fit the formulating
hypothesis.
Research in thus an original contribution to the
existing stock of knowledge making for its advancement. It
is the pursuit of the truth with the help of study,
observation comparison and experiment in sort of the
search for knowledge through objective and systematic
method of finding solution to a problem in research.

STAGE I
COLLECTION OF DETAILS ABOUT THE ORGANISATION
Details regarding the organization were collected from
managerial and administrative staff in the relevant
departments. Collection of the information was restricted
only to those pertaining to the specific area of study. A
broad idea about the organization’s profile about its
activities was obtained from the existing literature.
STATE II
QUESTIONNAIRE DESIGN

The questions were designed in an easily

understandable way that the respondents may not have any
difficulty in answering them. The questionnaire also
contained a comments section. This section was included so
as to get opinion of the people regarding the bank;
questionnaire basically seeks four types of information
about respondents.

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(1) The background
(2) Their activities and behaviors.
(3) Their attitudes and opinions
(4) Their knowledge

STAGE III
RANDOM SAMPLING
Sampling can be defined as a part of population. Thus
random sampling may be defined as the selection of a
portion from the whole population in which each elements
of the population has an equal chance of being selected. A
more please definition is that each element in the
population has a non-zero and known probability of
selection a randomly drawn sample is an unbiased sample.
In this research survey 50 households were surveyed at
random to get the relevant information.

STAGE IV
DATA COLLECTION
STRUCTURED QUESTIONNAIRE
In collection data, structured questionnaire is used as
a tool by asking a set of standardized questions to know the
behavior of the people for the bank and the services
provided by the bank.

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INTERVIEW
The next step involved in collecting information
requires discussion with people. Thus valuable information
was gathered informal friendly talks with the pe
STAGE V
INTERPRETATION
Interpretation refers to the task of drawing inference
from the collected facts after an analytical study; In fact, it
is a search for broader meaning of research findings. It is
through interpretation, that the researcher can well
understand the abstract principle that respondents be neat
his findings.
 METHODS OF DATA COLLECTION
The task of data collection begins after a research
problem has been defined and research design/plan
chalked out. While deciding about the method of data
collection to be used for the study, the researcher should
keep in mind two types of data viz., primary and secondary.
The primary data are those which are collected a fresh and
for the first time, and thus happened to be original in
characters. The secondary data, on the other hand, are
those which have already been collected by someone else
and which have already been passed through the statistical
process. The researcher would have to decide which sort of
data he would be using (thus collecting) for his study and
accordingly he will have to select one or the other method of
data collection. The methods of collecting primary and

23
secondary data differ since primary data are to be originally
collected, while in case of secondary data the nature of data
collection work is merely that of compilation. We describe
the different methods of data collection, with the pros and
cons of each method.
1) Method of Data Collection
• Primary Survey Method
• Observation
• Secondary Data
2) Data Collection Tool
(i) Primary Survey Method
(ii) Structured Questionnaire
(iii) Personal Interview
Observation
Secondary Data
• From Company
• From Websites.
3) Sample Size
The sampling technique used in this project is
probability sampling technique and the method used in
cluster sampling.
Sample Units: Jabalpur
Sample Size: 50 customers
Sample Area: Jabalpur

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4) Statistic tool
 Bar
 Pie chart

TOOLS USED FOR DATA COLLECTION

In this research project primary data has taken with
the help of structured questionnaire. Further, statistical
tools like bar, pie chart methods along with percentage
method has been used.

25
LIMITATIONS OF THE STUDY

26
 LIMITATIONS OF THE STUDY

 Conclusion drawn depends upon the respondent’s

response and limited time was available for conducting
survey.

 People were not ready to share their knowledge.

 Another Limitation is of sample area and the project

holds implicit in Maruti Udyog only.

 Sample size is not treated as universe as the size is

only 50.

 The outcome is drawn from questionnaire hence

outcome is limit.

27
Company Profile

28
THEORY OF THE TOPIC

29
 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

30
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:
 Equipment finance, lease and hire purchase, is
generally provided only for general purpose machinery.
 In the case of imported equipment we provide the
finance but this is approved on a case to case basis.
 
 

31
32
 EXECUTIVE SUMMARY

WHAT IS 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:
 Upper Class
 Lower Class
 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

33
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 should 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..
 To Buy A House
 To Buy Different Products Like Home Appliances
 To Buy Property
 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 pay loans 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

34
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.
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:
 Long-Term Loans
 Short-Term Loans
 UnSecured Credit Lines
 UnSecured Loans
 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 seeking opportunities 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

35
is obligated to pay back or repay an 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.

36
 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

37
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.

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:
 credit card debt
 personal loans
 bank overdrafts
 credit facilities or lines of credit
 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

38
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.

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.

39
 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 payment P for a loan of L for n
months and a monthly interest rate 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.

40
 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. What’s 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
 Pay interest only on the funds you withdraw.
 Pay only a minimum of 5 % of the utilised amount. No
fixed EMIs.

41
Arm yourself with these tools:
 A Roaming Current account
 Multicity Cheque Book
 Internet Banking Access
 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.

42
Baroda Car Loan
In today’s 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
 Loans available up to Rs 15 Lacs for any car
make/model (Inclusive of Gas-Kit).
 Loans can be availed for new and second-hand
vehicles (Not more than 3 years old).
 Repayment period as long as 7 years.
 Low interest rates.

43
Is your dream car still a dream?
Axis Bank’s Power Drive will help realize your dream.
With some of the world’s finest cars now available in India
don’t 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 don’t have to put the brakes on your
ambition.
 Loan value calculated as per the on-road-price of the
vehicle.
 Attractive interest rates.
 LTV of upto 85% of the on-road-price on selected
models.
 Loans available for salaried and self employed
individuals, proprietorships and partnership firms.
 Special schemes for Axis Bank Salary and Priority
accountholders.
 No income proof schemes available.
 Loans offered from Rs. 1 lac onwards.
 Loans tenure from 1 year to 7 years.

44
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 :

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

Enjoy the SBI Advantage :

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 vehicles offer you :
 Lowest interest rates.
 Longer repayment period of upto 84 months.
 No hidden costs or administrative charges.

45
 Finance for one-time road tax, registration fee,
insurance premium and accessories.
 No advance EMIs(Some Banks/companies ask you to
pay one or more EMIs at the time of disbursement of
loan, thereby effectively reducing your loan amount).

46
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 of Loan
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.

47
 This manual describes the process to be followed for Car loan

from sanctioning to disbursing loan to all categories of borrowers.

Customer Category
Customers are divided into two categories:

IP (Income Proof) nip (Non-income prrof)

Where the income of an applicant is Where the income of an applicant is
more than the minimum annual less than the minimum annual
income defined in the car product income defined in the car product
manual manual
Income proofs are mandatory to
Income proofs are not mandatory
qualify for inclusion in this category

Based on their source of income, customers can be divided into the

following types:
1)       Salaried Applicants (SALs)
These applicants are employed in:
   A Company that is either public limited (e.g., Reliance
Industries) / private
limited (e.g., erstwhile Shrachi Finance) or a Government
undertaking (e.g. Indian Railways)
   The Government at the Central / State, District or Gram
Panchayat level
    The proprietorship /partnership company

48
2)       Self-Employed Professionals (SEPs)
These applicants do not work in a company / government and are
qualified:
 Architects
 Chartered Accountants / Cost Accountants / Company
Secretaries / MBAs
 Doctors*
 Engineers

3)       * Doctors
These applicants are allopathic doctors with an M.B.B.S. / M.D. or
dentists with B.D.S. / M.D.S. qualification. These applicants must be
employed in the following manner:
a.      Carry on a private practice or
b.      Carry on a private practice and also work in a company /
Government organization
Note: Doctors / Dentists working in a company / Government
Organization, who, do not have a private practice, will be classified as
SAL.

4)       Self Employed Non Professionals (SENPs)

Applicants that do not fall in the above categories will be classified as
SENPs. Typically, SENPs will be owners (proprietors) of retail outlets
such as shop owners and car dealers

5)       Partnership Firm / Limited Company

A partner or director of a partnership firm or a listed company needs
to apply for availing of a car loan on behalf of the partnership firm /
listed company.

49
Sourcing and Pre-Screening
A customer walks into a car dealership / Magma’s branch office /
Channel’s office and is approached by the dealer or Magma’s sales
executive or a DST or Non-Dealer DSA present at the dealer location
for car financing and fills in the Application form as per Annexure. We
have to ensure all critical and relevant information is captured at this
stage. The application form represents the first level of information
received from the customer, which serves as the basis for further
credit verification.
Critical Customer information to be captured in the Application
Form
o        Name –First, Middle and Last name
o        Type of Applicant
o        Father’s / Spouse Name
o        Date of birth
o        Current office and residential address
o        Number of years at current residence and office address
o        Profession
o        Designation
o        PAN Card number
o        Credit card details (if any)
o        Bank account details
o        Two reference details
o        Loan Details
o        Source details
o        Details of other loans including MSFL (If any)
Note: The Application Form has to be filled in by the applicants/ co-
applicants/ guarantors i.e. by all the parties to the agreement.

50
Documents to be submitted along with Application Form
 Identity proof
 Photograph
 Age proof
 Bank account proof
 Income proof / Business stability proof (last two years)
 Residence proof
 Proof of residence stability (≥ 1 year)
 Office address proof
 Signature verification proof
 Telephone connection proof
 Fleet proof including loan repayment records (Applicable to
commercial usage only)
 Viability Report (Applicable to commercial usage only)*
 Approved valuer’s report with photograph of the vehicles for
refinancing used cars*
 Partnership Deed, Partner’s Authority letter ( In case of
Partnership Firm)
 Memorandum of Association / Article of Association ( in case of
Pvt./ Public Ltd. Company)
 Board Resolution ( In case of Pvt./ Public Ltd. Company)*
 In case if co-applicant / guarantor being involved, then
additional documents pertaining to the co-applicant /
guarantor need to be collected.

Field Investigation (FI)

All the cases that pass through de-duping qualify
for field investigation which is performed by Magma’s dedicated FI
team. Field Investigation (FI) is conducted to check whether the
applicant/co-applicant/guarantor is staying at the given address
provided while applying a loan. This involves a site visit to the

51
residence and office address of the applicant by Magma’s field verifier
in order to access the living conditions / employment conditions of the
applicant.
Note: FI is to be conducted for all the parties involved in the agreement

Objectives of field investigation

 Field investigation establishes the presence of the customer at
the given residence and office; frauds are therefore minimized.
 It verifies living standards and employment conditions through
visual observation and provides invaluable inputs to judgmental
decision-making.
 It derives neighbourhood reference checks and provides third
party inputs to the decision making process.
Functions of a Field Verifier
1)       The verifier should not carry the application form with him;
rather he should obtain basic information like name, address
(residence and office) details, asset details and telephone
numbers of applicant, and loan amount applied for, from the
Credit Support team prior to the field investigation.
2)       The verifier must make a visit to both the residence and office
of the applicant.
3)       The verifier must follow the FI template for residence and office
address verification and capture all the information as per the
FI report template.
4) While conducting field investigation, the executive must ensure
and validate the following :
a)       The address given in the application form is correct. He should
keep a road map for approaching the residence from a known
point. He should ascertain the Police Station under which the
applicant’s residence/ office fall.

52
b)       The vehicle to be taken as per the version of the proposed hirer
should be same as given in the Proposal Form.
c)       The economic status of the client should be judged after
verifying visually his living standard, the dependence, and the
earning of other family members like wife and parents.
d)       A discreet inquiry should be made in the neighbourhood to
judge the client’s nature and capability to repay the loan
e)       The verifier should find out whether the house / residence in
which the client is residing is his own or rented; if rented, the
period of applicant’s stay at his current residence must be
recorded
f)         The verifier should enquire the end use of the vehicle i.e.
whether it is being taken for the purpose of gifting
g)       The FI executive should enquire about the applicant of what
documents he had submitted as identity proof and address
proof and then he should check the original documents. The FI
executive should then validate the address and identity and the
same should be mentioned in the FI report.
h)       Voter ID card number / passport number, driving license
number or any other club membership number of applicant
should be noted down in the FI report template during field
verification.
i)         Applicant’s income and salary / saving account details should
be captured during field investigation and same should be
mentioned in FI report.
j)         In case of commercial usage, an applicant’s existing fleet
details should be inquired and mentioned in the FI report.
k)       If picture / portrait of a political leader are found in an
applicant’s residence, then enquiries should be made regarding
the applicant’s political affiliations.

53
l)         The representative should use his tact to get all required
information without hurting the sentiment and ego of the
proposed hirer.
m)     If the applicant’s residence / office door is locked then the FI
executive should call and set up an appointment with the
applicant for conducting the FI at office / residence.
a.       The executive should prepare a Negative FI report if the door of
the client’s residence remains locked for the second time at the
scheduled time of the appointment.
Guidance for Field Verifier
‘Do’s’ and ‘Don’t’ for the FI Staff have been provided below:
DOs
1.       Take permission before entering the house.
2.       Introduce yourself in the beginning.
3.       Make the purpose of your visit clear.
4.       Ask for identity/relation of the person contacted with the
applicant before asking for any information.
DON’Ts
1.       Don’t agree to get entertained.
2.       Don’t comment on the status of the loan.
3.       Don’t try to influence the customer to give details.
4.       Don’t actually ask questions about assets which are not
noticed at the time of
the visit.
5.       Don’t ask questions to minors, old people and servants.
The duly signed Office and Residence FI report should be submitted
to the Credit Support team by the FI team.

54
Reference Telephone Verification
A reference TVR is mandatory for all the cases and
is conducted on references (provided by the Applicant) to obtain third
party inputs on the applicant and cross check the information
provided by the Applicant. The TVR team (i.e. Credit Support) calls the
references provided by the Applicant at the telephone numbers
mentioned in the application form and obtains information as per the
TVR report template.

Reference TVR Requirements

The following details are required to be asked about the Applicant
during the Reference TVR:
1)     Do you know the Applicant ( mention the name)
2)      Relationship with Applicant
3)      Duration / period of the relationship (i.e. How long does the
reference know theApplicant?)
4)       Ask the reference to confirm the residence and office
address and match it with addresses mentioned in the
application form; if address mentioned by the reference differs,
then a negative TVR Report should be generated.
If the reference provides a negative feedback about the client a
negative TVR report is generated. The TVR Team should make a
maximum of 5 attempts to call the reference and if he / she is not
reachable within the maximum number of attempts, the same should
be mentioned in the TVR Report. The Credit Officer should enquire
the cause (the reference not being contactable) for the same during
Applicant TVR that he conducts himself while underwriting the
proposal.
After completing the references a TVR report is prepared and attached
in the file for further processing.

55
Note: The same TVR sheet is to be used by the credit underwriter
during the sanction stage.

Risk Containment Unit

The Risk Containment Unit (RCU) located at the Hub verifies the
authenticity of the documents submitted by the Applicant. The RCU
will screen all files and in consultation with credit head will select the
sample of documents to be verified based on the Applicant category.

Documents to be looked for

Following is the sample list of documents which needs to be looked
into while verifying the documents:
Documents to be looked for (indicative list)
Type of Documents to be looked for
Document
Income Proof o     Latest salary slips – PDF printout / system generated
copies/ salary certificate provided by company
o     Income tax returns acknowledged by ITO
o     Latest form 16
o     P/L A/C & Audited Balance Sheet
Address Proof o     Ration card (In the name of applicant)
o     Utility (electricity or telephone) bills not older than 60
days from the application date
o     Valid passport ( should not have expired)
o     Voter Id card
o     Property papers- Property registered deed, Property
tax receipt
o     Latest gas bill (not older than 60 days from
application date) in applicant’s name or in the name of
immediate family, defined as parents, spouse and
children. Relationship proof is required if in family
member’s name.

56
Type of Documents to be looked for
Document
Identity Proof o    Valid passport ( should not have expired)
o    Voter Id card
o    Valid driving license (should not have expired)
o    PAN card
o    Employee photo Id card issued by Govt. / reputed
public limited companies (listed with NSE/BSE)
Signature and o    Valid passport
date of birth o    Driving license
proof o    PAN card
o     Bank verification Photo credit card with signature
embossed

Banks/Rates New Car Loan Used Car Processing

(Reducing) Loan Fee
(Reducing)
ICICI Bank 10% - 11.75% 15.50% - Rs.2500/-
(for 36 months 17% to
- 60 months Rs.5000/-
Loan Tenure),
12.25% -
13.25%
(for 24 months
- 35 months
Loan Tenure),
14.25%
(for 23 months
Loan Tenure)
HDFC Bank 10.50% 17% - 19% Rs 2950/-
-11.25% to Rs.
3950/-
Kotak Mahindra 10% - 12.5% 17% - 20% Rs.3300/-

57
 to
Rs.4750/-
Axis Bank 9.50% - 16.50% - Rs.3000/-
10.50% 18% to
Rs.3500/-
State Bank of India 8% N. A. 0.5% of
(SBI) (Fixed for 1 loan
year) Amount
9.75%
(from 2 & 3
year), then
floating
(market rate)
Bank Of India 10.75%(upto 10.50% - N.A
3 yrs ),Then 10.75%
11.25%
Federal Bank 9.75% for 3 N. A. Rs 1655/-
yrs, to Rs
10.25% for 5 2758/-
yrs

58
 CAR LOAN ELIGIBILITY

Tenure (in Years)

Banks
CitibankSalariedSelf - -
- Employed
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

Banks
CitibankSa Application form Application form
laried Self- with photograph, with photograph,
Employed Identity & residence Identity & residence
proof, Latest salary proof, Last 2 years
slip, Form 16, Bank income tax returns,
statements not Last 6months bank
necessary statement.
ICICI Application form Application form
with photograph, with photograph,
Identity & residence Identity & residence
proof, Latest salary proof, Last 2 years
slip, Form 16, Bank income tax returns,
statements not Last 6months bank
necessary statement.
HDFC Application form Application form
with photograph, with photograph,
Identity & residence Identity & residence
proof, Latest salary proof,Last income
slip, Form 16, Bank tax returns, Bank

59
 statements not statement waived for
necessary small cars,for mid-
sized & premium
cars if income is
greater than 15 lacs.
SBI Application form Application form
with photograph, with photograph,
Identity & residence Identity & residence
proof, Latest salary proof, Last 2 years
slip, Form 16, Bank income tax returns,
statements not Last 6months bank
necessary statement.
Bank of Application form Application form
Baroda with photograph, with photograph,
Identity & residence Identity & residence
proof, Latest salary proof, Last 2 years
slip, Form 16, Last 6 income tax returns,
months bank Last 6months bank
statement. statement.
Oriental Application form Application form
Bank of with photograph, with photograph,
Commerce Identity & residence Identity & residence
proof, Latest salary proof, Last 2 years
slip, Form 16, Last 6 income tax returns,
months bank Last 6months bank
statement. statement.

 
Partnership Firm
Banks Salaried Self- Employed

ICICI - Application form

with
photograph,
Identity &
residence proof,

60
 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.
HDFC - Application form
with
photograph,
Identity &
residence proof,
last 2 years
income tax
returns, last 2
years profit &
loss account.
SBI - -
Bank of Baroda - -
Oriental Bank of - -
Commerce

61
 DOCUMENTATION REQUIRED

DOCUMENTS SALARIE SELF- PVT PUBLIC

D EMPLOYE LTD / LTD
D LTD CO.
CO'S
Application Required Required Require Require
form d d
Income ITR or ITR and ITR and audited
Documentatio Form 16 audited accounts
n (latest 2 and last 2 accounts
years) months or
salary computatio
slips n of income
statement
and
assessment
order copy
Bank Required Required Require Require
Statement d d
(previous 3
months)
Proof of Required Required - -
identity
Proof of Required Required - -
Residence
Office - Required Require Require
Address Proof d d
Legal - - Memorandum of
Documents Association and
Articles of
Association

62
Case Study

63
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 Documents Required
 2 Colour recent  2 Colour recent
photographs signed across photographs signed across
 6 Months Bank  6 Months Bank
statement statement
 2 Month Salary  2 Month Salary
Slip Slip
 Last two years  Last two years
ITR with computation of ITR with computation of
Income Income
 Proof of Identity  Proof of Identity
 Residential  Residential
proof proof
 Form 16 A
Farmer / Agriculturist
Documents Required
 2 Colour recent
photographs signed across
 6 Months Bank statement

 Proof of Identity

 Residential proof

 Bahi

 Minimum 3-5 Acres Own

Land

64
 Therefore following Finance schemes provided by the
bank with different tenures.
Loan Amount Applied For Rs. : 500000
Rate of Interest : 8%
EMI IN ADVANCE
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.

EMI EMI Interest Principal Balance

Number Amount Amount Reduction 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

65
 Total Interest Amount : Rs. 18474
Complete EMI List

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)

66
 Following Schedule Is For :
500000 to repay in 23 months. All calculations are based on EMI in Advance.

EMI EMI Interest Principal Balance

Number Amount Amount Reduction Due
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

67
Total Interest Amount : Rs. 39133

68
 Complete EMI List

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)

69
 Following Schedule Is For : 500000 to repay in 35
months.
All calculations are based on EMI in Advance.

EMI EMI Interest Principal Balance

Number Amount Amount Reduction Due
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

70
23. Rs.15564 Rs.1288 Rs.14276 Rs.178925
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

Total Interest Amount : Rs. 60319

71
 Complete EMI List

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)

72
 Following Schedule Is For : 500000 to repay in 47
months.
All calculations are based on EMI in Advance.

EMI EMI Interest Principal Balance

Number Amount Amount Reduction Due
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

73
22. Rs.12126 Rs.1924 Rs.10202 Rs.278374
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
Total Interest Amount : Rs. 82030
Complete EMI List

74
 Months EMI
12 Rs. 43206/-
24 Rs. 22464/-
36 Rs. 15564/-
48 Rs. 12126/-
60 Rs. 10071/-
72 Rs. 8709/-

Note: Interest calculated at 1/12th of annual interest rate

on the remaining principal amount. (Rounding errors
possible)

75
 Following Schedule Is For : 500000 to repay in 59
months.
All calculations are based on EMI in Advance.

EMI EMI Interest Principal Balance

Number Amount Amount Reduction Due
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

76
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
52. Rs.10071 Rs.521 Rs.9550 Rs.68654
53. Rs.10071 Rs.458 Rs.9613 Rs.59041

77
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

Total Interest Amount : Rs. 104263

78
 Complete EMI List

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)

79
Research Findings

80
 RESEARCH FINDINGS

Do you have any automobile ?

Do you purchase this in cash/finance

81
Is the Rate of Interest is feasible provided

Do you know which type of finance it is?

82
Is the terms and conditions by the bank are clear?

What about paper work ?

83
Is the loan facility is provided by the automobile premises or
you take from other bank

84
 FINDINGS OF THE STUDY

As per my study
 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.
 They don’t have proper knowledge about the terms and
conditions behind filling the form.
 They are not aware about other finance schemes
provided by various other banks.
 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 .

85
 SUGGESTIONS FOR CUSTOMERS

It’s 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, you’ll 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 there’s 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 don’t 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 it’s easy to manage today. However, that
choice increases the total cost of your auto loan and usually

86
leaves you ‘upside-down’ (meaning you owe more on the
vehicle than it’s worth) for years to come.
Consider Insurance
When you ask various lenders what they’ll offer you,
you may find that you need insurance to get the best auto
loans. I’m referring to disability insurance and life insurance
at this point. The lender is concerned that something could
happen to you and you wouldn’t 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 don’t 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, you’ll
be armed with knowledge of what’s 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. It’s important to read the fine
print – some penalties aren’t called “penalties”.

87
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 don’t 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 fees and method
of EMI calculation.
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.

88
Find out if the Bank is offering a step-up option
This option is suitable for persons who can’t 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.

89
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 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 get credited 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.

90
Bargain and look for special discounts.
You can always negotiate the final rate of interest/EMI
that you have to pay. Yes that’s 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.

91
 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

92
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.

93
 REFERENCES

1. Internet
2. www.wiki.com
3. www.autofaq.com
4. Research Methodology : C.B. Mamoria
5. Marketing Management : Philip Kotler – 5 th Edition

94
 APPENDIX

1. Do you have any automobile ?

2. Do you purchase this in cash/finance
3. Is the Rate of Interest is feasible provided
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

95