Your 2w loan rate is 36% not 18%.

I was offered a two wheeler loan from ICICI bank at 18%
Loan amount: 31500
Tenure: 2.5 yrs
EMI: 1475
So if i calculate emi at a reducing loan amount the loan rate comes to 36%. Your comments please.

i am not sure about the loan rates but the experience i had with ICICI bank was totally bad due to a ton of reasons so i wud advice those i know to not to go for the bank

Wrong Section

Thread Reported!!!

Sorry for the blunder

I was offered a two wheeler loan from ICICI bank at 18%
Loan amount: 31500
Tenure: 2.5 yrs
EMI: 1475
So if i calculate emi at a reducing loan amount the loan rate comes to 36%. Your comments please.

use RTI and ask ICICI for an writen explanation that why ICICI delivertlly tried to cheat u via this statement

wait for their writen explanation and then file a law suite

redhat said:
Wrong Section

Thread Reported!!!

Then where should have been this posted?

icici,they are sh!tholes/ If there is any co-operative banks in ur state,go take a loan from them,thats the best way

offtopic:
@agnels:still,I wonder what happened to ur deal with itdepot.com and its owner?

T

chotocheeta said:
use RTI and ask ICICI for an writen explanation ........

Is RTI applicable to private companies and banks as well? As far as I know, its not

R

agnels said:
I was offered a two wheeler loan from ICICI bank at 18%
Loan amount: 31500
Tenure: 2.5 yrs
EMI: 1475
So if i calculate emi at a reducing loan amount the loan rate comes to 36%. Your comments please.

Seems u r taking the loan for the 1st time.
18% Per Annum so if u take a loan for 5 years it will be 18x5=90% of ur total amount in 5 years.

So u take Rs10000/- u will pay 19000/- back in 5 years.

BTW I always failed in my maths class but somehow mangaed to remember that whenever any thing is quoted in % its always per year only by default.

asnvin said:
Is RTI applicable to private companies and banks as well? As far as I know, its not

NOPE

ranjan2001 said:
Seems u r taking the loan for the 1st time.
18% Per Annum so if u take a loan for 5 years it will be 18x5=90% of ur total amount in 5 years.

So u take Rs10000/- u will pay 19000/- back in 5 years.

BTW I always failed in my maths class but somehow mangaed to remember that whenever any thing is quoted in % its always per year only by default.

Yeah, whatever is quoted in % terms is by default in p.a. terms, but ur calculations are wrong. One is not supposed to add the rate, coz see the thing is he is paying the principal amount every year as well. So that has to be reduced from the amount of loan taken.

agnels said:
I was offered a two wheeler loan from ICICI bank at 18%
Loan amount: 31500
Tenure: 2.5 yrs
EMI: 1475
So if i calculate emi at a reducing loan amount the loan rate comes to 36%. Your comments please.

See I didn't understand you question. Pls do tell if u were payin the installment at the beginning of the month or at month end.
According to my calculations:

You paid: 1475*30months = 44250
Loan amount = 31500
Interest paid = 44250-31500 = 12750

I saw this thread a little late I think. I have a two wheeler loan from Canara Bank. Its called Doctor's choice, where I get to buy equipment for clinic expenses. It may include medical equipment, vehicle, laptop, etc. The loan is given at 8.5% diminishing interest for a two year tenure or 3% diminishing interest for a three year tenure. If you have any doctor friends, ask them to take the loan and you stand guarantor. That way he will feel safe and won't have to worry. You will pay the loan on his behalf, plus he may claim depreciation for his income tax benefit

Your risk is that the vehicle will be registered in his name.

R

NucleusKore said:
Your risk is that the vehicle will be registered in his name.

& his bonus will be that if the vehicle gets involved in an accident he will have to be in police station & you still can bail him out

ranjan2001 said:
& his bonus will be that if the vehicle gets involved in an accident he will have to be in police station & you still can bail him out

lol lol loling

offtopic:
@agnels:still,I wonder what happened to ur deal with itdepot.com and its owner?

I have posted it in the respective post long back. Rules dont allow me to post it here

ranjan2001 said:
& his bonus will be that if the vehicle gets involved in an accident he will have to be in police station & you still can bail him out

That's a good one, thanks for the insight
*farm3.static.flickr.com/2180/2122604477_1f3f245df7_o.png

Anyway if you have comprehensive insurance no problem.

R

NucleusKore said:
That's a good one, thanks for the insight
*farm3.static.flickr.com/2180/2122604477_1f3f245df7_o.png

Anyway if you have comprehensive insurance no problem.

comprehensive insurance (injury/death) wont help you getting bail.
My Father bought me a 2 wheeler & the dealer requested it to be in my name though my father was paying the loan, the reason quoted was if the vehicle gets involved in accident then I go to jail & can be bailed out by my father but not vise versa bcoz I was not a tax payee that time.

So you can have ur Dr friend take a loan for u but the vehicle should be in ur name.

enticer86 said:
NOPE

Yeah, whatever is quoted in % terms is by default in p.a. terms, but ur calculations are wrong. One is not supposed to add the rate, coz see the thing is he is paying the principal amount every year as well. So that has to be reduced from the amount of loan taken.

See I didn't understand you question. Pls do tell if u were payin the installment at the beginning of the month or at month end.
According to my calculations:

You paid: 1475*30months = 44250
Loan amount = 31500
Interest paid = 44250-31500 = 12750

I am paying the installment on 5th every month. This is how they calculate
(31500*2.5*18) /100=14175
one emi is free ie ~= 1425
14175-1425=12750
31500+12750=44250
44250/30=1475

ranjan2001 said:
Seems u r taking the loan for the 1st time.
18% Per Annum so if u take a loan for 5 years it will be 18x5=90% of ur total amount in 5 years.

So u take Rs10000/- u will pay 19000/- back in 5 years.

BTW I always failed in my maths class but somehow mangaed to remember that whenever any thing is quoted in % its always per year only by default.

The problem is that if you are paying back the loan after you pay the 1st emi your balance (read: loan amount) should reduce ie the balance loan amount will come to 30765. This you will get when you open the loan amortization sheet in ms excel 2003. So you have to calculate the emi on the reduced balance not 31500. According to excel annual interest rate comes to 28.2%. I got 36% when i calculated with nokia 5610 loan calculator.

So can they charge emi by simple interest rate method or a reducing interest rate method, which is done for 4w loans.

@ranjan2001.....Ok, legal complications, didn't know about it. I wonder if the bank will allow registration of the vehicle in another's name? I have the loan and vehicle in my name, and anyway I'm driving it so no problems.

R

agnels said:
The problem is that if you are paying back the loan after you pay the 1st emi your balance (read: loan amount) should reduce ie the balance loan amount will come to 30765. This you will get when you open the loan amortization sheet in ms excel 2003. So you have to calculate the emi on the reduced balance not 31500. According to excel annual interest rate comes to 28.2%. I got 36% when i calculated with nokia 5610 loan calculator.

So can they charge emi by simple interest rate method or a reducing interest rate method, which is done for 4w loans.

1st understand this
EMI= equated monthly installment
which on the face is equated but internally it consist of principal+interest amount.

The hidden fact in EMI is that its charging more interest & less principal in the begnining as it moves down this ratio keeps reducing & the last EMI will have more principal & less interest.

This is totally in favor of the banks & not in our favor, if you ever default to pay EMI, u will be surprised that according to the bank u need to pay a lot, they wont just ask for EMI, they will ask the EMI principal which is less & interest which is more.

Best thing is whenever u take loan at whatever interest just remember not to listen the marketing talk, .................just ask them flat rate of interest all inclusive of file charge (if any) & service tax, this will give u a clearer picture as to how much u will be paying.

any offer which they quote u as daily reducing is not in ur favor bcoz they know u cant calculate it on daily basis thus its a kind of fleecing the consumer in name of reducing rate of interest.

@ranjan2001
at a flat rate of 18% emi will be greater than at a reducing balance.

R

agnels said:
@ranjan2001
at a flat rate of 18% emi will be greater than at a reducing balance.

Yes true, but the reducing interest 18% emi when asked to be calculated to flat rate will come upto 7-8% flat rate.

Its a marketing gimmick as they know most people don't know head & tail of it & they cant calculate it easily, where as flat rate can easily be calculated.

I even talked to their branch manager who said that they give 2w loans at a flat rate of 18%

The point is they are giving a two wheeler loan at a flat rate of 18% and if you convert that to a reducing rate 18% becomes 28.2%. So most private sector banks advertise loans at 18% which is actually 28.2%. In simple words they are cheating the whole nation. Shouldn't they change the rate advertised as 28.2%

^and also beware of the "recovery agents"(goondas) of these new gen banks like ICICI(#1 fraud),HDFC,CPB(centurion) etc.if u failed to remit the monthly install expect the worst.

I sincerely advice you to get loan from some co-operative banks if such banks are there.

R

agnels said:
The point is they are giving a two wheeler loan at a flat rate of 18% and if you convert that to a reducing rate 18% becomes 28.2%. So most private sector banks advertise loans at 18% which is actually 28.2%. In simple words they are cheating the whole nation. Shouldn't they change the rate advertised as 28.2%

No they are not cheating if they quote flat rate but they are fleecing the customers telling them reducing rates.

Its like they are saying the glass is filled with water which is true, what they are not saying is that the glass is filled only half with water.

If they tell u 18% flat then its fine, but do confirm always
flat rate of interest PA all inclusive (file charge, service tax etc etc)

ICICI Sux, actually all private banks scuk big time. They just do fancy offices, fancy advertising and a lot of other fancy crap with nothing of substance excpet roughing up people.

But why should they charge at a flat rate of 18% when they charge all other loans ex. four wheeler loans at a reducing rate.

Honestly, if you want to take the bike on the loan, it will be calculated on a flat rate. Stop dreaming that somebody is going to change this. if they quote 1% interest per year, it will become 2% on the total loan amount for 2 years and not the reducing amount. The bank is not cheating anyone. If you think they are, then don't take the loan from them, because no one is forcing it down your throat. Besides, the bank is never going to give you the loan, till you agree and sign for all the calculations. That is certainly not called cheating. Also, they tell you the exact amount you need to pay, your interest and your EMI. That is also not cheating.

Solution: You want to take a bike on a loan, then check banks calculation, if you are not satisfied, don't take the loan, nothing more simpler than that! If you still think they are cheating, then you are only letting them do so, coz they always tell you all the details and exact payments.

PS: Private banks and other laws in the country have their own problems. If you think something is misused, don't buy it, or report it!

agnels said:
But why should they charge at a flat rate of 18% when they charge all other loans ex. four wheeler loans at a reducing rate.

Because bikes loans are bike loans and car loans are car loans!