Tata Nano Car Loan: It's going to be costly

The world's most eagerly awaited car, Tata Nano, is set to be introduced in the market on the coming March 23rd. Not just India, the entire world is eagerly waiting the People's Car. I happen to visit US recently, and while going from the airport to the hotel, I got into conversation with the cab driver who happened to be from Africa. He mentioned that even in his country infact the entire African continent, they are eagerly awiaiting for Nano, as a fuel efficient, high performing, small family car.

Now that is something that proves how a small car has created ripples across the globe. After so much ho-hum, protest in West bengal and shift to Gujarat, the Nano will finally be rolled out. Many Indians are waiting to book the car as soon as it is avaiable. But is it going to be easy? Let's see some of the news as reported on various sources.

What is the booking procedure for Tata Nano Car
Well. That may be a surprise for most. The Tata Nano Car will have to be booked by filling a form! Yes - like you do for an exam. And the form will cost you 300 Rs. This is the first time ever an automobile or car is going to be booked through a form that too with a payable amount. However, if the Tata Nano Car is not allotted to you, then your 300 bucks will be refunded. It is not clear whether the 300 Rs. be given back or adjusted to your total car price if you are allotted one.

What are the variants of Tata Nano Car?
The Tata Nano Car is to be introduced in 3 variants - Basic, CX and LX and the price and facilities will increase in that order. Basic one will have only non-metallic colors, while other 2 high end models will have more variety of colors. Then comes other things like AC, etc. There is no music system provided in any version, but there are slots made available, so one can buy seperately and get it fitted. Body coloured bumbers are available only in the top end model.

What is the Car loan scheme for Tata Nano Car
That's where it gets worse for individuals looking for a real cheap economic small car. The house loan is NOT going to be cheap. You will end up paying much more if you buy Tata Nano Car on Car Loan. As per the recent news on CNBC, State Bank of India is offering Tata Nano Car Loan at a high interest rate as compared to Car loans for other cars. The car loan usually ranges with interest rates 12-13% but for Tata Nano Car, it is a whopping 14.5 to 14.75%. That's right, the Tata Nano Car loan interest rate from SBI may range from 14% to 14.75%.

What is the interest rate for Tata Nano Car Loan?
What is much worse is that these 14% to 14.75% interest rates are the expected rates from PSU or Government Banks. The Tata Nano car loan interest rates from other private banks are expected to be 2-3% higher than this, i.e. it may be in the range of 16%-18%.

So interest rates are higher. How much will this Tata Nano Car loan cost me?
Assuming you take a 5 year car loan for Tata Nano Car, then as per CNBC, the interest you pay may be in excess of 30,000 Rs. So the Tata Nano Car will really become coslty if you go at that interest rate.
Then, that's not all. You will not get the usual 80-85% of the car price as loan. For Tata Nano Car, the car loan is available only at 70% level. That in a way is good beacuse you will take less loan amount. But bad if you dont have money to pay from your own pocket.
So, the small economical people's car Tata Nano will be really economical and cheap only if bought on cash, not on car loan