Think of buying a car if your Income is 2.5 lakh per annum

SBI, the country’s biggest bank has increased the minimum income requirement for availing a car loan to Rs. 2.5 lakh per annum or Rs. 21,000 per month. This pro-active step has been taken to reduce the raising non-performing assets in auto loan business.

SBI Car Loans has also increased its interest rates in this regard to 12%. This move put a barrier to those who can’t afford to buy the car and repay loans. The new income limit of Rs. 2.5 lakh per annum is considered as safe limit for banks and customers as well.

“The first reaction is to default on auto loans as the interest rates are much lower than personal loans," a senior official in bank’s auto loan sector said.

Bank will also check for additional loan liabilities on customer by due diligence.