For Tata’s small car Nano, loan can be availed at an interest rate of 14 to 14.75 per cent from the State Bank of India (SBI), India’s largest bank, as per some unofficial reports.

The bank would cover 70 per cent of the price of the car for five year tenure. Recently, general managers of all branches of SBI discussed the finance matters with company’s officials in a bid to provide car finance in easy and hassle free manner, targeting common man in the rural segment of country.

However, the rate of interest would be higher than offered by government sector banks and private lenders. The average auto loans cost between interest rate of 11.5 and 12 per cent from Public Sector banks.

HDFC Bank and ICICI bank currently offer auto loans at 12 to 12.5 per cent and 14.5 per cent respectively, covering finance up to 85 per cent of the price of the car. Meanwhile, company’s official website flooded with a large number of queries from customers, seeking information about finance schemes and prices of various variants of Nano. The small car would be available for Rs 1 lakh as entry level price. However, company may charge Rs 25,000 to Rs 30,000 more for air-conditioned model.

A Tata Motors spokesperson said, “The booking process and other details will be announced on March 23, 2009. In any case, we have said on February 26, 2009. So that prospective customers can conveniently avail of booking facilities at their locations, across the length and breadth of India. Your information on interest rates etc is purely speculative.”