Target Nano buyers may fail lending test

New cars  13-14% Two-wheelers18-19% Used cars22% Nano (expeted)18-19%   Banks are also keen on providing finance to those who previously owned a car and are planning to buy used cars for Rs 1.3-1.5 lakh and also to those who had never bought a car despite having the resources.  While lending rates to finance Nano will be definitely higher than those for any other regular car models, say bankers, loans will be provided on a prerequisite basis by finely scrutinising the borrower's financial condition. Such reassessment was seldom undertaken earlier for any automotive product.  Private and state-owned financing firms are upbeat on the launch of the Nano as it opens up a completely new segment, bridging the gap between a two-wheeler and a conventional car in pricing terms. The car will generate a large business portfolio, believe the country's leading financiers.  Most finance companies are awaiting the final price of the car, which will only be unveiled at the time of its commercial launch in October, to design a typical finance package.  Although no final word is exchanged on the interest rate, it is an issue that has been impacting vehicle sales for the last few months. Banking officials agree that it will be higher than other cars, which are priced at least twice the Nano's rate.  An official from another bank said, "Nano is not a regular product. Although we are upbeat about financing it, we will not rush into it. The pattern of buyers will be largely similar to that of two-wheeler buyers. We will have to consider all the elements before deciding on the finance."  "We are ready to fund about 85 per cent of the total value of the product, but the loan-to-value (LTV) ratio may be reduced," the official added. Tata Motors has promised to sell the Nano at Rs 1 lakh (excluding VAT and transportation charges), making it the world's cheapest car. The final price to the customer (the on-road price) will, however, be closer to Rs 1.3 lakh, including excise duty, insurance and road tax.  The company will commence trial production shortly while the booking is likely to open in September.