In Earlier times, car purchasers had been fully dependant on the loan official. We must be thankful to the various options that we have these days, the loan consultants or lenders have to compete with each other for our car deals. Like, we have the “pre-approved loan” and “loan on phone” kind of options. Banks covet for the customers. This article will facilitate car buyers to get the best EMI on the car loan.
The car finance rates may be sky-scraping. Yet, the car purchaser is the one who gains. Negotiation is the finest trick that an individual can opt for financing a car. You need to brush up on your negotiation skills, and you will be amazed at how the interest rates and car loan EMI reduce considerably. If a finance consultant or agent tells you that the interest rates and EMIs are fixed, inquire the same from the finance manager. You never know, the interest rates and EMI may go down.
Also, remember to do your own research on loan rates. Utilize the EMI calculators that are present on the majority of the car loan websites (http://www.dialabank.com/emi-calculator.cfm). Compute the EMI for the sum of the amount you would have to take as loan. Evaluate the EMIs by browsing as many car-loan websites as you can. It is wise to later lower down the preference to a minimum of five car finance agents who provide the lesser interest rates and EMIs. Don't be pleased, though, that you've got the most excellent car loan deal. You must discuss the lowered interest rates with the finance manager in order to get a reduction in those lowered interest rates. This is because, very little amount saved in margin down-payment and interest rates counts. There are adequate options available for the common man in India to get an auto loan in reasonable terms as long as he knows what to inquire for and evaluate what is being sold.
Assume that you take a car loan of Rs. 1,00,000 for a period of 3 years and EMI of Rs. 3,331, the amount you would pay back at the end of the 3 year period would be Rs. 1,19,916. The additional amount you would have repaid over the principal is Rs 19,916. If you calculate on an annual basis, the same works out to Rs. 6,638 or 6.6 per cent in a period of 1 year. Actually, this is the Flat Rate charged by the loan agency.
The rate is too excellent as it takes for granted the simple interest, which is not suitable for our EMI based loan. The Flat Rate is applicable, if you are permissible to pay only interest in every year’s end for three years and pay back the principal after the period of three years.
The majority of the car loans come with monthly payments in the form of EMIs. Also, these car loans include principal refund and interest rate charges. Your principal terrifically decreases every month, and the monthly interest is computed on this reducing balance. You should notice to it, that you resolve for the lowest EMI, to get the best deal. However, always remember the interest rate.
These days, car finance agents or money lenders offer loan period as long as seven years that naturally results in lowering the EMI. However, this kind of car loans may not be most favorable. You may end up constantly owing more on your car than it's worth. This is because your car is depreciating more rapidly than you're paying back for your loan. You may not even be able to sell your car in the middle without losing money. This results to the down payment penalty too. You will be at an advantage considering a cheaper car than a longer loan.