Nowadays, buying a luxury car is not a daunting task. Car Loans are the best way to for financing your car. But the question that bothers you is how to repay your car loan. Lending Institutions provide numerous methods for repayment of the loan which makes the job easier for a borrower.
Different products from various banks and finance companies offer a variety of options so that you can repay your car loan. Most of the consumers don’t know about the methods available for the loan repayment.
Different Schemes for Loan Repayment are:
- Regular EMI:
The most common and popular option of repayment is regular EMI. In this scheme, a fixed amount of EMI has to be paid every month from the starting of the tenure till the end and the Car Loan Interest Rate is generally low as compared to the other available schemes.
- Step Up EMI:
In Step Up EMI, the amount to be paid as EMI is not fixed and increases gradually, from being lowest in the first month to highest in the last month of the loan tenure.
- Step Down EMI:
It is in complete contrast to Step Up EMI as the amount to be paid as EMI is highest in the first month and gradually decreases to being lowest in the last month of the loan tenure.
- Balloon EMI:
This scheme is for the customers who can periodically repay the large installment on their car loan. It allows customers to repay a fixed amount at periodic intervals, either it is 11-1 or 1-11 for the tenure of 1 year. It means the customer will pay either 11 smaller first and then 1 larger installment or 1 larger first and 11 smaller installments later. The whole calculation is like the structure of a balloon. If you will pay larger EMI first and then smaller EMI, you will earn the profit. But if you will pay smaller first, then larger, you will pay more in the end as compared to the normal loan scheme.
Each consumer has a different set of financial considerations based on which the consumer can find the most suitable option for his car finance. A person must have a thorough knowledge of various opportunities available in the market.
Car Loan is no more a “Pie in the Sky”. These flexible repayment options have made it simple and easy for the customers. You can repay the amount in the way you want.
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