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Car Loans - A balance between Down Payment and EMIs

06 Jun, 2012 By:admin in Car Loan,

A car is a prized possession and counts second (after home) as the highest paid purchase of a person. Buying a car is no longer a forte of the elite class, there has been a significant rise in car purchasing amongst the middle class in the past few years. Availability of auto loans with reasonable interest rates has played a pivotal role in the booming auto industry in India. Those who are planning to buy a car in the near future should consider some important factors regarding auto loans.  
Budget Estimation : 
Whether it's an Aston Martin, Maybach from Mercedes Benz, Hyundai Santro or Chevrolet Spark, one can buy any specific car he has his eye set on, only if he has his budget calculated. When shopping for cars, most people begin with selecting the car first and then realizing that they can't really afford it. Shopping begins with considering one's needs, likes and usage. Afterwards, an estimation of the amount of money at hand and the amount required to be borrowed comes into play. 
Down Payment :
Purchasing a good car with full payment is next to impossible. Therefore, options of a down payment and convenient EMIs are offered to buyers. Making a substantial down payment is important to keep one from paying more than the car's worth. The minimum down payment for any vehicle varies from one car manufacturer to another. The key is to up the down payment. Calculate the payment in a manner that the buyer gets to witness some positive equity in about two years. It's important to make the EMI term as short as possible. 
EMI Calculation :
The buyer, after consulting the car dealer, should make use of EMI calculators that are available on pretty much all the auto loan websites. These EMI calculators give the buyers an estimation of the monthly payments, total amount with interest, total interest amount, yearly interest amount and flat interest rate per month based on the interest rates, loan amount and loan tenure.  
Interest Rates :
Interest rate is also a decisive aspect of buying a vehicle. A good amount of effort is required on the buyer's part here as he will have to check the interest rates on offer by various institutions. Visiting websites of various lenders is the convenient option as he can compare them with ease. One must check with at least five different lenders and go with one that offers minimum interest rates as well as lowest EMIs. 
Valuable Consideration :
When it comes to loan tenures, financing institutions may offer periods as long as 10 years which normally lowers the EMIs. One should not be fooled by such misleading circulations. A less expensive car is way better than longer loan tenure. Having to pay for such a long time will lead one to pay more than the car is worth and he won't even be able to sell it halfway without losing any money. Therefore, one must consider down payment, EMIs and loan tenure before making a purchase. 

A car is a prized possession and counts second (after home) as the highest paid purchase of a person. Buying a car is no longer a forte of the elite class, there has been a significant rise in car purchasing amongst the middle class in the past few years. Availability of auto loans with reasonable interest rates has played a pivotal role in the booming auto industry in India. Those who are planning to buy a car in the near future should consider some important factors regarding auto loans.  

Budget Estimation : 

Whether it's an Aston Martin, Maybach from Mercedes Benz, Hyundai Santro or Chevrolet Spark, one can buy any specific car he has his eye set on, only if he has his budget calculated. When shopping for cars, most people begin with selecting the car first and then realizing that they can't really afford it. Shopping begins with considering one's needs, likes and usage. Afterwards, an estimation of the amount of money at hand and the amount required to be borrowed comes into play. 

Down Payment :

Purchasing a good car with full payment is next to impossible. Therefore, options of a down payment and convenient EMIs are offered to buyers. Making a substantial down payment is important to keep one from paying more than the car's worth. The minimum down payment for any vehicle varies from one car manufacturer to another. The key is to up the down payment. Calculate the payment in a manner that the buyer gets to witness some positive equity in about two years. It's important to make the EMI term as short as possible. 

EMI Calculation :

The buyer, after consulting the car dealer, should make use of EMI calculators that are available on pretty much all the auto loan websites. These EMI calculators give the buyers an estimation of the monthly payments, total amount with interest, total interest amount, yearly interest amount and flat interest rate per month based on the interest rates, loan amount and loan tenure.  

Interest Rates :

Interest rate is also a decisive aspect of buying a vehicle. A good amount of effort is required on the buyer's part here as he will have to check the interest rates on offer by various institutions. Visiting websites of various lenders is the convenient option as he can compare them with ease. One must check with at least five different lenders and go with one that offers minimum interest rates as well as lowest EMIs. 

Valuable Consideration :

When it comes to loan tenures, financing institutions may offer periods as long as 10 years which normally lowers the EMIs. One should not be fooled by such misleading circulations. A less expensive car is way better than longer loan tenure. Having to pay for such a long time will lead one to pay more than the car is worth and he won't even be able to sell it halfway without losing any money. Therefore, one must consider down payment, EMIs and loan tenure before making a purchase. 

Comment:(1)
on 03 Jul, 2016

Looks like Zillow made some change in their Zestimate algorithm which made the numbers yet more random and rilduuiocs. Or maybe it got hacked by NAR.

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