Car is the perfect vehicle for the Indian family. The sales of cars have increased over the last couple of decades at an exponential rate. One of the price reasons behind it is the comfort and safety offered by the vehicle compared to two-wheeler. However, cars are very expensive, and most families in India will not be able to afford buying a car outright in cash. Still, there is no need to panic, as Indian banks, NBFCs, and online lenders offer attractive interest rates and offers on car loan. So, do you know the factors that are important to your car loan or that can affect the interest rate, EMIs, and your ability to repay the loan? Well, one critical factor is the tenure of the car loan.
How is Tenure Important to Car Loan EMI?
Among the factors that would affect the EMI, tenure of the loan rank near the top. An important point to remember is that if you decide to select the maximum tenure possible, then car loan EMI will be low. However, if you decide to select a shorter term then EMI would be larger.
So, a larger tenure would be better, right? Well, no, a larger tenure does have its own set of cons. The most obvious drawback is that overall car loan interest will increase. Therefore, the best thing for you will be to assess the EMI you can afford to pay on a monthly basis without considerably affecting your financial health.
To do so, you will need to do the following things:
- Calculate how much are you left with after expenses.
- Assess whether you have any windfall in the near future.
- Decide whether you want to prepay the loan and reduce the tenure. However, beware as there are prepayment charges that you may have to incur.
Calculate the Best Tenure by Using Car Loan EMI Calculator
While applying for a car loans you will need to assess various factors including the tenure of the loan. Deciding the EMIs that you afford easily should be your first priority. You need to calculate EMIs for your car loan by using different payment tenure. You can calculate the EMIs manually or you can use the EMI Calculator by PaySense to ascertain the amount per EMI. An important aspect that you should consider is that banks may provide a slightly lower amount of interest. However, you need to remember that the approval and documentation process of the banks takes too long. If you are looking for instant loans then look no further than PaySense.
Apply for Loans of upto ₹5 Lakhs easily using your phone or laptop, and pay back on low EMIs