Auto Loan: Buying a car is a dream of many people today. Most of the companies keep launching some new model in the coming days, due to which the craze has increased more about the new vehicle. However, the dream of buying a car for many people, especially those employed, is not fulfilled without a bank loan. Generally, the buyer keeps the auto loan repayment period from 5 years to 7 years. But, do you know how much interest you pay in these 5-7 years over the cost of the loan. Many banks are charging 8 to 9 percent interest on car loans. That is, if you take 8 lakh loan, then 2.5 to 3 lakh more may have to be given as interest. But you can reduce the loss due to this interest in an easy way. Know full report….
Total loan: 8 lakh rupees
Total duration: 7 years or 84 months
Interest on loan: 8%
Monthly EMI: Rs 12469
Total interest: Rs 2,47,396
Total payment: Rs 10,47,396
Here calculus has been done on loan of 8 lakh for 7 years. In this way, the actual cost of a car worth Rs 8 lakh is Rs 10,47,396. You have to pay Rs 2,47,396 as interest to the bank. Auto loan has been calculated on the basis of SBI’s current interest rate of 8 percent. Changes in interest rates are possible.
Reduce losses with SIP
As soon as EMI starts, if you start only 25% SIP of one month installment, then after 7 years, the interest burden on bank loan can be reduced. For this, the choice of an equity diversified fund can be a better option. There are many good funds, in which SIP has yielded a rate of 12 to 15 per cent per annum in 8 to 10 years.
Understand the complete calculation here… ..
On the loan for 7 years of 8 lakh above, EMI of Rs 12469 is coming every month.
25% of the value of EMI: around Rs. 3000 here Monthly SIP: Rs. 3000
SIP duration: 7 years
Estimated Return: 12%
SIP Value at Maturity: Rs 4 Lakh
Total investment in SIP: Rs 252000
Total benefit: Rs 148000
Here, you are getting a profit of 1.48 lakhs by removing the principal invested in SIP. While the interest on auto loan was Rs 2,47,396. In this way, you can reduce the loss of about 1.5 lakhs on interest only during the period of EMI.
(Note: BPN based on interaction with Fincap’s director AK Nigam)