Never take more than 30% of car price as loan. Put in as much money as you can because the car is not an asset. It depreciates quickly. New car new model comes... your car value goes down. Never go behind features because many of them we don't use. Engine power, basic facilities, air bags, low maintenance, decent mileage and good AC.
You calculated the interest considering the EMI of Rs.16013 but if you consider it for a 3 years period the EMI @ 8.85% p.a. works out at Rs.31730/-. If a person avails a loan for a term of 7 years and instead of paying stipulated EMI of Rs.16013/- he keeps on paying Rs.31730/- p.m. his loan will be closed exactly at the end of 3 years with actual interest charge of 8.85%. Interest is charged on the outstanding balance of the loan. Even in your cited example if you calculate the interest on the outstanding balance at the end of every month, you will find that interest is charged @ 8.85%. Get the facts verified from your chartered accountant & delete the video as it is misleading. It is an advice from one of your regular viewers.
Absolutely love your clarity, Sir, absolutely. Your grasp on this topic is fantastic. Personally I have never ever purchased a car on loan. But this helps in talking to my friends about not getting in debt.
Never buy tata car , first time buyer need to be very alert from trapping in specifications feature game which is explained by Tata showroom salesperson. Use your brain.... Low fuel economy, frequent repair , low resale value, high maintenance, delay in spares availability, poor customer service and many more are key features and specifications of Tata motors. Take feedback from old Tata customer they never buy again
Hi sir, I doubt what you have informed.. when you do part payment it direcrly deducts the total prinicipal amount rather than going towards interest first. If what you are saying is correct, then the whole concept of part payment or prepayment or foreclosure doesnt make any sense. This wouldnt have been there if we are going to pay the interest. That would be foolish like you said. I guess when you do part payment you prinicipal/outstanding reduces which eventually reduces your total tenure. I read this from TOI, policy bazar and few other articles.
I am a bit confused as well. but I think he meant that if loan tenure if 5 years and you paid all the emis for first 2 years then whatever total intrest you would have eventually given is already given in first two years because in initial period most of the portions of your emi goes to interest and very less amount goes to base loan amount. so there is no point in closing the loan after two years because you’re intrest is already paid and almost all of the emi is going to your principal amount. let me know your thoughts.
If I’m taking a loan with longer duration say 7 years to have lower emi, then foreclose it within 3 years, the overall net interest will be lower than continuing it for 7 years. You should not only see it from a interest rate perspective, you should also consider the net interest paid. I’m sure if you calculate, continuing a 7 years loan will not be better than foreclosure. After 3 years, you can use the emi amount to invest in different instrument and that can anyway cover the interest paid during 3 years.. I think your approach is one directional, but it was a food for thought 😊
@@avinya151 didn’t get your point. What I’m trying to say is, you compare the net interest paid in both cases and then decide. Just don’t look at from interest rate perspective
Rather invest that money in something that will give you a return that is higher than the remaining interest on your emi! Paying back a loan in the way you mention is not the best sound advice (unless you just wanna remove the pressure of emi payments and are willing to pay a premium for that mental peace)! Paying back the loan in 3 years is never gainful if you put future value into perspective.
That's very stupid, if u know u can payback in 3 yrs then wait for 3 yrs. Unless u got jackpot lottery and now u have money at dispersal that's ok. Best is calculate the emi by years. For cars generally emi term is 5yrs, beyond that it's higher interest . Similarly for home loan 20yrs is sweetspot.
@@techcloud2510in 3 years car price will be increased with the amount you pay in interest on your current loan so taking loan is somehow beneficial as you also get car for that 3 years 😊
Very pertinent video. I recently bought a Grand Vitara. Out of 17 lakhs, I made a downpayment of 10 lakhs. For the remaining 7 lakhs I wanted a loan of 1 year. Yes one year. All banks flatly refused, PSU banks said minimum tenure is 2 yrs, while pvt banks said min tenure is 3 yrs. Afyer lot of haggling I managed to get a 2 yr loan from ICICI but they charged me 0.2% higher than a 3 yr loan. Still I saved substantial interest cost. Loan should be of min tenure even if the EMI hits u hard. After few EMIs u get adjusted to the new montly expense and u dont feel the burden so much.
Just because of the sheer paperwork that is involved. My last car loan was from SBI and it was quite a hassle. On the other hand I had a pre approved loan from a pvt Bank and all I did was make a call and sign the loan agreement. There is one more reason. My new car arrived at the dealership much earlier than expected and I didn't want to leave the car with them more than 1-2 days.
Thank u sirji.. Ye influencer ko dekh dekh k new car soch rha ta lene ko.. Wagonr 2016 model chala rha hu.. 80K hi chali h bs.. Ab isi ko chalaunga.. Till 15yrs..EOL of the car
I might sound dumb here but when ever you get more money if you put it to the loan account, principle will be reduced and the monthly interest is calculated on the outstanding amount so i dont think the 13% caluclation is right. And emi is compulsory and if you take shorter term and fail to pay the emi then they will charge you, and u can make as much as repayment in state bank without any fee unlike personal loan. But yes pre closure charges are there if you close the loan before 2 years.
You are absolutely right, actually, he didn't understand the calculation. Most of the people have just gone as he explained. As long as the interest rate is the same and the interest is charged at the outstanding amount, it's always wise to pay less if you can make a return at more than the loan interest rate.😂
Keeping EMI minimum reduce compulsory obligation and one can pay every month extra amount if one can pay higher EMI. This will effectively reduce tenure and also with no fear of penalty in case of emergency. But loan shoykd be from Sarkari Bank. 😊
Property is appreciating asset ...so all calculation is different... People are able to afford house on loan ... In addition there is tax benefit on home loan
Floating is fine, but make sure to check on the interest on regular periods. This is typically something useful for home loans which runs for 15-20 years, some people prefer a fixed interest rate than a floating one.
The best is to lease the car .... No insurance , no service charges, all ... Use your capital to grow your investment and interest earned as monthly car expenses...
My old car SX4 2010 was 2010 model was as good as new kept it like my baby but only due to the govt shitty 15 years rule I had to let it go. Purana 100 din sarkar rakhne kahan de rahi hai, they are forcing people to buy new cars on loan. 15 saal ka rule band ho jae toh there will be a drastic fall in car sales.
The information is good for knowledge. But before going as per advice just consider the amount as per part or preclosure payment and then paying till last EMI. If you are closing the loan in between. You can still use the rest of the EMI for your other financial needs.
👌Very true information. I regularly watch ur video as till date I don't own any car. Now this festive season, I m planning to buy my very first car - may be Ignis Alpha (MT)..........if I could snatch maximum discount offer Otherwise I will have to go for its Zeta (MT). I don't want to take any kind of loan but to buy totally in Cash. Tentative my monthly driving would be 1000 kms and mostly in city. Once again, a big TQ to Mycarhelpline team for making good informative videos.👍
Ek number aadmi ho aap.. achhi achhi insights dete ho.. keep up the good work.. may u reach 1M subscribers soon bro ❤😊 I took car loan of ₹6,70000 recently for EMI 10,800 from BOB at 9.30% for 7 years. I should continue till 7 years and should not foreclose even if i have the amount right?
Pls help me with calculation. Federal bank loan 10% interest for 5 lakhs. I calculated 500000+ interest 137411 = total 637411 rupees. This i got it online. Not sure if i am right.
I respect the feeling of this gentleman, but the best way mathematically to get rid of a loan with cheapest interest rate and least risk is increasing tenure and paying upfront as much as you can. Obviously without pre-payment charges or tenure fee.
Mera problem hai jab bhe me loan lene gaya hu cars ke liye humesha flat interest he deta hai indusind... Mujhe loan reducing me chahiye.. Ye indusind reducing provide karta hai dikhata toh hai search karne pr..
So when you try to make additional payments towards the car loan (through bonuses etc) then why don't you pay towards remaining principal.. in other words, principal only payment? In that case, interest will only count towards remaining principal. Is that allowed in banks?
Any loan without foreclosure charges should be closed if you get the funds on your hands. Just because you paid higher interest in the initial period, does not mean you have paid at a higher interest rate. That logic is wrong. EMI ka working gaur se samjhoge to obviously initially interest portion will be more because installment amount has to remain same throughout the tenure. Waisa nahi chahiye to check if you get an option to keep principal repayment fixed, that way you are repaying fixed principal and whatever interest has accrued for that month. In that case aapka EMI amount Kam hota jayega because your interest amount will keep decreasing as you repay the principal. The point you are making is right that loan utna hi lo jitna EMI afford kr pao. But you logic does not seem correct. Also, itna filmy tareeke se kyu bol rhe ho yaar, normal baat karo na.
Apko analysis galat hai boss.....Interest component is not either charged more or less that actual payable, in the beginning or towards end. Interest calculation in amortization is the eact interst amount payable on the banks money that you have loaned upto the emi date. So, naturally, when towards the end the principal is much less than begining (because you have paid in emi some part of it) your interest amount at later stage is less. koi bhi bank apse EMI mein 1 rupee bhi extra interest nahi le sakta. Itna confidence apne analysis pe ki video bana di???? hahaha
Good advice but your calculation is slightly inaccurate. If you are planning to part pay on the principal amount every few months , it wouldn't cost you much. Foreclosing at later years is obviously stupidity but if you are consistently doing part payments every few months then it won't be a bad decision since you are reducing your princple, so the interest would be charged on reduced principle amount
Well I don't know your degree but you are making a blunder here. Lowering the EMI and Making Extra Payment to bank to reduce principle amount then you interest also reduces because you are calculating on flat interest of principle amount not on reducing amount. Don't fool 5 lakh peoples. Yes taking Long loan is wrong but Managing Loan Payment is equally required if your EMI is 17000 and and if you make an extra 10000 payment reducing your principle amount then you interest payed is low but as you tenure of loan is getting small interest according to tenure will be high (13% 16%) but on other hand you are closing loan in 3 or within 3 years. Hope so you understand reducing amount loan Eventually you will save 4 years of interest.
To add to what the author of the video mentioned, if you do get the money that is enough to close the loan, instead of using it to actually close the loan, invest it in something safe that will provide you with enough returns that is higher than the interest component that is left on the loan!
New car ka depression jaldi lagta hai ager purana car chalienge to per month 1500 rupes oi new car 1700ki karib...lagbag 1.5 k profit .... calculat it 5years u will buy a 1 more second hand car infuter after five years if u buy a second hand car
From 1:15 aap jo samjha rahe ho.... Emi 16000 ka hai for 7 years.... Jab aap 2 years mai convert karke dikhate ho tab emi dikha rahi hai 48000 Tho jo diffence emi 32000 per month ka aa raha hai woh bhi tho aap utilise kar rahe ho naa.... Aapne sirf interest ka dikha diya...
Great knowledge helping us to make a better solution. Loan is always dangerous as we are not just paying the % interest but other amount also to earn that money which is always more than the actual amount+30% of actual amount, which we pay in income tax.
Bhai log agar tum 10% par paise leke 30% ka return nahi le rehe toh tum service class ho. Service class ke pass 1cr bhi ho toh woh service class hi hai. Loan lo 10% par return generate karo 30% par. But but but without risk. Mein karta hoon 30% par
Sir, I have previously taken terrible loans and foreclosed on a few of those loans. The fact that in the monthly EMI of a loan, "Interest" paid in the initial months is more than the 'Principal amount' is Terrifying, Heart-Breaking and Eye-opening. I never knew this before. Now I understand that the foreclosure of a Loan is a significant loss to the customer and a big profit to the Bank. Sir, your content is Excellent; the information is precious, and how you explain things is mind-blowing. Superb👍👍👍. I loved it❤. Sir, today, I promise you that I will never retake a loan. I will buy things only when I can afford them. It's my promise. You changed my Life, Sir. Thank you so much, Sir. I will always be grateful.
I think your calculations are wrong here. For a small loan like for a car and small duration the interest part in the emi is actually pretty low. Foreclosure will actually end up in less interest paid. Also extra emi will bring the loan tenure down. But will also bring down the extra emi we will be paying towards the loan with reducing principle and tenure. Foreclosure charges are also very minimal and sometimes even free with the clause that no prepayment is done in the initial 3-6 months. Every loan carries the same principle. Be it for house or a car
Private loans will take interest even if fore closed. But govt Bank don't do it. If you pay more loan will close early. And interest is always on outstanding.
Still, I personally don't feel like to give all my money to dealer and get short hand of cash. Better involve bank's money, repay in EMI and let your back support be with you. Once you got a slot to part pay or foreclosure then do it.
It depends . If you are paying 9% interest vs if you can get more than 9% investing same money in other business , then take loan . Also you missed the other point , sometimes loan is the only option to buy asset and people need car or home at any cost and they cant wait to earn that money .
Humbly Disagree on few points. Ppl take car loan bcoz they don't have upfront cash of 8-12L. Many ppl expect some bonuses which helps them to prepay car loan. Instead of fixed rate, we can check for floating rate loans where prepayment doent pinch. Secondly u mentioned car prize should not be more than annual income. This is too high. Ppl take home loans worth 2-3x of annual income tobhave comfortable EMI and rest is paid as cash. Personal finance rules suggests Car should not be more than 1/3 of annual income. Or 10% of total network.
Can you correct me if I am wrong, Amortization schedule has an interest component higher in initial EMI's because loan outstanding is high, interest is always calculated basis the rate of interest, if my interest rate is 8.5% the interest amount I will pay in my initial EMI's or my late EMI's interest rate would be 8.5 only
