Planning to take a car loan? Here're the rates and charges offered by banks

Increasing the loan tenure reduces EMI burden but enhances interest outgo

Do not stretch yourself excessively when taking a car loan. This could adversely affect your ability to meet your regular expenses, savings and investments. Be more cautious, if you have other equated monthly instalments (EMIs)

• Borrowing excessively could increase the chance of a default, which would in turn hurt your credit score, and hence your ability to borrow in future

• Make a considerable down payment and reduce the loan amount

• Suppose you take a loan of Rs 10 lakh at an interest rate of 8.9 per cent, and for a tenure of three years

• In this case your EMI will be Rs 31,753, and the total interest you pay will be Rs 1,43,116

• Now suppose that for the same loan amount and interest rate, you enhance the tenure to five years. The EMI will fall to Rs 20,710. But, the interest over the loan tenure will rise to Rs 2,42,591

• Opt for as short a loan tenure as possible

• Thus, although the monthly burden falls when you increase the tenure, your interest outgo rises 1.7 times