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Some mistakes investors must avoid in relationship with their brokers
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Planning to take a car loan? Pay the maximum down payment you can afford

This will help you reduce your interest outgo over the total tenure

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car loan

Sanjay Kumar Singh 



car loan

  • Try to limit the loan to an amount such that the EMI does not exceed 15-20 per cent of your take-home salary.
  • Remember that you would have other also and the EMIs of all of them should together not exceed 50 per cent of your take-home salary.
  • The car available within the dealer's premises may not be the most attractive. Scout around for better deals on your own despite pressure from the dealer to take a loan from one of his lender partners.
  • Many public sector banks offer attractive interest rates (see table) starting at below 9 per cent.
  • Pay the maximum down payment you can afford.
  • This will reduce your interest cost over the tenure of the loan. It will also allow you to opt for a lower tenure or lower EMI.
  • Use online tools to compare rates.
  • Keep in mind the foreclosure charge. If it is high, you will have difficulty in closing your loan early.
  • Business owners can deduct the interest paid on a when filing their tax returns. Salaried people do not enjoy this benefit.
  • Sometimes, you can get a better deal if you approach a bank towards the end of the month, when they have their monthly target to meet.


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First Published: Fri, August 02 2019. 07:42 IST

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