Interest rates on new car loans start from as low as 8.4 per cent and go as high as 12.25 per cent. On a loan of Rs 9 lakh taken for a tenure of five years at 8.4 per cent, the borrower would pay an EMI of Rs 18,422. His total interest cost would be Rs 2,05,292.
If the borrower were to take the same loan at a rate of 12.25 per cent, his EMI would be Rs 20,134. The total interest cost he would pay would be Rs 3,08,033. In other words, his interest burden would rise by as much as Rs 1,02,741. This example underlines the importance of comparing ...
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