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Make sense of car loans with step-up and balloon payments before borrowing

Some decisions aren't about numbers alone. If paying extra interest isn't as important as your safety, there's no harm in going for them. Get a fix on the pitfalls, though

Topics
Coronavirus | car loan | used car loans

Bindisha Sarang  |  Mumbai 



Car loan, CAR

Fear can be a great motivator. In the time of the Covid-19 crisis, many want to avoid public transport and shared vehicles in order to avoid infection. In such a situation, many who are holding on to their money, are going for pre-owned vehicles instead of new ones, just to avoid a higher EMI. But did you know that banks allow you to customise your EMIs? Sahil Arora, Director, Paisabazaar says, "Many lenders have started offering step-up and balloon repayment options to borrowers." Many auto companies have also tied up with lenders to offer different versions of these repayment options, with some even offering a combination of the two. Banks themselves offer EMI repayment options that are custom fit minus the tie-up. While all the offerings vary slightly, the basic principles behind the payment remain the same. It makes EMI and affordable, so understanding the basics is the first step.

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First Published: Fri, September 04 2020. 16:43 IST

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