Before taking a car loan, know the rule of 20/4/10, otherwise you may incur loss
Car Loan Rules: You can take the help of a bank to buy your dream car. You can buy the car of your choice by taking a car loan from the bank, but before taking a car loan, you should know well about all the terms and conditions related to it. So that you do not have to face any kind of problem later-
Digital Desk- New Delhi: In today's time, everyone wants to buy their dream car. For this, many times he forgets to look at his budget, due to which he has to face financial problems later.
In such a situation, it becomes important to know the best rules of the market while buying a car. It is often seen that customers buy expensive cars with the help of a loan.
And then their condition becomes worse while paying its EMI. Sometimes they even have to take a loan. In such a situation, you should know about the 20/4/10 rule while buying a car.
What is the 20/4/10 rule?
20% Down Payment: At least 20% of the car price should be made as a down payment. This reduces your interest and financial stress by reducing the loan amount for your car.
4 Loan tenure: The loan tenure for a car should be limited to 4 years (48 months) . This helps you take care of the interest till the end of the loan and saves you from paying interest over a longer period.
10% of monthly income: The maximum annual and monthly payment on a car loan should be limited to a maximum of 10% of your monthly income. This will allow you to repay the loan while keeping your financial position stable.
keep this in mind
Experts believe that most people want to have a shiny SUV car. It is also true that new car buyers in the country are purchasing SUVs in large numbers.
However, you need to be practical for a new car. Because when a customer buys a new car keeping his budget and car maintenance in mind, he does not face any problem in the future.
He says that petrol cars are cheaper than diesel cars. However, the price of petrol in the market is higher than diesel. The maintenance of a petrol car is less, while the maintenance of a diesel car costs more.