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How to buy a bigger car without breaking the bank

Everyone has a favourite car, and we’re sure you do too. You know the one that’s you’ve dreamt about owning ever since you were a kid. But like most adults, you must have compromised on investing in that high value car you desire due to various reasons; your developing financial responsibility being the most common.

In an ideal scenario, you would walk into the showroom and pay upfront for your long-cherished automobile. But this is seldom feasible, especially if you factor in inflation and your growing needs. You will realise that savings alone won’t suffice. Even if you start putting some money aside only for your car, by the time you have enough saved, you might be mere weeks away from retirement. With this, your ideal choice is to find the middle ground, and opt for a car of a lower value.

But if you had the opportunity to purchase your car now in your prime, wouldn’t you go for it?

Let’s now look at the process of getting a loan and the smart way of managing your EMI. There’s no denying that your financial responsibility increases – but so will your income. In fact, keeping this factor in mind, there will be a huge difference in what you’re comfortable paying today for your EMIs and what you’ll be comfortable with a few years later.

But where can one find a customised plan that accommodates this? Luckily for you, HDFC Bank has a Step-up EMI plan for its loans. What is this plan and how is it different from a regular car loan? Well, when you buy a car with a Step-up Car Loan Scheme, you can start repaying with a lower EMI and gradually increase this EMI amount as the years go by.

Here’s an example of how the calculation of EMI works in a Step-up plan:

Step-up EMI calculation
EMI (in months) % Increase in EMI EMI (INR)
1-12 0 1239
13-24 11% 1375
25-36 11% 1527
37-48 11% 1695
49-60 11% 1881
61-72 11% 2088
73-84 11% 2318

When you compare this with a regular Car Loan, you will notice that the EMI you start with there is considerably higher compared to what the Step-up Scheme offers. So instead of settling for a smaller car on a higher EMI, go ahead and buy your dream car on a comfortable EMI. This EMI amount will increase gradually every year, but only by 11%.

If you still aren’t sure when you should invest in your automobile, here’s a tip: while there’s no right age by which you should achieve this goal, once you feel you are financially comfortable, you can consider opting for a Step-up Car Loan Scheme. Don’t forget you will be paying a lower EMI for the entire first year of your loan tenure. This is a good feeling because you will still have enough money to take care of other expenses.

Buying a high value car is still a dream for most people but it doesn’t have to be so for you. Go get your dream car now!

 

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