Quote:
Originally Posted by JustStarted  Hi,
i am total newbie to car and car loans. HDFC has quoted me EMI 6885 @14.5% for 36 months for sum of 2 Lac.
means total i pay around 2.48 Lac in 3 year.
now if i put this amount in Fixed Deposit at 10%
after 3 yrs i get around 2.68 Lac.
means its profitable to take loan.
but in this case where butter and bread for banks ? i know i am missing something here.
can someone please point it out ?
Thanks |
The loan is on monthly reducing principal. Had u being paying lumpsum for ur loan at the end of 3 years then the amount would be paying would have been more than that earned with FD.
For the EMI amount that u are paying for the first month., u would be looking interest for remaining 35months...
so you should compare your Rs. 2Lac FD as 36 fds of Rs. 5555.55 which mature at the end of 1,2,3,...35,36 months u will find that the total outflow as per to EMI is more than the money u are earning by FDs.