Quote:
Originally Posted by airfoil  Over the phone, the executive offered an amount of Rs. 2131 per lac for a 5 year loan, which works out to a flat interest rate of 5.57% on the loan amount. The executive did hint at slightly better deals for those employed in the 'corporate' sector.
I'm not sure if there are other charges that apply, but one EMI is expected up front, which makes the rate slightly higher. |
If EMI is 2131 per lac for 5 years, then interest is 10.13% (you can check using PMT function of Excel). 'Flat rate' is the fancy term, which converts 10.13% to 5.57%.
Normal scenario (EMI per lac):
For 5 year loan, EMI is between 2125-2149 (rate 10 to 10.5%).
For 3 year loan, EMI is between 2076-2112 (rate 9 to 9.75%).
Usually they charge 500-750 as processing/administration fee. This might be waived off during sale & festive season.
Anything above this range is bad deal & anything below is excellent !.
IMO, banks club too many extras into car loan (like insurance policy, free accessories) and jack up the EMI. Work out and go for cheaper option.