Interest rate depends on Car model, Loan Tenure, Customer and Location. Interest is calculated based on two different methods
• Reducing Balance.
• Flat Rate.
The effective interest rate is higher in ‘Flat Rate' calculation because the principal does not get adjusted with EMI.
EMI stands for Equated Monthly Installments. This installment comprises both principal and interest components. Your EMI would be calculated depending on the tenor you choose, to repay your loan. The EMI would be higher if you choose to repay within a shorter period as against a longer-term loan.
You can use our EMI calculator to determine how much you would be required to pay, based on the tenor and the amount of the loan.
Total financing costs:
Apart from knowing how the interest rate is calculated, it is important to understand the impact of upfront payments on the total financing cost. This includes the impact of processing costs as well as that of advance payment of EMIs in particular schemes. Processing fee is a one-time charge taken for processing and legal paperwork. It is in the range of 1-3 % of the loan and has to be paid upfront to the company.
