An automobile loan has become a common way to purchase a car as it dispersed the overall amount into smaller chunks of convenient monthly instalments. The most essential aspect to remember is that you don’t have to spend all your savings to purchase a car, you can have 30% as a down payment, and the remaining amount you can opt for as a regular loan. Besides this, the online presence of the financing sector has also put some positive impact on such a loan among the people.
Repayment can be defined as the casual payment that a consumer has to do to fulfil their vehicle loan. Various methods are live in the market to repay the debt amount taken from the bank in form of regular EMI, step-up EMI, and step-down EMI. To use all the repayment options conveniently, the borrower should know the pros and cons of every method. You can also know the exact amount of monthly EMI by using the car loan EMI calculator online.
Four-wheeler loan repayment types
Below are prescribed the 6 regularly used automobile loan repayment method:
Regular EMI:- This is the most convenient repayment method used, as you have to fix a monthly instalment based on the defined tenure and the interest rate. You can pay regular EMI either at the start or end of the month.
Step-down EMI:- It is a type of repayment method where the EMI generally decreases from more to few. This reduction in the EMI can be done based on the number of successful payments achieved.
Step-up EMI:- It is a category of repayment method where the initial EMI is charged fewer and gradually increases based on the prospect income. However, the EMI change can happen two times during the overall loan duration.
Special bond method:- Sometimes, there has been an agreement signed between the bank/NBFC and a consumer in a way that when the funds are in excess. This acts as an advantage to the borrower as there is a reduction in the interest rate.
Balloon EMI:- In this kind of repayment method borrowers are allowed to pay a huge sum of the amount at the end of the repayment tenure. This method helps in reducing the starting loan repayment burden from the consumer.
Four-wheeler repayment schedule:-
A four-wheeler repayment schedule will show how your EMIs are used to pay the loan every month. A four-wheeler repayment schedule will provide you with the information about the EMIs, interest rate, and also interest declines on monthly basis because of EMI payments. To make a four-wheeler repayment always try to calculate your monthly instalments over the internet.
Repayment is one of the most crucial features to consider while going for an automobile loan. If the consumer shows a rigid repayment, then there are changes in the form of an increase in the CIBIL score. Tamilnad Mercantile Bank Car Loan has a decent repayment procedure.
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