Car Loan: Diwali is a season of celebrations, lights, and new beginnings. For many families it’s also the time to bring home a brand-new car. And why not? A new car during Diwali feels auspicious and most dealerships offer attractive deals. But here’s the truth while discounts and offers look tempting, the real game lies in the car loan you choose. One wrong step and the dream ride can easily turn into a burden. So, if you’re planning to take a loan for your car this festive season let’s talk like friends and go through the things you should definitely keep in mind.
Interest Rate Matters More Than the Discount
Banks advertise easy loans all the time, but the fine print hides the reality. Currently, car loan interest rates range from 8.5% to 11% per annum, depending on your profile and CIBIL score. Even a small difference in interest rate changes your EMI drastically. Imagine two people buying the same ₹10 lakh car
Read more: PNB Personal Loan: ₹27 Lakh Loan EMI & Salary Requirement Explained
| Loan Amount | Tenure | Interest Rate | EMI (Approx) | Total Interest |
|---|---|---|---|---|
| ₹10,00,000 | 5 Years | 8.5% | ₹20,492 | ₹2,29,520 |
| ₹10,00,000 | 5 Years | 10.5% | ₹21,493 | ₹2,89,580 |
See the difference? Just because of a 2% higher interest, the second person ends up paying ₹60,000 extra that’s more than the festive discount most showrooms give.
Decide the Tenure Wisely
Most people stretch the tenure to keep EMIs small, but here’s the trap longer tenure means you pay a lot more in total. A 7-year loan may look comfortable at ₹15,000 EMI, but you’ll pay much more in interest compared to a 3 or 5-year loan. If your salary allows, it’s smarter to keep the tenure short. A little sacrifice today saves a big chunk tomorrow.
Down Payment The More, The Better
Another mistake people make is paying a small down payment. Remember, the lesser you borrow, the smaller the EMI and the lower the interest. If you can arrange 30–40% as down payment, your loan burden reduces drastically. Think of it this way a bigger down payment is like giving your car a head start the road ahead becomes smoother.
Check Your CIBIL Score First
Before you step into the showroom, check your CIBIL score. A score above 750 usually gets you the best interest rate. Lower score means the bank either rejects your loan or charges you higher interest. It’s like credit history is your resume the cleaner it looks, the better offer you get.
Hidden Charges Can Bite
Processing fees, insurance bundling, and mandatory add-ons often increase the real cost of the car loan. Always ask the bank and the dealer for a breakup of every single rupee. That small fee on paper can add thousands to your EMI.
Conclusion
Buying a car this Diwali with a loan can be a joyful decision if planned carefully. Compare interest rates, choose tenure wisely, make a bigger down payment if possible, and don’t ignore hidden charges. A little homework before signing the loan papers ensures your new car brings only happiness not financial stress.
Disclaimer
This article is only for educational and general knowledge purposes. Car loan rates, eligibility, and terms may vary depending on the bank and your personal profile. Please verify details with your bank or financial advisor before applying for a car loan.
