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No Interest On Car Loan! Banks Don't Want You To Know This Trick
Car Loan Interest Saving Strategy: No, you will never get an interest-free car loan, as lending money is one of the major revenue sources for banks. However, with some clever planning, you can offset the interest you pay. This strategy involves a little patience and thoughtful investment.
Car Loan And Interest
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Car Loan And Interest: According to Axis Bank’s loan calculator, if you take a car loan of Rs 5,00,000 at an 8% interest rate for a five-year tenure, you will be paying a total interest of Rs 1,08,292.
EMIs
EMIs: Your EMI will come out to be Rs 10,138. So, you’ll need to pay around Rs 10,000 each month for five years to repay the loan. Now, let’s move on to the strategy.
Invest In SIP
Invest In SIP: The strategy is simple; as soon as you take the car loan, start a SIP (Systematic Investment Plan) and continue it for at least the duration of your car loan.
SIP
SIP: Suppose you invest Rs 5,000/month in a SIP for five years and earn a return of 14% (which is common in long-term investment), according to Groww’s SIP calculator, you’ll receive a return of Rs 1.36 lakh in total.
Return
Return: This is approximately Rs 28,000 more than the interest you’d pay on your car loan. However, keep in mind that this is subject to market risks.
In Simple Words
In Simple Words: You should start a SIP when you take out a car loan. Calculate the loan amount and invest accordingly in the SIP so that the returns from your SIP can cover the interest paid on the loan.
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