New Delhi: Everyone dreams of having a car, a house and a good lifestyle. Recent auto sector sales figures also indicate that car sales are gradually increasing after the lockdown.
With the increasing purchasing power, the automobile sector now shows increasing numbers in the times to come. The increasing amount of auto loans also ensures that the car market is now improving.
However people often face a dilemma regarding auto loan or car loan whether to give loan at a fixed rate or floating rate so that EMI does not burn a hole in their pocket.
Benefits of taking car loan on floating rate
At present, the advisory points towards floating rate for car loan or auto loan. We are saying this because there has been a fall in interest rates recently and there is a possibility of further fall in interest rates.
daily reducing balance loan
In any daily reducing balance, interest is charged on the balance at the end of that day and is set for the entire month. That’s why you are asked to pay the EMI of your loan at the beginning of the month itself, which gradually becomes beneficial. If you pay your EMIs on the last days of the month, it can have a negative impact on your loan installment.
It can be understood with an example that the EMI of 31 days month will be less as compared to February as it has fewer days. Since we are currently in the phase of declining interest rates, it is advisable for you to take a floating rate loan as compared to a fixed loan.
Car Loan Information:
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