Vroom Vroom! This sound drives the Indians Crazzyyy!! Yes, You guessed it right! I am talking about cars. In India, most people view cars as status symbols, and many will go great extents to showcase their status by purchasing the fancy cars even though their pockets doesn’t support. Buying a car with our own savings is fine, but what about buying through a loan?
According to Finance With Pradeep, purchasing a car with a loan and repaying it monthly, might be difficult for many.
As he tells in his video and according to few metrics on google, if you buy a car for 25 lakh rupees with a car loan and a repayment period of 7 years at 12% interest, the total amount to be repaid at the end of the term is 37.07 lakhs. (EMI = 44132/- per month)
If you make a good living, paying that amount is acceptable. However, if you have a mediocre income, paying that amount will be extremely dangerous because you will have to pay it every month for the next seven years. That action will create a havoc on your entire financial situation.
The car’s resale value will depreciate while the amount of interest payable will grow as the time passes.
Instead of getting moved with the fancy cars, hold a while and evaluate your financial position and then decide if you can afford the heavy EMIs or not.
