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POSTED BY ON July 17, 2014 10:51 pm COMMENTS (5)
Hi Manish,
I have made a comparison of taking car loan, making cash payment or taking loan on FD. Out of this FD on loan comes out to be best.
1. Loan of Rs. 5 lacs for 5 years at 11% reducing interest
Amount paid extra as interest in 5 years will be 146348,
2. FD for 5 years at 9% interest
Amount received with interest at maturity will be approx. 280255 yielding 11% return. Now lets deduct 30% tax from this amount = 196178.
3. Loan on FD at 9.5 % SBI- Total EMI int paid=1,25,107
Hence overall gain will be 196178-125107=71071. Which can be used for your fuel expenses for 5 years.
Also you don’t have to be involved in hypothecation and other hassles of loan. Please suggest your comments on my analysis.
Regards
Saurabh
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Hi Saurabh,
First thing ..interest rate for 5 years in SBI FD is 8.5 .
Second,you can get only 90% of FD amount as loan.
Please do your calculations now with above factors and let us know.
In that case why to take loan on FD and pay one percent extra?
Break the FD, buy car and deposit equivalent to EMI and buy FD’s every month.
I am not able to understand what you are trying to say….. Are you telling, take a car loan instead of investing in FD….. something like that ?
Hi Hemanth,
Its very simple ..now understand this.
I am simply saying that dont take a car either on loan or paying cash rather take a loan on FD which will give you a better deal.
Regards
Saurabh
Oh….. ok…..
On a lighter note…. First I should have the FD to get a loan on it …. 🙂