From the on-road price and down payment, with reducing or flat interest — and what a flat rate really costs.
From on-road price to EMI
The loan is the on-road price minus your down payment. Car loans from some dealers and lenders quote a flat rate; choose the method the offer states.
Flat rate: interest = P × rate × years; EMI = (P + interest) ÷ months
Flat rate is not the same rate
With a flat rate you pay interest on the full loan until the end, although you repay part of it every month. The result shows the reducing-balance rate with the same cost, which is much higher: for example, 9% flat over 5 years costs about as much as 15.7% on a reducing balance. Compare offers by EMI and total cost.
Also consider
- Insurance and accessories added to the loan raise the EMI.
- Shorter tenures cost less interest in total.
- Check foreclosure and part-payment charges before you sign.
Results are worked out from the numbers you enter and are for planning only. They are not an offer, an approval or financial advice. Finobazaar does not assume any lender's rate or rules; the lender's loan agreement and its key fact statement decide the actual EMI and charges.