Car Buying Tips: Buying a Rs 20 lakh car when you have only Rs 3 lakh in your bank account may sound impossible, but it’s actually quite doable with smart planning and the right approach. Let’s break it down.
Use Rs 3 Lakh As Down Payment
The first step is to use your Rs 3 lakh as the down payment. Most banks and car finance companies require a down payment of 10-25% of the car’s price. On a Rs 20 lakh car, 15% is Rs 3 lakh. So you’re good to go. This amount will help you secure a car loan for the remaining Rs 17 lakh.
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Get A Car Loan
Visit your bank for a car loan. Many banks offer loans with interest rates between 8% and 11%, depending on your credit score and income. You can choose a loan tenure between 5 to 7 years, which makes the monthly EMI (installment) more affordable.
For example, if you borrow Rs 17 lakh for 7 years at 9% interest, your EMI will be around Rs 28,000 to Rs 30,000 per month. Before applying for the loan, make sure your monthly income is enough to comfortably handle EMIs.
Challenges
If your income isn’t high enough, this can strain your monthly budget. You still have to pay for fuel, insurance, maintenance, and other living expenses. Missing EMIs can hurt your credit score or lead to loan default.
Documents
You’ll need basic documents like your ID proof, income proof (salary slips or ITR), bank statements, and address proof.
Reduce Your Loan Burden
You can reduce your interest cost by choosing a shorter loan tenure if you can afford slightly higher EMIs or making extra payments (prepayments) whenever possible.
Exchange And Offers
If you have an old car, you can use it for exchange offers. Also, look for festive discounts, corporate offers, or zero down payment deals to make your purchase easier.
Don’t spend all your money on the car. Always keep some emergency funds aside.
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