What is Car Installment?
Car finance refers to the various financial products which allow someone to acquire a car, including car loans and leases.
What is a car Instalment?
The finance term is agreed to upfront and can range from 12 to 72 months or even more. This equates to 1 to 6+ years. The longer the finance term, the less your monthly instalments will be, but bear in mind that while it looks good in the short term, you’ll have to pay interest on the loan.
How does car installment take over work?
If you think about it logically, when you take over someone’s payments you are taking on a loan amount for the remaining balance on the vehicle – not the full cost of the car. This means that the amount loaned is automatically refinanced in your name and you can expect lower monthly premiums as a result.
How is installment calculated?
USING MATHEMATICAL FORMULA
EMI = [P x R x (1+R)^N]/[(1+R)^N-1], where P stands for the loan amount or principal, R is the interest rate per month [if the interest rate per annum is 11%, then the rate of interest will be 11/(12 x 100)], and N is the number of monthly instalments.
How can I reduce my car installment?
Refinancing offers you the opportunity to change and lower your monthly vehicle instalment by changing your debt obligation to the current value of your vehicle’s settlement amount, changing your interest rate, finance term, or amount financed, and even freeing up some extra capital for up to 60 days.