hi there..may i add something or further abt sir r lasrado explanation...following the flat rate sir that you mentioned..if a banks says 10% for five years... it should mean 10% for the entire 5-year term of the loan...so its an add-on rate...not a flat rate.......so the computation would be 100K less any downpayment and/or discounts from the dealer if there would be any.. the difference is the amount to be financed by the bank...and is the one subject to the 10% add-on rate...its entirely different from 10% per year flat rate... But it is surely better to consult the bank clearly before signing up to a loan. Under the add-on rate scenario, you spread the amount financed equally for the entire term..( in months)..plus the add on rate of 10% of the amount financed similarly spread for the number of months...then you get your EMI or EMA..equal monthly amortization.
hi there..may i add something or further abt sir r lasrado explanation...following the flat rate sir that you mentioned..if a banks says 10% for five years... it should mean 10% for the entire 5-year term of the loan...so its an add-on rate...not a flat rate.......so the computation would be 100K less any downpayment and/or discounts from the dealer if there would be any.. the difference is the amount to be financed by the bank...and is the one subject to the 10% add-on rate...its entirely different from 10% per year flat rate... But it is surely better to consult the bank clearly before signing up to a loan. Under the add-on rate scenario, you spread the amount financed equally for the entire term..( in months)..plus the add on rate of 10% of the amount financed similarly spread for the number of months...then you get your EMI or EMA..equal monthly amortization.