The rule in Car loans: 90 percent of people do not know what is the rule of 20/4/10 in car loans. Know today otherwise, you will suffer loss..


Nowadays almost everyone has a car. Among these, some people have planned to buy their dream car. In today's time, everyone wants to buy their dream car. For this, he often forgets to check his budget, due to which he has to face financial problems later. In such a situation, it becomes necessary to know about the best rule of the market (20-4-10 Rule in Car Loan) while buying a car.


It is often seen that customers buy expensive cars for home with the help of car loans. And then their condition worsens while paying their EMI (Car Loan EMI). Many times one has to take a loan. In such a situation, you should know about the rule of 20/4/10 while buying a car.

First, know what is the rule of 20/4/10.

20% down payment

You should make a down payment on a Car loan of at least 20% of the price of the car. This reduces your interest and financial pressure by reducing the loan amount for your car.

4 Loan period

For information, let us tell you that while buying a car on loan, it is very important to keep in mind the tenure of the loan. The shorter your loan tenure, the less interest you will have to pay. The loan tenure for a car should be limited to 4 years (48 months). This helps you keep the interest in check till the maturity of the loan and saves you from paying interest in the long run.

Keep EMI only 10% of salary

Whenever you buy a car on loan, what is the EMI (Car Loan EMI) at that time? It is very important to take care of this. You are buying a car. You have to keep in mind that EMI should be only 10 percent of your monthly income.

For example, if you earn Rs 1 lakh per month, your EMI should not exceed Rs 10,000. Having a high EMI can mess up your budget. There are many other expenses involved in driving a car besides just EMI. Therefore, try to keep the EMI (decreased car EMI) to a minimum.

Pay special attention to this

Experts believe that most people want to have a shining SUV car. It is also true that new car buyers in the country are buying SUVs in large numbers. However, you need to be practical about a new car. Because when a customer makes a purchase keeping in mind his budget and car maintenance, he does not face any problems in the future.


He says that petrol cars are cheaper than diesel cars. However, the price of petrol in the market is higher than diesel. The maintenance of a petrol car is less, whereas the maintenance of a diesel car costs more.

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