Just apply this one formula and bring home a shiny new car, neither the loan will be a burden nor the EMI will bother you.

In today's time, whether it is a house or a car, everyone buys them by taking a loan because their price is in lakhs and paying such a huge amount in lump sum is not easy for everyone. However, many times after taking a loan, paying its EMI every month becomes a problem. The reason for this is that people take a large amount as a loan, according to the amount its EMI is also big. When there is a problem in paying that EMI, it starts bothering me.

If you are going to buy a car in the new financial year, then buy it with a special formula. In this case, the formula of 50:20:04 can be very useful for you. This will not mess up your budget and your EMI will also be over without you even realizing it.

Meaning of 50

50 means 50 percent of your income. Many times when we see many luxurious cars in the market, we feel like buying them and for this we do not think before taking a big loan from the bank. After taking a big amount as a loan, a big EMI also has to be paid which later affects your household budget. Financial experts believe that no person should buy a car more expensive than 50 percent of his annual income. If your annual package is Rs 12 lakh, then you should not buy a car worth more than Rs 6 lakh. Otherwise your budget can get messed up.

Understand the meaning of 20

20 means the down payment of the on-road price of the car. Before buying a car, you must have at least 20 percent of the on-road price of the car which you can pay as down payment. By making 20% down payment, your loan liability will be reduced.

Rule 04

Rule 04 in this formula says that the EMI of the loan amount you have taken from the bank should not be more than 4 years. Many times people increase the loan period to reduce the EMI. But by increasing the loan tenure, your EMI definitely becomes smaller but the interest becomes very high, which means you only suffer a loss. Therefore, keep the loan period to a minimum. In case of buying a car or any vehicle, it should not be more than 4 years.