Car Loan vs Paying Cash
Should you finance or pay upfront? Let the numbers decide.
Configure Scenario
What your money could earn if invested instead
You save ₹1.88 L over 5 years
Loan wins when investments earn above 17.6% p.a.
The cash path puts you ahead by ₹1.88 L over 5 years.
Break-even: Loan becomes better when your investments earn above 17.6% p.a.
Wealth Comparison
Total paid, investment corpus, and net position for each path
Wealth Trajectory
Year-by-year investment growth in each scenario
Detailed Comparison
Side-by-side breakdown of both paths
| Metric | Loan Path | Cash Path |
|---|---|---|
| Car Price | ₹12.00 L | ₹12.00 L |
| Down Payment | ₹2.40 L | ₹12.00 L (full) |
| Loan Amount | ₹9.60 L | N/A |
| Monthly EMI | ₹19,928 | None |
| Total Amount Paid | ₹14.36 L | ₹12.00 L |
| Interest Paid on Loan | ₹2.36 L | ₹0 |
| Investment Strategy | Loan amount as lumpsum | EMI amount as monthly SIP |
| Investment Corpus | ₹16.92 L | ₹16.44 L |
| Net Financial Position | ₹14.56 L | ₹16.44 L |
| Verdict | Cash Path Wins by ₹1.88 L | |
Year-by-Year Wealth Growth
Investment corpus trajectory for each path
| Year | Loan Path Corpus | Cash Path Corpus | Difference |
|---|---|---|---|
| Year 1 | ₹10.75 L | ₹2.55 L | +₹8.20 L |
| Year 2 | ₹12.04 L | ₹5.43 L | +₹6.61 L |
| Year 3 | ₹13.49 L | ₹8.67 L | +₹4.82 L |
| Year 4 | ₹15.11 L | ₹12.32 L | +₹2.78 L |
| Year 5 | ₹16.92 L | ₹16.44 L | +₹48,058 |
How This Works
This calculator compares two paths to buying the same car:
The verdict depends on whether lumpsum growth (loan path) beats SIP growth (cash path) minus the loan interest cost. Higher investment returns favour the loan path; lower returns favour paying cash.
Calculator results are for illustration purposes only. Actual returns may vary based on market conditions, fund performance, and other factors. Mutual fund investments are subject to market risks. Read all scheme-related documents carefully before investing. Past performance does not guarantee future returns.
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