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  Monday, 25 June 2012
  4 Replies
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What is Car Finance Bullet Scheme. Nissan Micra has scheme running in your offers section of Rs. 3999 EMI and 1 Bullet EMI of Rs. 28,500. How to Calculate Interest Rate in Car Finance Bullet Scheme and is it better than a regular Car Loan Scheme
11 years ago
Hello Keval,

There are 2 types of Car Loan Scheme :-
- Balloon Scheme
- Bullet Scheme

Balloon Scheme, also known as Step-up Scheme in which Car Loan EMI Changes every year. Depending on your Income level - Banks will offer flexibility by offering say x Emi in 1st year and then on further years your EMI will increase by X+10%

Bullet Scheme, essentially that scheme in which 11 EMIs will be subdued and 12th EMI will be Bullet EMI. Implies - Say for Nissan Micra, Rs. 3999 Scheme on in which one has to pay Rs. 3999 for 11 months and then Rs. 36,000 as bullet EMI for 12th month. (stated example is on loan amount of Rs. 3.6 Lacs for 5 years)

To say - is Bullet better than normal scheme - depends on your requirements. Under Bullet, if you are comfortable to make one bulk payment (normally by retaining that amount from Annual Bonus) and wants rest of EMI to be on lower side - then you can very much take on Bullet EMI Scheme.

Outflow in Bullet EMI Scheme
Say if we take Nissan Scheme of 5 yrs for Loan Amount of Rs. 2.85 Lacs
Total Outflow in 5 yrs - Rs. 3999 * 55 + Rs. 28,500 *5 (Here 55 are subdued EMIs and 5 are bullet EMIs in 5 yrs loan tenor) = Rs. 3,62,445

Outflow in Regular Car Loan Scheme
To have similar outflow i.e Rs. 3,62,445 in next 60 months, it means EMI has to be Rs. 6040 on loan amount of Rs. 2.85 Lacs
It translates to Interest Rate of 9.9% - which is a very good rate

Thus - it becomes viable to go in for Nissan Micra Bullet EMI

Know More
Advance EMI vs Arrears EMI
11 years ago
w will be downpayment and i didnot understand second part..
11 years ago
1 Bullet EMI of Rs. 28,500 tell me simple how much monthy i have to pay in 1 year and second year monthly and downpayment how much at starting..
11 years ago
Hello Varun.

If its Micra Petrol - The Monthly payment for first 11 months is fixed at Rs. 3999, 13th EMI - 23rd EMI is Rs. 3999 and on
Every 12th month EMI is Rs. 28,500, Been loan amount is Rs. 2.85 Lacs, balance amount is considered as down-payment for making up to the on road price.
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