Vehicles are an amenity that allows travel. Or transporting things is easier. It is also an asset that helps to show the owner’s face very well.
which the car is a high-value asset To acquire it, it is impossible to lack good financial planning. The best way is to calculate the various expenses. before buying To see how much each month has to be spent and suitable for their wealth or not
Today, money on wheels has prepared a method for calculating car installments. That will help make financial planning possible to be fluent for everyone to follow. Let’s see how to do it!
The vocabulary you should know first before a car loan
Before calculating the car payment Money on wheels. Let me tell you that in the installment process, there will be difficult terms that many people may not be familiar with. Therefore, you should know some basic terms before starting to pay off a car first.
Financing means asking for a loan from a financial institution to buy a car in case you don’t have enough money to pay for the car all at once. This will be the operator of the payment to the car company. And you will have to pay in installments to the financial institution.
Down payment means the first money you will have to pay for car installments. in which the rest will be paid at the same time with periodic interest until maturity
Arrangement refers to the amount that you borrow from finance and have to pay an installment, such as a car priced at 500,000. If you place a down payment of 100,000 baht, there will be a balance of 400,000 financings. This amount will be the amount that will be used to calculate your interest. have to pay
Fixed interest means interest that is pre-calculated-calculated. Then bring that amount together with the remaining principal to pay in installments each month. Even if there is an additional sum of money You still have to pay all the interest you have.
Paying off 1 car, what is calculated?
Once you’ve decided on the car you want Now let’s have a look at what you need to calculate when paying for 1 car, as follows!
car loan calculation formula
Bring the price of the car – down payment = the amount of financing
Take the financing amount x interest rate percentage (eg 5% or 6%, where the interest rate of each is not the same depending on the distribution center and the repayment period).
Take the sum of interest and balance ÷ with the number of years to pay the installment = total interest payable (for example, 2 years or 3 years).
Take the total interest that must be paid + the amount of financing = the total amount paid.
Take the total amount paid ÷ Number of months to pay installment (eg 24 months or 36 months) = Monthly installments.
this method of calculating the car payment, You can use for both cars and motorcycles.
For example, the car you buy for 500,000 baht, if you place a 30% down payment or 150,000 baht, the total amount is 350,000 baht.
If you choose to pay in 48 installments (or 4 years) at an interest rate of 5% per annum, here’s how to calculate it:
5% interest of 350,000 baht, equal to 350,000 x 5% = 17,500 baht per year
In 4 years, the total interest must be paid at 17,500 x 4 = 70,000 baht.
Combined with the 350,000 baht arrangement, you have a total payout of 350,000 + 70,000 = 420,000 baht.
In summary, you have to pay a total of 420,000 ÷ 48 = 8,750 baht per month.
How to plan car installments to keep your finances flowing
Many people probably already know how to calculate car installments. But do not forget that in addition to the car payment that must be paid each month, Other expenses come with the car as well, so let’s see how to plan how to calculate the car payment to keep the finances flowing.
Pay the installment as soon as you have the money
If you are afraid that each month you will accidentally spend by forgetting to think about the car payment. When it’s time to pay the installment, the car won’t have enough money left. Money on wheels suggests that if you get the money when to Hurry up to pay the car installment immediately when the money is best. Once the salary has been received, transfer the car payment immediately. You don’t have to worry about not paying on the installment date. Because just you pay in installments according to the number of installments is enough.
Does not create additional debt
Although the cost of the car installment is not very high. But adding to your debt can affect your financial liquidity as well. Because you must not forget that besides the burden of installments, these products also have many expenses in your daily life. So if you want something, it’s best to save money and buy it.
And this is the formula for calculating car payments that money on wheels has brought for everyone to read. and understand before starting to buy a car However, money on wheels recommends that you consider your affordability appropriately before making a decision. in order not to incur financial burdens later on.
If one day your financial condition is in need. or want to invest in business You can use the car you have to get a loan with money on wheels.