Buying a Rs 20 lakh car when you only have Rs 3 lakh might sound unrealistic, but with smart planning and the right loan strategy, it’s completely possible.
Here’s how you can make it work without draining your savings.
Step 1: Use Rs 3 Lakh as Down Payment
Start by using your Rs 3 lakh as the down payment.
Most banks or car finance companies ask for a 10–25% down payment.
For a Rs 20 lakh car, 15% equals Rs 3 lakh — the perfect amount to get started.
This payment allows you to apply for a car loan of around Rs 17 lakh for the remaining cost.
Step 2: Get a Car Loan That Fits Your Budget
Visit your bank or compare online lenders to find the best car loan offers.
Interest rates generally range between 8% and 11%, depending on your credit score and income.
If you take a Rs 17 lakh loan for 7 years at 9% interest, your EMI will be about Rs 28,000–30,000 per month.
Choose a tenure that balances your comfort and repayment ability.
Make sure your monthly income can handle this EMI along with fuel, insurance, and maintenance costs.
Documents Needed:
You’ll need basic documents like your ID proof, income proof (salary slips or ITR), address proof, and bank statements.
Step 3: Reduce the Loan Burden
If possible, go for a shorter loan tenure to reduce interest costs.
You can also make part-prepayments whenever you have extra funds — it will bring down your total interest amount and shorten the repayment period.
If you already own a car, check for exchange offers or festive discounts from dealers.
Many banks and car companies also run zero down payment or special festival schemes that can help lower your initial cost.
Step 4: Keep an Emergency Fund
Don’t exhaust all your savings on the car.
Always keep some money aside for emergencies.
Owning a car comes with ongoing costs — insurance renewals, servicing, and fuel — so financial balance is key.
With thoughtful planning and disciplined repayment, driving home your Rs 20 lakh dream car with just Rs 3 lakh in hand is entirely possible.
