The Finance Dilemma | Short Loan Tenure with High Interest Rate or Longer Loan Tenure with Low Interest Rate

Getting your car financed is a critical step in the whole car buying process but can get quite tedious at times. From finding the best car loans with affordable interest rates to choosing a comfortable loan tenure, it is a decision that needs attention. Hence, seeking the right guidance and assistance can go a long way in helping you make the right choice.

Personalisation is an aspect that is a priority for many customers today who are on a constant lookout for solutions that are customised to suit their needs. The same holds true for the financing of their cars. This is where Maruti Suzuki Smart Finance steps in. Maruti Suzuki is the first OEM in India to offer such a service. Maruti Suzuki Smart Finance is an online one-stop destination to help fulfil the end-to-end car finance needs of Maruti Suzuki customers. MS Smart Finance allows you to choose the best of everything, starting with lower interest rates, flexible EMIs, and a loan tenure that can be chosen according to your needs.

When it comes to repaying any loan amount, it is always preferable if one is able to keep the overhead costs, like the interest paid out over the years and the processing fee, to a minimum. Interestingly, choosing to keep the tenure at a bare minimum can help you save more, even if you are charged a higher interest rate, as compared to choosing extremely low interest rates for a longer loan tenure. What interest rate is offered for a particular car loan is not something that in all probability is in the customer’s control anyway; but opting for a low tenure car loan, on the other hand, is. A shorter tenure helps eliminate the bulk of the amount you pay as interest by increasing the EMI amount, hence allowing you to pay out more of the principal amount in lesser time as compared to loans with lower interest rates and long tenures, which you have to repay over an extended period of time. While a combination of both these aspects would be ideal, you should always try to get a shorter tenure on your car loan, to reduce the car loan interest rate that you pay over time.

Here are a few points that you must keep in mind in order to make the best decision for your car’s financing and to lower the interest on your car loan:


shorter loan tenures

Shorter Loan Tenures

A shorter loan tenure ensures that you are able to repay the loan faster, which results in a lower interest payout. Assess the loan tenure wisely and consider the EMI for different tenures, so you are able to repay the entire amount in as little time as possible, saving on interest paid. Apart from this, you should also ensure quick repayment of the principal amount. The lower is the principal amount remaining on your loan, the lower will be the amount of interest you pay over time


Low Interest Rates

Low Interest Rates

To ensure a lower overall interest payout, try to reduce the interest rate on your loan. Maruti Suzuki Smart Finance provides custom loan offers from multiple financial institutions, so you can select a loan that has the best interest rate.


Increase the EMI Amount icon

Increase the EMI Amount

Increasing the EMI amount, wherever possible, will help towards a quicker repayment of the overall loan amount. The surplus amount will not only reduce your principal outstanding, but also the burden of interest.

Pay an Extra EMI

Pay an Extra EMI

You can opt to pay more number of EMIs (i.e. more than the usual 12 EMIs that you are expected to pay) every year. This is an effective way of reducing your loan tenure, and in turn, the interest.

Affordable NEXA EMI

Choose an Affordable EMI Amount

Though a bigger EMI amount will mean a shorter loan tenure, which in turn will lead to lower absolute interest payouts, it will also increase your financial burden. Hence, ensure that you choose an EMI that you can conveniently afford. Maruti Suzuki Smart Finance allows you to adjust your EMIs according to your budget and preferences and offers access to custom pre-approved loans from multiple financiers. Transparency is maintained throughout, with respect to all the fees and charges associated with the offers, so you can make an informed decision in the end.

Higher Down Payment

While fixed periodic payments are mostly viable, high EMIs and long tenures can put quite some stress on your monthly financial planning. A higher down payment on your car loan is a wise decision in this regard as it helps lighten the overall burden of repayment of the car loan.

You can easily finalise the amount of down payment you want to pay at Maruti Suzuki Smart Finance and use the EMI Calculator. It quickly calculates the monthly instalments you will have to pay based on the amount of down payment and the interest rate you select.

Surplus Payments and Part Payments

Redirecting any surplus amounts towards the repayment of your car loan will bring down the loan tenure, and consequently the interest, drastically. Periodically making a part prepayment of the car loan works very well in this regard. With Maruti Suzuki Smart Finance, you will get a clear understanding of foreclosure charges (if any) associated with each loan offer, so you can factor the same in your calculations and make an informed choice.


Find the most suitable financing for your car with Maruti Suzuki Smart Finance’s customised car loan solutions. Maruti Suzuki Smart Finance is the first-of-its-kind online end-to-end car financing solution by an Indian OEM. It is a smart online facilitator that enables quick and convenient car loan approvals. The easy-to-use interface ensures that you are able to find the right loan provider, calculate your EMI, look through customised loan options, avail exclusive offers, upload your documents, get them validated, and get the loan disbursed in a hassle-free and seamless process.

Maruti Suzuki Smart Finance is designed to provide completely transparent car financing solutions with the following benefits:

  1. End-to-end online process

  2. A wide range of financing options

  3. Option to avail pre-approved loan offers

  4. Custom-curated personalised offers

  5. Complete transparency on fees and charges against each offer

  6. Online loan application & digital document sharing

  7. Access to digital sanction letters

Learn more about Maruti Suzuki’s car finance and get an estimate of the EMI amount you would have to pay for your new NEXA car.

Buying a car was never this easy. Get your new car financed today!


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