Car Loan EMI Calculator

Car Loan EMI Calculator

Car ownership is no longer a luxury but a need for Indians across different income groups. It has become easy to own a car these days with the availability of a wide range of credit facilities by several banks and non-bank financial companies (NBFCs). A car loan EMI calculator should be your first tool if you are looking forward to availing credit facilities for buying a car.

An online car loan EMI calculator helps you in getting an estimate of the exact amount you will need to pay in equated monthly instalments (EMIs) after buying the vehicle.

What is a Car Loan EMI Calculator?

A car loan EMI calculator is a tailored tool to compute the monthly instalments one needs to pay after availing a loan to buy a car. An EMI calculator for car loan can help you to find out the exact amount you will need to pay based on the principal sum, interest rate and loan tenure. A clear idea about the EMI amount could be handy in planning your monthly budget better.

How to Use the Car Loan EMI Calculator

An auto loan EMI calculator or car loan EMI calculator can be used to plan the car loan repayment schedule as per your convenience. You can calculate car loan EMI using the amount you borrow, car loan interest rate and the tenure. Here are the steps to use a car loan EMI calculator online:

1. Enter the principal amount (the amount you will borrow) from the bank.
2. Enter the interest rate.
3. Enter the tenure.

After submitting your details, the car loan EMI calculator will show the amount you will need to pay every month.

Factors Affecting Car Loan EMI

There are many factors which are likely to affect the amount of your Car Loan EMI:

• Credit Score: Before your loan is sanctioned, your lender will check your credit score. Having a good credit score can help you in securing a loan easily, even with a lower interest rate in some cases.
• Debt-to-Income Ratio: Many lenders take into account debt-to-income ratio before approving a loan. This ratio measures your ability to repay the loan in monthly instalments.
• Down Payment: The amount you pay as down-payment can significantly change the monthly instalment you will repay for car loan. While up to 100% financing options are available, the more down payment you make, the lower will be your car loan EMI.

Benefits of Using a Car Loan EMI Calculator

• A car loan EMI calculator helps you to save time by doing away with lengthy, time-taking and complicated calculations.
• You can compute the exact EMI amount by using any car loan EMI calculator or an EMI calculator for vehicle loans.
• Knowing the exact EMI amount you need to pay every month helps you with better financial planning. You can negotiate with the lender to choose the repayment schedule as per your convenience.

Car Loan Interest Rates and Tenure

The total tenure of your car loan repayment plan can significantly influence your monthly payments and the total interest amount you will need to pay. The higher the tenure of the loan, the more will be the total amount paid towards car loan interest rate. However, a longer tenure will bring down your EMI amount. Choosing the right tenure for a car loan should be decided as per your monthly budget, total amount you borrow and the interest rate. You can use a car loan EMI calculator to get the exact amount based on different tenures and interest rates. This will help you to choose the best loan offer.

Understanding EMI and Its Components

The important components in a car loan EMI calculator are the principal amount, interest rate and the loan tenure. The EMI calculators use a simple Car loan EMI calculation formula:

E = P × R × (1 + R)^N / [(1 + R)^N - 1]

E: EMI amount per month
P: Principal amount
R: Rate of interest per month
N: Number of months

Advantages of Calculating EMI Before Applying

• By calculating your car loan EMI before you apply for a loan, you can plan your finances beforehand and adjust your spending to accommodate the monthly instalment.
• If you calculate your EMI before applying for a loan, you can know your principal amount as well as the amount you will end up paying towards interest.
• By using a car loan EMI calculator for different interest rates and tenures, you can choose the best loan offer as per your needs and repayment schedule.
• Using a car loan EMI calculator helps you to avoid future financial burdens after availing a loan.

Common Mistakes to Avoid While Using EMI Calculators

• It is important to do thorough research and find out which lenders are offering lower interest rates, better facilities, and more flexibility on your car loan.
• Check the car loan details carefully and enter the exact loan amount, interest rate, and tenure to get the accurate EMI amount.
• Choosing a longer loan tenure may bring down your EMI amount but it may not always be the suitable option. Repayment for the interest component also goes up with a longer duration.

Conclusion

An online car loan EMI calculator is a tool that helps you in finding out the instalments you would need to pay. The calculator is aimed at enabling better financial preparedness before applying for a loan. A car loan EMI calculator can be quite useful in choosing the best loan offer and planning your finances better.