## Car Loan EMI Calculator

Car has become a basic necessity and it is one of the earliest purchases you will ever make. For millennials, car is like a status symbol and adds to the standard of living.

The best way to buy a car is from your savings. However, even if you cannot buy with your savings, you can still afford it with easy and simple car loans where you are free from the stress of paying the lump sum amount at once, instead pay with easy every month with the EMI facility…read more

**Break-up of **Total Payment

**Amortization** Schedule

## Car Loan Overview:

Car has become a basic necessity and it is one of the earliest purchases you will ever make. For millennials, car is like a status symbol and adds to the standard of living.

The best way to buy a car is from your savings. However, even if you cannot buy with your savings, you can still afford it with easy and simple car loans where you are free from the stress of paying the lump sum amount at once, instead pay with easy every month with the EMI facility.

With simplified car loans, buying your dream car is within your reach irrespective you are self-employed or a salaried person. Car loan can be availed by any of the following-

- Self-employed or Salaried Individuals
- Partnership firms.
- HUFs and Trusts

## 3 most important components of Car Loan EMI:

**Principal**– Principal is the amount of loan that the bank/lender offers to the borrower for a fixed period of time. Most of the bank provide 90% of the amount of the car as loan to ensure easy payment for the borrower through EMIs.**Tenure**– The period of time within which the principal along with the interest is to be paid back to the lender.**Interest**– Interest is the amount charged by the lender for the loan provided at fixed rate or floating rate. The fixed rate will remain the same for the tenure of the loan but the floating rate is subject to change and fluctuations from time to time.

## What is Car Loan EMI?

EMI stand for “Equated Monthly Installment” towards the Car Loan taken to purchase the car. As suggested by the name it means it is an installment for the entire tenure of the car loan which is paid equally every month by the car owner to repay the amount of the loan along with interest for the period of the loan. EMI consist of principal amount and interest amount on the car loan. It is paid by the borrower of the car loan/ owner of the car loan to the lender/bank who has provided the loan for the purchase of the car. So, before applying for a car loan, you must make it a point to calculate and check how much would be your car loan EMI every month. Car Loan EMIs are computed on a reducing balance method which works in favour of the borrower of the car loan. Initially you pay toward the interest of the loan, but later you pay towards your principal amount of car loan. EMI payment is a simplified method of payment of the car loan, and the Car loan EMI calculator makes the calculation of car loan makes it even simpler and easier.

## How to calculate your Car EMI?

EMI is calculated with the following formula – **P X R X (1+R)^N/(1+R)^N-1**

Here, **P** stands for Principal amount of the loan

**R** stands for Rate of Interest

**N** stands for Number of equal monthly installments.

**Example** – In order to take a Car loan of INR 5,00,000 with a tenure of 8 years at the interest rate of @9.25%. The EMI will be calculated as follows – **500000 x 9.25% x (1+9.25%)^8/(1+9.25%)^8-1 = 7,390**

## What is Online Car Loan EMI Calculator?

Car Loan EMI Calculator is an online tool which provides you the monthly instalment amount in a split second and helps you to understand your Car loan EMI outgo on the loan amount. You can use make use of EMI Calculator to check the amount you will have to pay every month to pay off your car loan.

## How to use Online Car Loan EMI Calculator

Follow the steps to use online Car Loan EMI calculator.

- You will find the EMI calculator on the bank website providing car loan or a reliable third party website offering car loan.
- You just have to use the slider and enter the basic details like loan amount, tenure of your loan(in months) and the interest rate offered on such loan.
- If you are making any pre-payments you must enter those in details.
- After entering the above details, click on “Calculate.”
- The Car Loan Calculator will instantly reflect the approximate EMI for the loan amount and tenure.

### Example –

If you want to purchase a car of INR 5,00,000 and want to take up 80% of the car price as a car loan, then your principal of the car loan will be INR 4,00,000.

**Value of the car** = INR 5,00,000

L**oan Principal** = INR 4,00,000

Rate of interest = 8.5%

Tenure of car loan = 5 years

EMI= INR 9,859.

Now, you need to fill in the relevant details on the online calculator:

- The principal amount,
- Tenure of the car loan
- The rate of interest.

The calculator will calculate and show the monthly EMI on your car loan on said amount, principal and interest which is INR 9,859 for the aforesaid example.

Online car loan EMI calculator makes your calculation very easy and instant. It is dynamic. You can use it for different combinations to know your EMI towards your car loan.

## How to check EMI using EMI Calculator for different tenure/interest rates?

The interest rates and loan tenure are the important factors for determining the loan EMI. Higher the interest rate, higher will be your EMI and vice-versa. Similarly, if you opt for a long tenure for the repayment of the loan, your EMI will be reduced. Therefore, you must check and calculate different EMI using EMI Calculator in case of longer or shorter tenure, lower or higher amount of loan, as well as interest rates which are subject to change. You must consider opting for a longer tenure so that your EMIs are less, making your repayments comfortable.

## Factors of Car Loan EMI Calculation:

The following factors are interdependent for the car loan EMI calculation through the online EMI calculator.

- Loan Tenure- Longer the loan tenure, the lower will be your EMI.
- Loan Amount- Higher your loan amount, higher will your EMI and tenure.
- Rate of Interest- Lower the interest rate on the loan, lower will be the EMI.
- CIBIL Score- If you have higher CIBIL score your interest rates will be lower on the loan. Higher CIBIL scores attracts lower interest rates.

## Benefits of Online Car Loan EMI Calculator:

- It provides instant and accurate EMI calculations and is free for any number of times.
- It can be easily found on the bank website or any other reliable website offering car loan.
- It helps to easily input various variables loan tenure, amount of loan and revised interest rates to calculate correct EMI.
- It saves a lot of time as the formula may seem complicated to some people.
- It ensures accuracy as EMI calculations manually are prone to human error.
- Easy for people who are bad with much calculations and forgets the EMI every now and then. They can easily check the EMI online by filling the basic details in the online Car Loan EMI Calculator.
- It makes the loan planning easier as you can check the EMIs of different amounts to decide the amount of loan you must opt for. It helps to ease your planning for the amount of loan according to your monthly paying capacity.

## How to pay Car Loan EMI?

Car Loan EMI can be paid through any of the three methods-

**Standing Instructions-**This is the easiest and most common method of EMI payment. Your EMI will be automatically debited from your account with the bank on the specified date enabling the bank authority through the standing instructions to ensure payment of instalments on time. The service is provided on savings, current, or salary account with the bank.

**Post-Dated Cheques-**You can sign post-dated cheque for the EMI payments through the bank.

**National Automated Clearing House-**It debits your EMI automatically at the end of the monthly cycle.

## Frequently Asked Questions (FAQs)

### How can I get lowest EMI on my car loan?

In order to get lower EMI, you must opt for longer tenure. EMI is also higher if you opt for higher loan amount in order to decrease your EMI, you must make sure your loan amount is lesser and tenure is longer.

### What is Loan Car Repayment Table?

Loan Car Repayment table shows the periodic repayment schedule of the loan. It consists of details such as principal amount of the loan, EMI, Interest payments, and the outstanding amount due after each payment. It is very much like a bank passbook which shows the details of each transaction.