Car Loan EMI calculator

 

Buying a car is now not just a dream but a necessity. A car loan EMI calculator helps you decide how much EMI is suitable for you so that you can manage your finances accordingly. Such calculators are offered by bank websites, third party loan aggregator websites and also by car portals. These calculators are easy to access and provide quick results without the need to do any manual calculations, thus making the process of loan planning easier for you.

 

How car loan EMI calculators work

When purchasing a car on EMI, you have to pay a certain portion as a down payment which could be a minimum of 10-15 per cent. The remaining amount can be paid through EMIs. There are a host of car loan EMI calculators available online. Once you know the price of the car, the down payment amount, the tenure and the interest rate on the car loan, these calculators help you find out your EMI. Some of these calculators also give you additional information on the interest you need to pay. Such calculators run the mathematical formula in the background to calculate EMI in its backend and throw up results in a jiffy.

As you select a longer tenure, the EMI will go down, but the total interest you pay goes up. For example, let us say you are availing a car loan of Rs 6 lakh at 9.5 per cent per annum interest rate and tenure of three years. The EMI will be Rs 19,080, while you have to pay an interest of Rs 86,875. If you select a tenure of five years, the EMI drops to Rs 12,602, but the interest payment is now Rs 1,56,068.

 

How to use online Car loan EMI calculator

Using a car loan EMI calculator is easy. First find out of the price of the car and the model you want to purchase and figure out how much down payment you can make. Subtract that from the price of the car to get at the amount of loan you need. Speak to different banks and find out the best interest rate on a car loan. Then choose a tenure that suits you. Input all these data in a car loan calculator and it will show you the EMI that you need to pay.

 

Car Loan FAQs

 

How to apply for a car loan?

To apply for a car loan you can visit a bank branch, call the customer care number of the bank or also do it online. Loan aggregator websites let you compare car loan offers from different banks and apply online.

 

What’s the maximum amount of car loan I can avail?

The maximum amount of car loan that will be approved varies from one bank to another. Usually banks will approve 80 to 90 per cent of the car’s on-road price. Some banks will also offer up to 100 per cent of the car’s ex-showroom price.

 

What are car loan interest rates like?

Car loan interest rates vary from bank to bank. It will depend on various factors like your existing income, credit score, existing EMIs and relationship with the bank. Car loan interest rates start from about 9.25 per cent per annum and can go up to 11 per cent or higher.

 

What is the typical tenure of a car loan?

The tenure of a car loan can be as less as one year, going up to five years. Some lenders also offer a tenure of up to seven years. The longer the tenure, the lower the EMI and vice versa. You have to pay more interest as the tenure goes up.

 

Do I need to provide a security or collateral when taking a car loan?

The car you purchase is itself the collateral and no other collateral is required. During the loan repayment period, the vehicle is hypothecated to the lending institution.

 

How do I repay a car loan?

The loan can be repaid through post-dated cheques in favour of the bank. If you have an account with the bank, you can issue a direct debit mandate or go for the ECS option.