Car Loan EMI Calculator

Free Car Loan EMI Calculator – Plan Comprehensively Before Taking Loan

Car loans allow you to own the vehicle of your dreams without having to arrange all the cash in bulk at once. These schemes are quite popular among the populace and most of the population buys their first vehicle with the help of a car loan. Seeing the size of the market, every major bank and financial organization is offering car loans to customers with terms that look amazing from the outside. But making an educated decision requires you to use a car loan EMI calculator which lets you analyse the fine print and make informed choices.

Car loan EMI calculators – how they work?

Car loan EMI calculator is pretty simple tool which require you to fill in a few important details and shows results that include the EMI figure as well as loan break ups.

In general, a loan EMI calculator consists of fields including loan amount, loan tenure, interest rate and processing fee. Some of the better calculators will also include the option for factoring in prepayment so that you can comprehensively plan the loan repayment. Once you enter all the details, you will be shown results that include the absolute EMI figure and the loan break-up into principal (actual amount borrowed) and interest (based on rates quoted by the lender). 

                     

For instance, if you are planning being offered a loan of Rs.5 lakhs for your choice of vehicle. The loan tenure is 60 months and the interest rate is 14% p.a. Let’s say the lender also charges a processing fee of 2%. Entering this data into the car loan EMI calculator, you will get:

• The monthly EMI you have to pay is Rs.11,634
• The overall amount you pay at the end of 5 years is Rs.7.08 lakhs.
• This amount is broken into principal of Rs.5 lakhs, interest of Rs.1.98 lakhs and processing fee of Rs.10,000.

Planning a new car using car loan EMI calculator

Loan EMI calculator doesn’t only give you EMI figures, it also empowers you to make the right decision. As mentioned earlier, there are a lot of vendors selling car loans and the onus is on you to make an informed decision. To this end, a car loan EMI calculator will allow you to compare different products for variables such as overall interest paid, processing charges and what happens if you pre-pay the loan amount. You can change the tenure of repayment to find what you will comfortable paying off on a monthly basis going into the future.

Also, the pre-pay component is an important part of the loan. If your lender allows pre-paying of the loan before the tenure is completed, you can calculate how the pre-payment will affect the final interest figure for your loan. Loan foreclosure usually comes with an additional charge, and by factoring in this rate, you can calculate if you will technically be paying less by pre-paying the loan or not. For instance, if there is a pre-payment penalty of 2% of outstanding loan amount after 3 years of loan tenure, you can calculate if the benefits of paying the extra charges in terms speedy completion of loan outweigh the complications of a new EMI figure for your monthly finances.

A car loan EMI calculator, therefore, is a tool that lets you read between the lines of your loan agreement. It is strongly advised that you use a loan EMI calculator before zeroing-in on a car loan for your desired vehicle. This will put you in a better position when discussing the loan terms with your chosen lender.