With the rise in the modern lifestyle these days, the demand for four-wheelers has significantly increased. It has further led to a proportional rise in the demand for car loans. Car loans are such financing options that offer convenience to those borrowers who want to purchase their dream vehicle but do not have enough monetary resources at their disposal.
In such a situation, the Car Loan EMI calculator helps you in deciding the suitable car loan amount and for managing your monthly finances accordingly. It is a hassle-free tool that assists you in planning your EMIs.
Ways of calculating Car Loan EMI
You can calculate the EMIs on your car loan by using two methods i.e. by using an online Car Loan EMI Calculator or manually. The process for both is explained below:
Method 1: By using an online Car Loan EMI Calculator
Go to the Car Loan EMI Calculator page of the lending institution or any Fintech portal
After entering the above-mentioned information, the monthly EMI you are required to pay will be shown instantly.
Method 2: By using a manual EMI calculation formula
This is the formulae that you would need to calculate EMIs on your car loan-
E = [P x R x (1+R) ^ N] / [(1+ R) ^ N – 1] wherein, E stands for Equated Monthly Installment, P stands for Principal loan amount, R stands for Rate of interest, N stands for the number of months. These three factors are variable. It means that the EMI value will change every time you change any of the 3 variables.
Factors affecting Car Loan EMIs-
Principal amount – It is the amount of loan that you are borrowing and is one of the main parameters on which your car loan EMI depends. The more the principal, the higher will be the EMIs.
Tenure - The term chosen for a car loan is another major factor that can impact your monthly EMI payments. If you choose a longer tenure, the monthly installment would be less and if the tenure chose is small, you will have to pay higher EMIs.
Rate of interest – It is the rate at which you will be offered a car loan. If the rate of interest rate is higher, the EMI will also be high.
Benefits of using a Car Loan EMI Calculator
Simple to use: Using an online EMI calculator is very easy. Anyone can use this calculator to evaluate his/her car loan affordability. All you need to provide details related to personal loans such as loan amount, interest rate, and tenure. The result will be shown instantly.
Give accurate results: There might be chances of mistakes when you do the mathematical calculation manually while finding out EMIs of your loan which may lead to choosing the wrong loan offer. But by using this calculator, you get a chance to do multiple variations with accurate results every single time.
Helps you to select the best loan offers: When you input various lender offers on an EMI Calculator, you get an instant idea of what your EMI will be with different lenders. After comparing all the loan offers, you can easily decide the best loan offer for yourself.
Free of cost: This is one of the biggest advantages as the calculator is free of cost. One can use as many times according to their requirements.
So, before you go and scout for a car loan to buy your dream vehicle. Make sure you make use of this handy financial tool to calculate EMIs on your loan that you need to pay your lender every month till the loan is fully repaid.