The number of car buyers in India keeps on rising as an increasing number of households purchase cars every year to fulfil their needs. One of the main reasons for the increased adoption of cars in India is that over the past decade or so, a large number of banks and financial institutions have started offering affordable car loans on EMI for customers who cannot outright purchase a car by making the full payment. Cars are expensive investments and coming up with lakhs in cash on short notice can be difficult even for well-paid employees.
However, car loans on EMI essentially split the cost of owning a car into dozens of smaller instalments. This means, the customers only have a pay a small portion of the total cost every month, which is much a lot more realistically affordable than paying the lump-sum amount. If you are looking to purchase a car and wish to understand how much you will have to pay as EMI, you can calculate it using our car loan EMI calculator.
A car loan calculator is a tool that you can use in order to determine the exact amount of EMI that you will have to pay, which depends on the loan amount, the rate of interest charged by the bank as well as the tenure of your loan. Buying a car is a substantial financial investment, so it is important to recognise exactly how much money you will be paying as interest over the period of your loan repayment, as well as how much money you will be required to pay every month in the form of EMI. An online car loan EMI calculator can help you successfully determine this.
Using a car payment calculator offers the following advantages to users:
1. Helps save an immense amount of time as manually doing all the mathematical calculations can be a very time-consuming and challenging process for the average layman.
2. Helps you understand the actual cost of repaying the loan, which includes the loan amount as well as the applicable interest amount that you will have to pay.
3. The results of the car EMI calculator are completely accurate as they are calculated using an exact car loan EMI formula and the calculations are done digitally.
4. It allows potential buyers to understand how much EMI they will have to pay for a certain car, which helps them in making the final decision on whether they wish to purchase a car or not.
A car loan EMI calculator uses the following formula to show you the accurate details of monthly EMIs as well as interest payments:
E= P. R. (1+R)^n/[(1+R)^n -1]
In this formula,
E = Total EMI to be paid each month
P = Principal Amount
R = Rate of interest payable each month
N = Tenure
Using this formula, the EMI for any car loan can be determined, given that the loan amount, rate of interest and tenure is known. For instance, if you take a car loan of ₹5 lakh from a bank or financial institution for a period of 5 years at an interest rate of 8% per annum, then using this formula, you will need to pay a monthly EMI of ₹10,138. The total interest that you will need to pay over the duration of the loan repayment is ₹1,08,292 and the total amount that you will need to pay including the principal is ₹6,08,292. You can also use the car loan EMI calculator to come up with these exact amounts much faster.
Using the car loan EMI calculator is extremely simple, just follow the steps given below:
Step 1: Enter the principal amount of money you wish to borrow in the form of a car loan.
Step 2: Enter the rate of interest being charged by the bank or financial institution.
Step 3: Enter the tenure or time period of the car loan in months or years and then click on ‘Calculate’.
The car EMI calculator will show you the exact amount you need to pay as monthly EMI along with the total interest that you will have to pay over the course of the loan repayment.