Buying a four-wheeler is a luxury for most families. They consider it a boon and can roam together conveniently without relying on other means of public transport. You can also purchase one for yours by borrowing a loan from banks and financial institutions. When doing so, you need to calculate the monthly instalment amount using the car loan EMI calculator.
The EMI depends on the loan amount, interest rate,
and tenure. On the given details, the calculator will let you know how much EMI
you need to pay every month. You can visit lending and banking websites while
applying for an online car loan and choose the loan scheme from home, office,
or anywhere else in the country. There are no limits on accessibility and
affordability while choosing the loan.
To arrive at the EMI, you need to enter the loan amount,
interest rate, and tenure on the car loan
calculator. Remember that every bank or lender offers varying interest
rates on loan. So, choose the one offering the lowest rate of interest so that
you can repay the loan amount conveniently. Use the slider to enter different
loan amounts and tenures to get the approximate EMI to pay towards the loan.
Here are the factors determining the results:
The EMI – This is the amount you need to pay the lender each
month till the loan tenure does not end
The break-up - It shows the interest portion in each month’s
EMI. The rest is the principal amount that you repay every month
The amortisation schedule - The amortisation schedule shows
the break-up of the car loan interest
paid and principal repaid out of the EMI each month till the end of the tenure.
The outstanding balance after paying each month’s EMI will also reflect in the
amortisation schedule.
The formula used to arrive at the EMI is EMI = [P x R x
(1+R) ^n] / [(1+R)^ n-1], where P is the principal loan amount, R is the
interest rate, and N denotes the number of monthly instalments. The car EMI
calculator also displays a pie chart depicting the total payment break-up (i.e.,
total principal vs real interest payable) and the percentage of total interest
versus principal amount in the sum of all payments made against the loan.
The auto loan calculator displays the payment schedule table
showing payments made every month/year for the entire loan duration, along
with a chart showing interest and principal components paid each year. A
portion of each payment is for the interest, while the remaining amount is the
principal balance. During the initial period, a large part of each payment goes
towards interest. With time, larger portions pay down the principal.
