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A car loan EMI calculator is a valuable tool for anyone planning to purchase a car with the help of a loan in India. Understanding your Equated Monthly Installment (EMI) before applying for a car loan can help you plan your finances effectively and ensure that your loan fits within your budget.
The FYERS car loan EMI calculator helps you calculate the monthly installment amount you need to pay for a car loan over a specified tenure. The EMI is the fixed amount paid every month to the lender until the loan is fully repaid.
An EMI consists of two components: the principal amount (the original loan amount) and the interest charged by the lender. The EMI amount remains constant throughout the loan tenure, but the proportion of principal and interest changes with each installment. Initially, the interest component is higher, but as the loan matures, the principal component becomes more significant.
The car loan EMI amount can be calculated using a standard formula that considers the loan amount, interest rate, and tenure. Here’s how you can calculate the EMI amount:
Loan Amount: Enter the total amount of money you wish to borrow for purchasing a car. This is the principal amount on which the interest will be calculated.
Interest Rate: Input the annual interest rate charged by the lender. The rate can vary depending on the type of car, the lender’s policy, and your credit score.
Loan Tenure: Specify the duration for which you want to take the loan. This can range from 12 months to 84 months, depending on the lender's offerings.
The formula to calculate EMI is:
EMI = [P x R x (1+R)^N] / [(1+R)^N-1]
Where:
P = Principal loan amount
R = Monthly interest rate (annual rate divided by 12)
N = Number of monthly installments
Example of Car Loan EMI Calculation
Let's assume you want to take a car loan of ₹5,00,000 for a period of 7 years at an interest rate of 11% per annum.
Loan Amount (P): ₹5,00,000
Interest Rate (R): 11% per annum
Loan Tenure (N): 7 years or 84 months
The formula to calculate EMI is:
EMI = [P x R x (1+R)^N] / [(1+R)^N-1]
Monthly Interest Rate (r) = 11% / 12 = 0.0091
Plugging in the values:
EMI = [5,00,000 x 0.0091 x (1+0.0091)^84] / [(1+0.0091)^84-1]
EMI = ₹12,455
So, the EMI for a car loan of ₹5,00,000 at an interest rate of 11% for 7 years would be approximately ₹12,455.
An amortization schedule is a detailed table showing the breakdown of each EMI payment over the loan tenure. It includes the principal and interest components of each EMI, the outstanding loan balance after each payment, and the cumulative interest paid over time.
An amortization schedule is crucial for borrowers as it provides a clear picture of how the loan is being repaid and how much interest is being paid over the loan term.
For example, in the initial months of the car loan, a larger portion of the EMI will go toward paying off the interest, while a smaller portion will reduce the principal amount. As the loan progresses, the interest component decreases, and the principal component increases.
Understanding the amortization schedule helps borrowers manage their finances better and plan for any prepayment options to save on interest.
Helps You Decide on the Right Car: The FYERS car loan EMI calculator allows you to see how much different car models will cost you each month. This way, you can decide on a car that not only meets your needs but also fits comfortably within your budget.
Reduces Financial Stress: By knowing your exact monthly payments upfront, you can avoid the stress of unexpected costs and feel more secure about taking on a car loan. This clarity helps you make a confident decision without worrying about hidden surprises.
Lets You Plan Ahead for Extra Costs: Owning a car comes with additional expenses like insurance, maintenance, and fuel. The calculator helps you understand your EMI so you can budget for these other costs more effectively.
Gives You the Power to Negotiate: When you know your EMI details, you are better prepared to negotiate with lenders for better terms, like a lower interest rate or longer tenure. This knowledge puts you in control and helps you get the best deal possible.
Convenient Anytime Access: Whether you're at a dealership, at home, or on the go, the FYERS car loan EMI calculator is always accessible online, allowing you to quickly check different loan scenarios whenever you need to make a decision.
A car loan EMI calculator is an invaluable tool for anyone looking to purchase a car with the help of a loan in India. It helps you calculate the monthly installment, understand your repayment obligations, and plan your finances effectively. By using the FYERS car loan EMI calculator, you can save time, compare different loan options, and make informed decisions about your car loan. Start using our car loan EMI calculator today to calculate your payments online and drive your dream car without any financial stress.
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The typical tenure of a car loan in India ranges from 12 months to 84 months. The loan tenure depends on various factors such as the loan amount, the lender's policy, and the borrower's financial situation. Longer loan tenures result in lower EMIs but higher overall interest payments.
The ideal tenure for a car loan depends on your financial situation and repayment capacity. While a shorter tenure results in higher EMIs, it reduces the overall interest cost. A longer tenure reduces the monthly EMI but increases the total interest paid. It is advisable to choose a tenure that balances affordability with total cost.
Car loan EMIs are usually fixed throughout the loan tenure if the loan has a fixed interest rate. However, if the loan has a floating interest rate, the EMI amount may change based on fluctuations in the interest rate. It is essential to check with your lender regarding the type of interest rate applicable to your loan.
A CIBIL score is a credit score that indicates your creditworthiness. For a car loan, a CIBIL score of 750 or above is generally considered good and may help you secure a loan at a lower interest rate. A lower credit score may result in higher interest rates or loan rejections.
A good interest rate for a car loan typically ranges from 7% to 11% per annum, depending on the lender, the borrower's credit score, and the type of car (new or used). To get the best interest rate, it is advisable to shop around, compare rates from different lenders, and maintain a high credit score.