Monthly EMI: Rs. 1,000,00
A car loan EMI calculator helps you understand the estimated EMI you will possibly incur when you buy a car loan.
Purchasing a new car is a huge investment for many as well as a momentous occasion. A car gives you a stronger sense of independence when it comes to mobility. However, it is necessary that you choose a perfect source of funding for this purchase. It is equally important that the car loan you opt for should be repayable for you. How can you ensure this? A car loan EMI calculator can be of help here.
A car loan EMI calculator estimates the EMI you will have to pay regularly in the course of repayment of a car loan. All you have to do is enter the principal loan amount, the rate of interest, and the loan duration.
With the help of this information, it calculates the EMI using a specific formula. A car loan calculator is an essential tool that helps potential borrowers make better decisions. It allows the borrower to understand the repayment requirement of the loan they wish to take. Hence, almost all major banks and NBFCs have the car loan EMI calculator on their websites for prospective borrowers to utilize.
A car insurance plan calculator is another type of calculator that can help a car owner make better decisions when it comes to choosing an apt car insurance plan. As you may be aware, it is legally mandatory to have a car insurance policy that covers third-party liabilities according to the Motor Vehicles Act of 1988. For additional protection of the car against natural calamities, fire, theft, depreciation, and so on, one can consider comprehensive car insurance plans. A car insurance premium calculator helps the user understand the potential premium they will have to pay when they purchase such a plan.
With a well-designed car insurance policy, you can protect your finances and ensure that your car gets the best quality treatment every time. Using a car loan EMI calculator and a car insurance plan calculator results in a combination that helps you make the best financial choices for your car. While your car loan empowers you with the finances to buy the car of your dreams, a car insurance policy protects that purchase.
Let us enumerate the benefits of the car insurance calculator
Easy and convenient
The best part about using the car loan EMI calculator is that it is extremely easy to use and quite convenient. The user has to enter only the three variables and the calculator will do the rest.
Time-saving tool
Using a car loan calculator helps you save time. When you enter the variables, the calculator shows the results immediately. You do not have to wait for the page to load the results or add any sort of formulations. Whereas, in the absence of such calculator, you may have to make these calculations with new variables every time which would take a lot of time.
No scope for mistakes
Since the calculator is automated, it removes any scope for error even when the variables entered are complex or large. The car loan EMI calculator is programmed to provide reliable and swift results every time without any mistake.
Better repayment planning
The car loan EMI calculator helps you plan out your repayment in a better way. Since you are aware of the amounts that you will be paying as the EMI, you can plan your monthly budget accordingly. You also get an accurate idea of how long you will be possibly paying the EMIs, which further helps in repayment planning.
Breaking-up of repayment
The car loan EMI calculator not only helps you get an estimate of the EMI but also provides an estimate of the total amount that you will be paying over the course of your repayment. It also tells you the overall value that the interest will cost you during the loan tenure.
Avoidance of defaulting
Knowing the EMI in advance gives you a stronger comprehension of how much loan amount you can afford to borrow. This helps you avoid borrowing more than you require, thus reducing the risk of defaulting on the loan in the long run.
The car insurance calculator is not only immensely helpful but is also quite easy to use. It can be accessed on several devices and multiple browsers. The most important prerequisite is a decent internet connection. Let’s go through the procedure, explained in 3 easy steps.
Once you have accessed the site for the car loan calculator, you have to enter the three variables: the principal loan amount, the rate of interest of the loan, and the loan tenure. Do note that, in most cases, the rate of interest can be reduced only as far as the lowest rate of interest offered by the lender.
Once the information has been entered, the car loan EMI calculator immediately computes the EMI. The formula used by the calculator goes like this: [E = P * r * (1 + r)^n ] / [(1 + r)^n - 1] where ‘E’ refers to the EMI, ‘P’ is the principal amount, ‘R’ is the rate of interest, and ‘n’ is the tenure of the loan.
After you have received the results, you can modify the variables as per your requirement. With most sites, you do not have to reload the page. You can enter new variables on the same page and the car loan EMI calculator will keep coming up with new results every time.
While the car loan calculator is useful and easy, there are some things you should know before you utilize it. Let’s see what they are.
The result is simply an estimate
The result given by the car loan calculator may differ from the actual EMI that will be quoted by the lender. Since only three variables are entered, the result is based on these variables only. The actual EMI as decided by you and the lender will rely on several factors such as credit history, down payment, the final rate of interest, and so on.
The rate of interest may differ from lender to lender
While using the car loan EMI calculator, it is important to remember that the rate of interest differs from lender to lender. Therefore, the final EMI that you will incur will depend, to a large extent, on the rate of interest of the lender you finalize.
There are multiple factors that influence the EMI of your car loan. Generally, the following points are considered:
The loan amount
The principal loan amount that you are borrowing from the lender will have the biggest impact on the EMI. The higher the loan amount, the more will be the EMI. This can also be seen as you modify the loan amount in the car loan EMI calculator.
The rate of interest of the loan
You will notice that as you increase the rate of interest on the car loan calculator, the EMI increases too. The interest is essentially the charge that you have to pay on top of the principal amount for borrowing money for a particular duration.
The loan tenure
This determinant is also required to use a car loan calculator. The loan tenure is the amount of time within which you plan to repay the loan. A car loan usually takes a few years to get repaid. If you opt for a shorter duration, the EMI may be higher but it would lead to a lesser overall interest amount. A longer duration may incur lower EMIs, but since the repayment is being stretched for a longer duration, the overall interest is relatively higher.
Your credit history
A stable credit history implies that the individual is responsible and diligent when it comes to repayment of credit. Lenders view stable credit history and a good credit score very positively. It is a strong determinant of the rate of interest you will be offered and thus, the EMI you will pay. This is not required to be entered into the car loan calculator.
Your occupation
Those with a steady occupation and a regular income usually incur lower interest rates as it helps the lender understand the repayment capacity of the borrower.
