A car loan is a magic wall that enables your dream car to have a big hole in the pocket without burning. Although the options for auto loans are not dearly available, there are usually confused calculations on EMI. Before you pick a car loan, we suggest testing your EMI. Don’t worry, it doesn’t sound as difficult. Most banks have an EMI automatic auto loan calculator that allows you to see your monthly outflow just one click away. Find out more about India’s car loans and how an EMI calculator works exactly.
GROWING DEMAND FOR CARS IN INDIA
For Indians, cars were always a precious possession but nowadays they have become a necessity in fast-paced lives. Whether it be metro or small towns, four-wheelers constitute an integral component of Indian families. A increasing economy has stimulated demand for passenger cars in the country and increased disposable income. Most Indians are also in huge demand, not only small cars but larger ones like sedans, multi-use cars or special utility vehicles. Car is a hobby for others, it’s a factor of reputation, but it’s a crucial commodity for others.
Thousands of people are exhibiting cars in their towns, visiting online car portals or keeping an eye on their favourite car makers’ new launches. It’s not easy to finish a dream car. “What miles is it offering? “What are the cost of servicing? “Where’s the closest repair shop authorised? “There are certain issues that are still on the mind of a future car owner. A consumer may have unlimited views posted on different websites and applications in this digital age. As a decision-maker, how do we neglect social media? On Facebook, Twitter and You Tube there are car experts and influencers who can help you make the right choice.
WHAT IS A CAR LOAN AND HOW IS AN EMI CALCULATED?
But not all have the funds to buy a vehicle. Furthermore, while many have the money, many do not wish to spend large sums early. This is why car credit is still a common way to fund a purchase of a car.
As most other credit, a car loan includes a certain sum from a non-bank lending institution and a refund over a fixed tenure. This allows you to pay the dealer the car purchase price. As a standard practise, the borrower agrees with you that each month, a fixed sum must be reimbursed for the loan. This is called EMI or Equated Monthly Install. The EMI contains both the principal and the interest. Various banks charge various interest rates on car credits. The interest rate is bound to a benchmark rate, which is why the rate fluctuations in banks are not important.
The EMI is a fixed sum, but for the full period of the loan the principal and interest payments differ. The interest sum in the initial stages is the biggest piece. The interest portion is reduced and the principal sum constitutes the largest share as the loan continues to be paid off. It goes on until the whole thing is paid off.
Other loan charges include processing costs, paperwork charges, loan cancelation/re-reservation charges, prepayment charges, etc., aside from the EMI. You must also review all these factors when deciding on a car loan. Only after detailed analysis between many credit providers should you approach a certain bank for loans.
Most banks offer an EMI car loan calculator to make decision making easier for you. This is one of the simplest tools in jiffy monthly performance estimates.
WHAT IS A CAR LOAN EMI CALCULATOR?
EMI Calculators are an online application that measures the sum of your equated monthly installation automatically (EMI). For all loans like car loans, home loans or personal loans, this EMI calculator is popular. All you have to do is enter your principal, pick your desired interest rate and tenure and viola! It’s measured your EMI. You can adjust your entries and compare your EMIs by using different interest rates or tenures. Car loan EMI calculator.
HOW DOES A CAR LOAN EMI CALCULATOR WORK?
Most Car Loan EMI calculators require inputs on certain parameters such as:
- Loan Amount: This is the principal amount that you want to borrow from the bank.
- Tenure: This is the time period across which the entire loan will be repaid.
- Interest rate: This is a rate that is charged by the bank on the amount borrowed.
- Processing fees: This is a charge levied by the bank at the time of loan disbursal
The EMI calculator for the car loan provides you with the exact EMI value after you have these inputs. Not only this, an EMI car loan calculator also tells you of the breakdown of the EMI, which includes the charge of interest, capital and other fees such as processing costs, etc.
FACTORS THAT IMPACT A CAR LOAN EMI CALCULATOR
- Principal or Loan amount: This is the primary expense of the car you want to buy. In India, car rates begin with Rs 3 lakhs and reach Crores. The Rs 8 lakhs give more funktionality to branded SUVs, while somewhere close Crores are luxurious brands like Country Rober, Audi, BMW and Volvo. The more expensive the car the higher the EMI.
- Tenure: The length of the loan is preserved in this way. The shorter the tenure, the more the EMI will pay but will have a lower interest rate. If the tenure is longer, the EMIs will be fewer, but the rate imposed will be higher. You can pick a suitable loan for yourself based on these criteria.
- Interest rate: This is one of the key factors influencing the measurement of EMI. Various rates of interest are paid by several banks but within the range indicated. Set or floating interest rate can be. You have to pay the same interest on the whole term at a fixed interest rate. The interest rate in a floating case varies depending on the economic conditions. Payment of interest rates is the key component of the EMI.
ADVANTAGES OF A CAR LOAN EMI CALCULATOR:
- Simple and absolutely user-friendly.
- Accurate and helpful in ascertaining the exact amount of monthly outflow.
- The inputs can be adjusted and this enables you to check the amortisation table in varied ways. This implies the amount repaid and outstanding at the end of each period.
WHY DOES A CREDIT SCORE MATTER?
Although it is obviously the price of the car or the interest rate of the car lending that defines the lending you would select, there are other things at stake. You have to look at your revenue, and ensure you do not surpass 30% to 50% of the debt-to-income ratio. This ratio helps you to quickly refund your loan.
Your credit score is also very significant. The credit office gives this score on three key parameters: (1) Trend where your previous loans have been managed (2) Other loans currently made use of by you and (3) your financial status. A strong credit score will help you secure better terms with a lender on the car loan. You can use a loan with a lower interest rate and save a lot of money every month if you have a credit score above 700.
CAR LOAN EMI CALCULATOR SUMMARY
Creditboss has a credible EMI calculator which can be help you while availing all kinds of loans from leading lenders in India. This calculator is simple and can be used by just entering details like the loan amount, interest rate and tenure.
When you know the sum of the EMI, your overall monthly outflow is obvious. This makes planning your costs simpler for you. You would have the right to better loans and to save a big amount per month if you have a decent credit score.
If this car loan is your first loan, ensure your creditworthiness before approaching the lenders. It is quite possible that the loan though attractive, is not suitable to your credit profile. So, what are you waiting for? Start right away by creating your credit profile at Creditboss.