A car loan is a type of loan that an individual secures from a financial institution like a bank for purchasing a car. Today, everyone has a car and truth be told, it has become a necessary personal asset in today’s hectic and fast-paced lifestyle. You can consider buying a first-hand car or a used one; whatever fits your budget. It would all depend on your needs. You can repay the loan in the form of EMIs.
If you default on the loan, your credit score will take a hit; in the worst-case scenario, the lender could end up seizing your car to compensate for their loss. The good part is that today, banks offer car loans at affordable interest rates and tenures so that you don’t have to go that extra mile and stretch your budget. The car loan EMI is made up of the principal and interest portion of the loan. The EMI would remain a fixed amount and will be paid in the form of instalments on a monthly basis.
Want to determine the exact number of monthly installments of your car loan? Then a Car Loan EMI calculator is what you need. By using a Car Loan EMI calculator, you can easily know the amount which you must borrow along with the interest rate as well as the Car Loan EMIs. All you need to do is fill in the loan amount, tenure, and the interest rate. As you enter these details, the EMI amount will reflect in front of your respective screen.
Where
E is EMI
P is Principal Loan Amount
N Loan tenure in months
R Monthly interest rate
The rate of interest (R) on your loan is calculated per month.
R = Annual Rate of interest/12/100
For example : you take a car loan of Rs 5 lakh at an interest rate of 12%, the approximate EMI will be
EMI = ₹5,00,000 * 12/100/12 * (1+12/100/12)^{24} / (1+12/100/12^{24} - 1)
= ₹23,537.