What Is a Car Loan EMI Calculator?
EMI stands for Equated Monthly Instalment, which is the fixed amount of money you pay to your lender every month until you repay the entire loan amount. A car loan EMI calculator helps you estimate the amount of money you will have to pay every month towards your car loan.
A car loan EMI calculator takes into account three factors: the loan amount, the interest rate and the loan tenure. By entering these details, you can get an instant result of your monthly EMI, along with the total amount payable and total interest payable.
Formula To Calculate Car Loan EMI
The formula used to calculate the car loan EMI is as follows:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
P = Principal amount
R = Interest rate per month (divide the annual interest rate by 12)
N = Number of monthly instalments or loan tenure in months
For example, if Ram takes a car loan of ₹2,00,000 from a bank at an interest of 9% per annum for 10 years. Here is how the EMI would be calculated:
P = ₹2,00,000
R = (9/12)/100 = 0.0075
N = 10*12 = 120
EMI = [2,00,000x0.0075x(1+0.0075)^120]/[(1+0.0075)^120-1]
EMI = ₹2,533.52
Ram has to pay an EMI of ₹2,533.52 per month for 10 years to clear his loan. However, manual calculations are time-consuming. This is where an online car loan EMI calculator comes in handy. The online calculator can compute the results in less than a minute.
How Can a Car Loan EMI Calculator Help You?
A car loan EMI calculator can help you by calculating the monthly amount on your car loan. Once you know how much you are supposed to pay on your car loan, you can adjust your monthly budget accordingly. It will also save time and give error-free calculations.
The Angel One online car loan EMI calculator will calculate the monthly EMI, the total payable amount, and the total interest on the loan.
How To Use the Angel One Car Loan EMI Calculator?
The usage of the Angel One car loan EMI calculator is simple and straightforward. Open the calculator and follow the steps below:
- Enter the loan amount
- Enter the annual interest rate on the loan
- Enter the duration of the loan
That’s it. The online car loan calculator by Angel One computes the monthly EMI on the loan with the total interest and total payable on the loan.
Let us consider an example to understand the usage of the Angel One car loan EMI calculator. Suppose you want to buy a car priced at ₹25,00,000. The interest rate on the loan is 7%, and the tenure is 15 years.
Once you enter these details into the calculator, the calculator computes and displays the results as follows:
- EMI = ₹22,471/month
- Interest = ₹15,44,727
- Total Payable = ₹4,044,727
According to the results, you can check if the monthly EMI fits into your monthly budget or if you need to find a loan with a lower interest rate or increase the tenure of the loan. You can use the online calculator to calculate for various scenarios before making a decision.
Benefits of Angel One Car Loan EMI Calculator
Here are some of the benefits of using the Angel One Car Loan EMI calculator:
- Financial planning: The online car loan EMI calculator by Angel One can help you in planning your monthly finances. As per the EMI amount, you can plan your monthly budget before proceeding with a loan.
- Ease of use: The calculator is simple and straightforward to use, even for first-time borrowers.
- Accurate information: The Angel One online car loan EMI calculator takes the EMI formula and provides accurate results in less than a minute.
- Customisation: You can customise the online calculator to your specific needs, such as the loan amount, interest rate, and loan tenure.
- Free to use: The Angel One online car loan EMI calculator is provided for free. You can use the calculator at any time from anywhere at your convenience. All you need is an active internet connection on your device.
What Are the Factors That Impact Car Loan EMI?
- Loan amount: The higher the loan amount, the higher the EMI will be. Ensure you are considering both the purchase price of the car and your affordability before applying for a loan.
- Down payment: The down payment is the amount of money you pay upfront towards purchasing the car. This reduces your loan amount.
- Interest rate: The higher the interest rate, the higher the EMI will be. Compare interest rates at different banks or financial institutions and go with the best one.
- Loan tenure: The loan tenure is the number of years that you will take to repay the loan. The longer the loan tenure, the lower the EMI will be, but you will end up paying more interest in total. Taking a loan for less tenure will increase your monthly EMI, but the overall interest paid will be less.
Considering all of these factors is important when calculating your car loan EMI. By understanding the factors that impact your EMI, you can make an informed decision about the type of loan that is right for you.
Fixed Interest Rate vs Floating Interest Rate
Like any other loan, car loans are offered with a fixed or floating interest rate. You can talk to your lender and opt for an interest rate type that is beneficial for you. Here is the difference between the fixed and floating rate of interest.
- Fixed Interest Rate: A fixed interest rate remains constant throughout the loan. For example, if you get a car loan of ₹5,00,000 at a fixed interest rate of 6% for a 10-year duration, the interest rate will be fixed for the entire tenure. On opting for a fixed interest rate, you will know how much you will be paying on the loan every month without any surprises.
- Floating Interest Rate: It is also known as a variable or adjustable rate that fluctuates based on market conditions, potentially leading to changes in payments over time.
For example, if you get a car loan of ₹5,00,000 at a floating interest rate of 6% for a 10-year duration. If the RBI changes the repo rate according to the market conditions, the interest rate also fluctuates.
Car Loan EMI Calculator FAQs
Can I use the Angel One online car loan EMI calculator for a used car loan?
Yes. You can use the Angel One online car loan EMI calculator for both new and used car loans.
What is the maximum tenure provided on a car loan?
The maximum tenure provided on a car loan depends on the bank or financial institution. But note that the higher the loan tenure, the higher the interest you will be paying.
Can the interest rate impact the EMI of the car loan?
Yes, the interest rate directly impacts the EMI of the car loan. The higher the interest rate, the higher your monthly payments will be.
Is the car loan EMI fixed for the entire duration of the loan?
No, the car loan EMI is not fixed for the entire duration of the loan. It can change if the interest rate changes (if you have opted for a floating rate) or if you make a partial prepayment.
Does the Angel One car loan EMI calculator consider a fixed rate or floating rate of interest?
Angel One considers the interest rate figure you enter on the calculator. You can enter the fixed interest rate and floating interest rate to calculate the EMI amount of your car loan and make a choice that benefits you.