A car loan is a great facility offered by banks and Non-banking finance companies. It enables you to buy your dream car without having to pay lump sums amounts or draining your savings. You can repay the loan in equated monthly instalments over tenures lasting up to seven years. Moreover, you can avail of 90% to 95% finance against the loan. However, before taking on this high-value loan, you must ensure you know how much it will cost you.
A car loan EMI calculator is one such tool that can help you analyse the cost of the loan. Here’s how you should use it to your advantage.
Shortlist a lender and visit their website
The EMI calculator for car loan in India is available on the internet and mobile app platforms like iOS and Android. However, the best place where you can find this calculator is on lender websites. You should visit your preferred lender’s website, where you will find this calculator under the car loan section.
Enter the principal amount you need
After locating the auto loan EMI calculator, you need to enter the principal loan amount you need. First, you need to decide whether you want maximum finance or if you would prefer to reduce the cost of the loan by paying a decent down payment.
Making a down payment enables you to avail lower interest rates against the loan. Also, it would help if you considered the costs associated with loan processing fees, road taxes, stamp duty, loan administration charges, registration charges and so on, and then enter the principal loan amount needed.
Enter the interest rate
The next tab in the EMI calculator is that of the car loan interest rate. You first need to check the minimum interest rate levied by your lender. Typically, the interest rate offered to you depends upon the down payment you provide and the tenure you choose. If you can provide a decent down payment and opt for lower tenure loans, you can get a low interest.
Note that every borrower is looking for the lowest car loan EMI, but it may not be possible to get one, especially if you are looking for maximum finance and high-tenure loans.
Enter your preferred loan repayment tenure
In this last tab of the car loan calculator, you must enter your preferred loan repayment tenure. As mentioned above, you can repay the car loan in tenures lasting up to seven years or 84 months. You must enter the tenure figure in months in the EMI calculator.
Calculate the EMI
After entering the figures mentioned above, you can now calculate the EMI amount payable against the values entered in the calculator. If you find that the EMI amount exceeds your budget, you can click on reset and enter the figures in the calculator again.