One of the first things you seek to buy while earning a steady income is a four-wheeler. However, it is impossible to purchase one when your career just begins as they are worth several lakhs. Hence, you need to rely on car loans. Nowadays, you can apply for the four-wheeler loan online or visit the preferred bank’s branch. However, before signing the dotted lines, make sure you use the two tools offered by the banks to the consumers.
One is the eligibility calculator, and the other is a car loan calculator. It helps you understand the actual cost of the vehicle. Following are the reasons you must use the calculator –
- Comparison of lenders
Finding a lender who finances your car loan is not a challenging task. Between banks and NBFCs, you can easily find lenders offering 90 per cent finance of the on-road vehicle price. Thus, your focus should not solely focus on the lender but also the one offering the best interest rates and repayment tenure. The car loan EMI calculator allows you to compare different lenders and understand the payable EMI against different interest rates and tenure. It assists in finding the right lender.
- Accurate results
Once you find the eligibility, you need to set aside a sum for your monthly income towards the loan repayment. If you are unaware of the monthly EMI before the loan gets sanctioned, and discover it does not fit your budget, you could face massive financial loss. The risk of defaulting on EMI repayment also increases. However, the EMI calculator helps understand the precise amount you must save towards the repayment. The results are 100 per cent accurate and help plan your finances.
- Interest rates calculations
The interest rates levied by the lender is one of the essential components of the loan. The payable EMI against the loan depends on the interest rates offered by the lender. Even a slight difference can affect your EMIs. The car loan calculator helps understand the EMI amount against different interest rates. This prepares you for any kind of interest rates that the lender levies, be it high or low.
- Additional costs
Lenders charge other fees as well apart from interest rates. You must pay the processing fees, documentation charges, administrative expenses, stamp duty fees, and additional such costs. Lenders usually mention these on their website, allowing you to prepare for the loan. When you use the car loan EMI calculator, you can factor these costs as a part of the principal amount. You can understand these costs of the loan, over and above the principal value and the sum paid as interest.