Buying a luxurious car is no longer a difficult decision. It can be done very simply by opting for a car loan. A car loan is one of the most popular loan items that lenders offer these days. This car loan will help you finance the purchase of whichever car you’ve set your sights on.
However, before you apply for a car loan, you can check out an auto loan calculator. It is very important to check the calculator before you apply for a loan since it can help you decide the right tenure for the loan and the EMI for the given interest rate. It can also help you compare between different lenders.
Using the car loan EMI calculator is extremely simple. It is available for free on most of the lender’s websites.
How to use them?
An auto loan calculator requires the following information:
The EMI will be calculated based on the details input. The calculation is automatic and instant. You do not need to wait for a long time to calculate the instalment amount. You do not even see the formula. The calculation is instant once you enter the details and press the submit button. It’s as simple as that.
Some calculators also provide an amortisation schedule which shows the breakup of each EMI into principal repayment and interest payment.
Things to remember:
This loan is a secured loan. The car is hypothecated to the lender and the lender’s name appears as the owner in the registration certificate and insurance papers. In case of any default, the lender can sell the car to recover the dues.
The lender does not finance the entire cost of the car. Precisely why, some EMI calculators ask for the bike model and the brand to calculate the loan amount. Generally, lenders give out between 65 to 80 per cent of the ex-showroom price of the car as a loan. The amount over and above that must be financed by you. So, be sure to have some savings when you want to purchase your vehicle. However, lately, some banks have started giving out zero down payment loans. This means the lender finances the entire cost of car.
The loan interest rate depends from lender to lender. Some lenders will have their interest rate input in the calculator whereas others will allow you to input the interest rate. You can compare the interest rates online on the lender websites and find out the EMI in each of the case.
The loan tenure and EMI have an inverse relationship. The shorter the duration, the more the EMI and vice versa. However, the total interest paid out in both cases differs. The longer the duration, the more interest you pay out. Be careful of this while selecting the loan tenure.