Total Interest Payable
Total Amount Payments
While earlier car rental services were making movements easier, the pandemic made us realize the need for owning a car. Having your own car not only keeps you safe from the dangers of infections in public transportations but has a vehicle at your disposal at any moment in time. Hence, you can go to any place the moment the need arises and not get delayed due to external factors.
Hassle-free Car Loan
Now owing a car is super easy and you don’t have to have the requisite amount of fund to invest in the dream car. Different banking bodies offer a host of facilities to make that car purchase hassle-free. You can get a car loan according to your eligibility which you can pay off through Equated Monthly Instalment or EMI. The Car Loan EMI Calculator helps you to know exactly how much EMI you would be required to pay for a particular principal amount, loan duration, and the interest rate. It makes applying for loan simpler for you know beforehand the amount of money that you would need to repay on a monthly basis. You can use the Car EMI Calculator to calculate the EMI for any car (new or pre-owned) just by supplying all the essential information comprising of the required sanction loan amount, desired loan period, and interest rate to get a detailed view of the annual principal and interest repayment amounts.
Eligibility Criteria for Car Loan
Minimum Age: 18 years
Maximum Age: 60 years for salaried individuals and 65 years for self-employed
Yearly Income: Minimum 3 lakh per annum
Car Model: Any model, new or pre-owned, any year
Documents Needed for Car Loan
- KYC documents
- Individual photos of each applicant
- Proforma Invoice
- Application Form
- Income proof (Latest 2 Salary Slips & Latest Form 16 for salaried individuals; Latest LTR for self-employed; Audited Balance Sheet for private companies and partnership firms)
- Business proof for self-employed loaners (Registered Lease with Other Utility Bills/ Current Account Statement/ MSME or SSI Registration Certificate/ VAT or Sales Tax Certificate/ Shop & Establishment Act Certificate/ Electricity Bill /Telephone Bill)
- Latest three-month bank statement
Car Loan EMI- an Introduction
A Car Loan EMI is the Equated Monthly Instalments payable by the borrower in lieu of getting the initial principal loan value for purchase of new or pre-owned car. The EMI is scheduled to be paid on a specific date on a monthly basis all through the pre-agreed loan period. The Car Loan EMI is the summation of the principal loan value and the interest incurred on that value, broken up into equal parts and distributed over the loan tenure. With the Car Loan EMI, you could know beforehand the expected EMI to be paid on a monthly basis. It would help you to manage your monthly budget and apply for a loan amount whose EMI would be manageable in the present earnings.
Car Loan EMI Calculator
To use the Car Loan EMI Calculator, insert the relevant data like principal amount, duration of loan, and interest rate, and the Car Loan EMI Calculator would instantly display the approximate applicable EMI. Keep in mind to go through the amortization schedule as it provides a break-up of principal and interest repaid every year in the course of the loan duration.
The EMI contains a part of principal loan repayment value along with the rate of interest on that loan. Hence, EMI = Principal Value + Interest Paid. The EMI is generally constant for the overall loan duration.
Mathematically, EMI is calculated as under:
P x R x (1+R)^N / [(1+R)^N-1]
P = Principal amount of the loan
R = Rate of interest
N = Number of monthly instalments.
Payment Modes for Car Loan EMI
Banks generally offer numerous options to pay off the Car Loan EMI. Thus, you could opt for the loan repayment option that is most convenient for you.
In the instance that you have an account in the bank from where you have applied for the loan, then you could direct it for one-time standing instructions to make an automatic debit from your account for the particular EMI value on a monthly basis.
National Automated Clearing House (NACH) or Electronic Clearing Service (ECS):
You could also establish a mandate for NACH or ECS to your current bank to make automatic debit from your account for the precise EMI value on a particular date for loan repayments through monthly EMIs.
Post Dated Cheques:
Giving post-dated cheques to the lending bank is a traditional approach to loan repayment. You could provide post-dated cheques to your lender for the overall loan period with the exact monthly EMI amount.
Advantage of Car loan EMI calculator
- Straightforward and hassle-free online tool to help in knowing the final principal and interest amount of the Car Loan. Simply enter the information like New Car or Pre-Owned Car, Principal Amount, Loan Period, Rate of Interest, and you would get to know about the approximate EMI amount even before you go forward with the loan processing.
- Delivers instantaneous results.
- Time and energy saving as it takes away the hassle of engaging in manual computations.
- Easy to access.
- Assists you in knowing your exact EMI.
- Aids you in loan planning.
Effect of Loan Tenure on Car Loan EMI
The Car Loan EMI is indirectly proportional to the loan tenure. Hence, if you opt for a longer loan tenure then you would have to pay lower EMI. Conversely, if you opt for a short loan tenure, then you would have to pay greater EMIs.
Outcomes of Skipped EMI
Skipped EMIs reflect poorly on your credit score and show you as a risky candidate for future lenders. Hence, you should only borrow that much Car Loan which you can comfortably pay off each month. It would save you from any skipped EMIs and maintain your creditworthiness. However, if due to any reason you have to skip paying a particular month’s EMI, then you would get a warning letter from the bank and may even have to pay a late payment penalty. Moreover, there would be a direct impact on the loan tenure, and the loan paying duration would increase provided the EMIs remain the same.
You must remember that recurrent failures to pay the EMIs could put you at a risk for default and in such a scenario your car may be seized as a collateral for Car Loan payment. So, ensure to pay all your EMIs in a timely manner.
Part Pre-payment and Foreclosure of Car Loan
Banks do have the provision for Part Pre-payments of Car Loan but it is subject to part payment charges. Similarly, you can make a foreclosure of the car loan by paying the entire outstanding dues, but it would be subject to charges.
Flexibility in Car Loan EMI
You can opt for a fixed rate of interest or a floating rate of interest. In a fixed rate of interest, the Equated Monthly Instalment remains fixed throughout the loan tenure. Conversely, in a floating rate of interest, the EMI value fluctuates according to the market change in interest rate.