Car Loan Calculator
Car Loan Calculator
Purchasing a high-end car could be a dream for many individuals for which taking car loans is the most feasible option.
Car loans allow you to buy a dream car with an option to repay the loan on a regular monthly EMI, which makes it affordable for many individual to fulfill their dreams.
How does the Car Loan Calculator work?
In order to use the Car loan calculator, one should know the following terms:
Principal is the actual amount that an individual has borrowed for the purchase of a car.
Rate of Interest is the interest percentage charged on the total principal by the lender for the amount borrowed. For calculating EMIs, we should make sure that the rate of interest is used in formula on a monthly basis.
Number of installments are the total number of monthly EMI’s you would pay for the entire loan tenure. For example: If loan tenure is 5 years, then the number of monthly installments would be 5 X 12 months = 60.
Car Loan EMI is the regular monthly payment that an individual has to pay to the lender for the car loan. It is a sum of part of total principal and part of your total interest which is equated to monthly installments.
Total Liability is the total of Principal and Interest.
Formulas:
E = P*r* [(1+r)n / {(1+r)n-1}]
A = E*n
Example:
Assume you borrow Rs 1000000 at an interest of 5% for 10 years.
Car Loan EMI = 1000000*5/12* [(1+5/12)120 / {(1+5/12)120-1}] = Rs. 10607
Total Liability = 10607 * 120 = Rs. 1272840
Why should you use a Car Loan Calculator online?
Using the Car Loan Calculator online helps you in making a financial decision on whether to take a loan or not? on a real-time basis. Thus, helping you grab an opportunity quickly.
Advantages of using a Car Loan Calculator:
Listed below are few advantages of using a Car Loan Calculator:
The Car Loan Calculator helps you in calculating the EMI, interest and total liability irrespective of the currency denomination, that is, you can use it for calculation of money in INR, USD, JPY, EUR or any currency of your choice.
A Car Loan Calculator helps you in making decisions quickly that is because you can compare the various loan providers on parameters like Principal, Tenure or Interest Rate on a real time basis.
The Car Loan Calculator does all the mathematics functions online with few inputs on your end. No coding or doing the maths is needed, this makes it easy to operate.
You can get the monthly EMI amounts for a car loan, which helps in making a good financial budget.
Note-
The above calculator uses a Fixed Interest rate for calculation of your loan EMI.
For Floating Interest rate loans its best to calculate your loan EMIs with three main factors:
- If Interest rate goes down. How much can it go?
- If interest rate goes up. How much can it go?
- If the interest rate is same throughout loan period.
Having your EMI calculated with the above 3 factors in mind will help you in knowing the max pain in a high interest rate scenario which is more critical in financial planning then a lower interest rate scenario.
A successful Financial plan focuses more on max pain so that the worst can be dealt with proper planning.
A lower interest rate scenario would be a cherry on top of your financial plan.