Purchasing a four-wheeler is necessary for some people, whereas owning a car represents a goal and aspirational value for others. India has the fourth-largest 4-wheeler market in the world and will increase at an annual growth rate of 11.3% from 2020 to 2027.
Exhausting all of your savings to buy a car is not an ideal decision. Therefore, the most popular alternative is to get a car loan and pay back the loan in manageable monthly installments.
If you purchase a 4-wheeler on loan, you must make monthly EMI payments to pay off the loan over the specified period. A car loan EMI calculator is the most popular tool for calculating your monthly EMI payment.
A car loan EMI calculator not only calculates your monthly EMI payable amount within several minutes but also breaks down the principal and interest amount, thus, providing your overall cost of borrowing.
While searching for a loan to buy your dream car, an EMI calculator is practically a necessity. The EMI calculator is a valuable tool for several factors, which are as follows:
Manual EMI calculations can be very challenging. Additionally, you are at risk of making errors when computing the results. Therefore, an EMI calculator is easy to use because it has a simple interface and provides precise results in several minutes.
An amortization schedule breaks down your loan repayment into months showing the principal and interest amount payable for each EMI. The amortization table is accessible through EMI calculators once you provide the details of your preferred car loan.
You can use EMI calculators to establish a financial budget. Before you find the right EMI amount that doesn't affect your financial security, you can experiment with different loan amounts and tenure. Finding the ideal car becomes much easier when you have a budget.
By using a car loan EMI calculator, you will be able to determine how your loan repayment term affects your overall liabilities. For example, while using the calculator, changing the time duration of a loan from 4 years to 2 years does not result in a significant increase in the EMI amount.
The principal amount, interest rate and tenure are the key variables determining your car loan's EMIs. You can calculate the estimated monthly EMI amounts using an EMI calculator using a standardized formula:
EMI = [P x R x (1+R)^N] / [(1+R)^N-1]
You can experiment freely with different principal amounts and tenure combinations using a car loan calculator until you get the desired results.
Considering the workload, lengthy working hours and unpredictable traffic, a car is necessary. However, purchasing a car out of your savings makes little sense. Instead, you must seek out a car loan and repay it in manageable monthly installments.
Various variables impact your prospects of obtaining a car loan. For example, your income and credit score determine your car loan eligibility. You can even negotiate with the lender for a reduced interest rate if you have a high credit score and income level.