IIFL

Car Loan EMI Calculator

Buying a car is an exciting experience. However, along with the excitement often comes anxiety about being able to afford the monthly payments or EMIs. This is where a car loan EMI calculator comes in handy. A car loan EMI calculator is an online tool that allows you to calculate the approximate EMI you will have to pay monthly for your car loan. Knowing the estimated EMI amount in advance helps you assess your repayment capacity better and pick a car loan that fits your budget.

Let's look at what a car loan EMI is, how a car loan EMI calculator works, and the key advantages of using one.

What is Car Loan EMI?

EMI or Equated Monthly Installment refers to the fixed payment amount you pay every month to repay your car loan within the agreed tenure. Car loan EMIs are calculated by taking into account the following factors:

Loan amount (price of the car after downpayment)
Interest rate
Loan tenure
Processing fees

The EMI comprises of two components - principal amount and interest amount.

In the initial months, the interest component is higher, and the principal component is lower. As you continue paying the EMIs over the months, the interest component decreases, and the main element increases. This ensures that by the end of the loan tenure, the entire loan amount is repaid along with the interest accrued.

What is a Car Loan EMI Calculator?

A car loan EMI calculator is an online tool which allows you to calculate the EMI amount you will have to pay for a car loan based on the loan details you input.

Here are the key features and workings of a car loan EMI calculator:

Inputs required: The EMI calculator will ask you to enter information like loan amount, interest rate, loan tenure, and processing fee. Some calculators may ask for details like repayment frequency (monthly/annually).
Auto EMI calculation: Based on the inputs provided, the calculator will automatically calculate and display the EMI amount you need to pay every month.
Adjustable inputs: You can change the loan details like amount, interest rate, tenure, etc., to see the impact on EMI. This allows you to play around with different combinations to arrive at an EMI you are comfortable with.
Amortization schedule: Most EMI calculators also provide the loan amortization schedule that shows the breakup of principal & interest components of EMI across the tenure.
Download/Email options: The amortization schedule and EMI amount can be downloaded or emailed for future reference.

How to use IIFL Car Loan EMI Calculator?

Many lenders provide free online car loan EMI calculators on their websites to help potential borrowers get easy access to this tool.

Let us see how to use the car loan EMI calculator provided by IIFL:

Visit calculator page- Go to the IIFL [Car Loan EMI Calculator page]
Enter loan amount - Select the car price or enter the loan amount you need.
Select tenure - Choose a convenient repayment tenure from 12 months to 84 months.
Enter interest rate - Enter the interest rate offered by IIFL or slide to select rate.
Click Calculate - The calculator will show the loan details summary and monthly EMI amount.
Toggle parameters - Change loan amount, tenure, and interest rate to see the impact on EMI.
View amortization - Click the amortization schedule toggle to see the month-wise breakup.
Download/Email - Save or email the detailed EMI schedule.

The intuitive interface and customizable inputs make it easy to arrive at an optimal EMI suited to repayment capacity.

How Does Car Loan EMI Calculators Work?

Car loan EMI calculators are powered by a mathematical formula called the [PMT (Principal, Interest, Term) formula]

Here is an overview of how the PMT formula works to arrive at the EMI amount:

Step 1: The calculator takes the loan amount, tenure, and interest rate as inputs.

Step 2: The interest rate is divided by 12 to arrive at the monthly interest rate as EMIs are paid monthly.

Step 3: The loan amount, monthly interest rate, and loan tenure in months are fed into the PMT formula below:

EMI = [P x R x (1+R)^N]/[(1+R)^N-1]

Where,

P is the loan amount
R is the monthly interest rate
N is the loan tenure in months

Step 4: The formula calculates the fixed EMI amount you need to pay every month for the specified tenure to repay the loan.

This mathematical logic lets the calculator quickly compute the EMI once you input the basic loan details.

Car Loan Amortization Schedule

The EMI calculator also provides an amortization schedule with a month-on-month breakup of the principal and interest components within the EMI amount.

Here is an example car loan amortization table:

Month	Opening Balance	Interest	Principal	EMI	Closing Balance
1	₹5,00,000	₹4,167	₹11,667	₹15,834	₹4,88,333
2	₹4,88,333	₹4,069	₹12,765	₹15,834	₹4,75,568
3	₹4,75,568	₹3,963	₹13,871	₹15,834	₹4,61,697

The amortization schedule shows how, with every EMI, the outstanding loan amount keeps reducing, and more is repaid towards the principal.

The schedule clarifies the decreasing interest outgo and helps assess the actual cost of borrowing.

Advantages of using Car Loan EMI Calculator

Using a car loan EMI calculator comes with many benefits:

Estimate EMIs in Advance: A car loan EMI calculator allows you to predict your monthly installments before applying for a loan. This upfront clarity helps you evaluate if the loan fits your budget, preventing financial surprises later on.
Choose Optimal Loan Terms: You can fine-tune your loan by adjusting the principal amount, tenure, and interest rate in the calculator. This flexibility helps you find a comfortable EMI that aligns with your financial capabilities.
Compare EMIs Across Lenders: EMI calculators enable you to calculate EMI amounts from different lenders or loan products. This empowers you to shop around and identify the most affordable loan option, saving you money.
Assess Interest Costs: The calculator provides an amortization schedule, giving you a clear picture of how much interest you'll pay over the loan's duration. This insight helps you make informed decisions about your loan.
Plan Finances Better: Knowing your EMI amount allows you to budget effectively. You can plan your expenses to ensure timely EMI repayments, avoiding any financial strain.
Faster Loan Processing: Having a predetermined budget EMI amount streamlines the loan selection and approval process. It makes you a well-prepared applicant and expedites the loan approval.
Available 24x7: Online EMI calculators are accessible round the clock from anywhere. This convenience means you can perform EMI calculations at your convenience, without needing to visit a physical branch or wait for assistance.

FREQUENTLY ASKED QUESTIONS (FAQ)

Q1. Is there any limit on the loan amount or tenure that can be used in the EMI calculator?

Most EMI calculators allow you to input any loan amount and tenure. However, final loan eligibility will be as per lender norms.

Q2. Does the EMI amount shown include processing fees?

The EMI amount excludes processing fees or other charges. These are collected separately by lenders.

Q3. Can I get a loan if the EMI exceeds my current affordability?

Lenders will check repayment capacity before approving a loan. Opt for a lower loan amount or longer tenure to arrive at an affordable EMI.

Q4. What is the impact of interest rate changes on my EMI?

A higher interest rate increases your EMI amount. A lower interest rate decreases the EMI amount.

Q5. How frequently is the EMI payable - daily, weekly, or monthly?

For car loans, the EMI payment frequency is fixed as monthly. The EMI amount is paid every month on a specified date.

Q6. Can I foreclose the loan once I start repayment?

Yes, most lenders allow you to foreclose the loan by paying the outstanding principal. However, check with the lender on any foreclosure charges applicable.

ATTENTION INVESTORS

Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020
Update your mobile number & email Id with your stock broker/depository participant and receive OTP directly from depository on your email id and/or mobile number to create pledge.
Pay 20% upfront margin of the transaction value to trade in cash market segment.
Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued vide circular reference NSE/INSP/45191 dated July 31, 2020 and NSE/INSP/45534 dated August 31, 2020 and other guidelines issued from time to time in this regard.
Check your Securities /MF/ Bonds in the consolidated account statement issued by NSDL/CDSL every month.
Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors.
KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."

www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.

Risk Disclosure on Derivatives

9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
On an average, loss makers registered net trading loss close to Rs. 50,000.
Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.

Copyright © IIFL Securities Ltd. All rights Reserved.

Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248

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We are ISO 27001:2013 Certified.

This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes.

ATTENTION INVESTORS

Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020
Update your mobile number & email Id with your stock broker/depository participant and receive OTP directly from depository on your email id and/or mobile number to create pledge.
Pay 20% upfront margin of the transaction value to trade in cash market segment.
Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued vide circular reference NSE/INSP/45191 dated July 31, 2020 and NSE/INSP/45534 dated August 31, 2020 and other guidelines issued from time to time in this regard.
Check your Securities /MF/ Bonds in the consolidated account statement issued by NSDL/CDSL every month.
Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors.
KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."

www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.

Risk Disclosure on Derivatives

9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
On an average, loss makers registered net trading loss close to Rs. 50,000.
Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.

Copyright © IIFL Securities Ltd. All rights Reserved.

Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248

We are ISO 27001:2013 Certified.

This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes.