Car Loan Calculator
ET Online | Updated : May 17, 2018, 02.58 PM IST
The car loan calculator helps you calculate the equated monthly instalments (EMIs) you have to pay the lender each month till the loan is fully paid.
The EMI is based on the loan amount, the tenure, and interest rate. On the given loan amount, interest rate and for a specific duration, the calculator will let you know how much EMI will have to be paid.
How to use it
To arrive at the EMI, one has to input:
Loan amount - It has to be between Rs 1 lakh and Rs 40 lakh
Tenure - The tenure has to be between 1 year and 7 years.
Interest rate - It has to be between 1 percent and 50 percent.
Interest rates may vary across lenders as different lenders may offer loans at different rates. For the interest rate, input the rate at which your lender is providing you the loan.
Use the slider to put in different car loan amounts and tenures to arrive at the EMI at which you are comfortable with.
What it shows
The results will show three things -
a. The EMI - This amount that has to be paid each month till the loan is fully paid.
b. The break-up - It shows the interest portion in each month's EMI. The rest is the principal being repaid every month.
c. The amortisation schedule - The amortisation schedule shows the break-up of the interest paid and principal repaid out of the EMI each month till the end of the tenure. The outstanding balance after paying each month's EMI is also shown in the amortisation schedule. This document can be downloaded as a PDF.
How the result arrived at
The formula used for arriving at the EMI is:
EMI = [P x R x (1+R) ^n] / [(1+R)^ n-1]
Here, P= Principal loan amount, R= Rate of interest, n= Number of monthly instalments.
Assuming, P= Rs 7 lakh, R= 11 percent per annum= 11/12= 0.19667 per month, N= 84 months
EMI = =((700000*0.19667 /100*(1+0.19667 /100)^84/((1+0.19667 /100)^84-1))) = Rs 11,986