Buying a car is exciting. However, it also brings anxiety about being able to afford monthly payments or EMIs. Equated monthly instalments are the fixed monthly amount you pay to repay your Car Loan within the agreed tenure.

The EMI consists of two components: principal and interest. A Car Loan calculator is a digital tool that allows you to calculate the approximate EMI you need to pay monthly for the borrowing. Knowing the estimated EMI amount beforehand helps you assess your repayment capacity better and pick a budget-friendly Loan deal.

Features of a Car Loan EMI calculator

This tool is a blessing for Loan borrowers. It helps them calculate the approximate EMI amount payable towards the Loan and keep the funds ready. The following are some of the features of the Car Loan EMI calculator you should be aware of:

• Inputs required: The EMI calculator will ask you to enter information such as Loan amount, interest rate, tenure, and processing fee. Some calculators may ask for details like repayment frequency (monthly/annually).
• Auto EMI calculation: The calculator automatically calculates and displays the monthly EMI amount you must pay based on the provided inputs.
• Adjustable inputs: You can change the Loan details, such as amount, interest rate, tenure, etc., to see the impact on EMI. This allows you to experiment with different combinations to arrive at an EMI you are comfortable with.
• Amortisation schedule: Most EMI calculators also provide the loan amortisation schedule, which shows the breakdown of the interest and principal components of the EMI across the tenure.
• Download or email options: You can download or email the amortisation schedule and EMI amount to your device and email address for future reference.

Amortisation schedule

The Loan calculator provides an amortisation schedule with a month-on-month breakup of the principal and interest components within the EMI amount. For example, over three months, the opening balance is Rs. 5 lakh for Month 1, interest paid is Rs. 4167, principal amount is Rs. 11667, EMI is Rs. 15834, and closing balance is Rs. 488333.

For Month 2, the opening balance is Rs. 488333, the interest paid is Rs. 4069, the principal is Rs. 12765, and the EMI is Rs. 15834. The closing balance is Rs. 475568. For Month 3, the opening balance is Rs. 475568, the interest paid is Rs. 3963, the principal amount is Rs. 13871, the EMI is Rs. 15834, and the closing balance is Rs. 461697.

The amortisation schedule on the Car Loan calculator shows how the outstanding Loan amount keeps reducing with EMIs, and more is repaid towards the principal. It clarifies the decreasing interest outgo and helps assess the actual cost of borrowing.

Conclusion

The EMI calculator is your best friend when buying a new four-wheeler. It gives you complete clarity on the amount you need to repay each month before applying for the Loan. Select an option that fits your budget and kickstarts your new journey.