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ICICI Bank is a renowned name in banking industry in India and offers low-interest rates on new and used car loans for the purchase new/used cars available at any Indian car dealership. The existing customers of the bank enjoy the benefits of pre-qualified car loans.
A car loan EMI calculator makes it easy for loan applicants to calculate the EMI amount to be paid towards their car loan. It is an online tool that helps to ascertain the repayment of ICICI Bank Car loan EMI. This car loan EMI calculator allows the loan applicants to decide on the amount of loan to be borrowed, ensuring that their monthly finance is rightly managed.
The car loan EMI calculator works on a formula that helps in computing EMI quickly. This formula allows the borrower to calculate the EMIs by entering required data (principal amount, tenure, interest rate) and generate the EMI amount on the basis of the given data. There are numerous EMI calculators available online that need general details of the loan such as loan tenure, processing fees, interest rate, principal amount, etc to help you calculate the total repayment amount. However, the accuracy of the result depends a lot on the information given by the borrower. The amount of detailed data entered is directly proportional to accurate EMI results.
With the technological advancement and swift rate at which the demand of four-wheelers is increasing, there are a lot of youngsters who strive to purchase their car as soon as possible. Not only cars are a status symbol within the Indian society, having a car means travelling comfortably. Since everyone does not have monetary sources to purchase the cars on their salary or savings alone, car loans have gained huge popularity. There are a number of websites on internet that offer car loan information and free use of car loan EMI calculator. The use of these car loan EMI calculators gives user an insight of the amount that they have to pay monthly to bank loan repayment.
You can calculate the EMI amount with the help of the following mathematical formula:
EMI amount = [P x R x (1+R)^N]/[(1+R)^N-1]
Where P, R and N are variables,
P stands for Principal amount
R stands for Rate of interest
N stands for loan tenure in months
This indicates that if a person ‘A’ takes a car loan of Rs. 10 lakhs with the average interest rate of 12% then the approximate EMI will be Rs.
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
EMI = [1000000 x 12/100 x (1+12)^24] / [(1+12/100)^24-1]
EMI = Rs. 47, 073
Let us understand these above-mentioned three variables in details:
Principal Loan Amount- This is the amount that is lent to the borrower by the bank or the lender. This loan amount depends on the ex-showroom price of the vehicle. If the amount of the loan is higher, the EMI amount is higher too.
Loan Tenure- The tenure of the loan is the time given to the borrower by the lender/bank to repay the loan amount along with the interest. Since the repayment of loan amount is done every month, thus the tenure is always calculated in months. This implies that tenure of 1 year is equal to 12 months, 2 years is equal to 24 months and so on.
Rate of interest- This is the rate at which interest is charged on the loan amount sanctioned to the borrower. The interest rate varies with the loan scheme taken and lender or the bank from which the amount is borrowed. It is important to compare rate of interest across the banks before opting for a car loan.
The car loan EMI calculator uses principle, rate of interest and tenure as the variables for calculating the EMI amount; thus, it is understood that these variables are the factors that affect the EMI of the car loan. However, there are several other factors as well that affect the EMI calculations. Just like interest rates vary with a number of factors, car loan EMI also depends on various different factors. For instance,
In addition to these factors, the eligibility of the loan also depends on the car make or model selected by the applicant.
Car loan EMI calculator gives a hassle-free EMI calculating experience to the borrowers who don’t have to run across numerous lenders for getting a quote on EMIs. All they have to do is enter the values of the three variables and they get accurate EMI amount results. The most important benefit of using car loan EMI calculator is that, it gives a clear idea to the borrower about the budget they should have beforehand. Also, use of car loan EMI calculator helps the user to arrange a better money flow in-time for monthly instalments.
1. How does the loan tenure affect the interest charges?
It is important that the borrower understands that the interest rate is not the only factor that decides the total amount to be paid for the car loan. Yes, the loan tenure plays an important part in the calculated amount to be paid against the car loan, irrespective of the interest rate one gets.
2. What are the interest rates charged by the lenders currently for car loans?
The interest rates applicable on car loans depend on the repo rate decided by Reserve Bank of India. Based on this, banks provide car loans with annual interest rates ranging from 8.35% to 12%. During the festive season, some banks waive off certain charges on the loans like processing charges, documentation charges, etc. Along with this, credit score of the borrower also plays a decisive role on the interest rate. If the credit score of an individual is higher, they can bargain for lesser interest rates.
3. Should an individual use car loan EMI calculator or MS Excel calculator?
If the person knows how to use MS Excel well, then using MS excel might prove to be a good idea to calculate car loan EMI. However, car loan EMI calculator is a customized tool that can be used by a layman to calculate the EMIs. Hence, car loan EMI calculator is the preferred choice amongst the loan borrowers.
4. Is the EMI calculated by banks different from the ones calculated using the car loan EMI calculator?
No, there is no difference in the amount, if you enter the same values in both cases. It is important to understand that a slightest of change in the variables entered can pose difference in the final amount. The resultant amount depends upon the variables used in the formula during calculation.
5. How does the car loan EMI calculator help the borrower in understanding the EMI to be paid after they repay a certain amount of principal during the tenure?
In case an individual pays a sum as prepayment during the tenure, he/she can feed the information like the balance outstanding principal and tenure (as provided by the bank on prepayments) in the car loan EMI calculator. This way the individual will get an idea of what amount he/she needs to pay.
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