How to Calculate Car Loan Through Loan Calculator

How to Calculate Car Loan Through Loan Calculator?

When you’re looking to finance a new or used car, it’s important to figure out what kind of loan is best for your budget. This car loan calculator can help you do just that. By entering in some basic information about the price of the vehicle, down payment, interest rate, and loan term, you can see what your monthly payments would be. You can also see how much interest you would pay over the life of the loan.

If you’re not sure what kind of loan you should get, or what terms are best for you, this calculator can help you compare different options side-by-side. For example, you can see how a shorter loan term with a higher interest rate would affect your monthly payment, or how a longer loan term with a lower interest rate might save you money in the long run.

This calculator is a great tool to help you budget for your new car purchase. Knowing what kind of payments you’ll be looking at can help you shop within your means and avoid getting in over your head.

How to Calculate Car Loan Through Loan Calculator
Credit: investopedia

How to calculate car loan through Loan Calculator?

There are some compulsory fields which you have to fill before using the car loan calculator:

Car Loan amount- Enter the total amount you want to borrow for buying a car. It should be the inclusive of all on-road costs, charges, and taxes. The minimum loan amount that most of the lenders offer is Rs.1 lakh.

Loan Tenure- It is the time period within which you have to repay the loan amount. The maximum tenure offered by most of the lenders is 7 years. So, you can enter any value between 1 to 84 months.

Rate of Interest- It is the cost that a lender charges for providing the loan facility. The interest rate on a car loan starts from 8.70% p.a.

Processing Fee- It is the fee charged by banks for processing your loan application. The processing fee ranges between 0.50% to 2% of the loan amount plus taxes, with a minimum of Rs.500 and maximum of Rs.10,000.

Pre-Payment Charges- Some lenders charge a fee for prepaying the car loan before the scheduled tenure. Prepayment is allowed by most of the banks after 12 EMIs have been paid. The charges are 2% to 4% of the principal outstanding.

Now that you know all about car loans and how to use a car loan calculator, let’s take a look at some frequently asked questions about this type of financing.

FAQs about Car Loan Calculator

Q1. How is loan amount calculated?

The loan amount is generally calculated by taking into consideration the on-road price of the car, minus any down payment that you make. So, if the on-road price of the car is Rs.10 lakh and you make a down payment of Rs.2 lakh, the loan amount would be Rs.8 lakh.

Q2. How is interest calculated on a car loan?

Interest on a car loan is generally calculated using the simple interest method. This means that interest is charged on the principal loan amount only, and not on any accumulated interest.

Q3. How is EMIs calculated?

EMIs are generally calculated using the equated monthly installment method. This means that each month, a fixed amount is paid towards the loan, which includes both principal and interest. The amount of the EMI remains the same throughout the tenure of the loan.

Q4. What is the minimum and maximum loan tenure?

The minimum loan tenure is generally 12 months, while the maximum loan tenure is 60 months. However, some banks may offer loans with a tenure of up to 84 months.

Q5. What is the minimum and maximum loan amount?

The minimum loan amount is generally Rs.1 lakh, while the maximum loan amount is Rs.20 lakh. However, some banks may offer loans of up to Rs.30 lakh.

Q6. What is the processing fee?

Processing fees are charged by banks for processing your loan application. The processing fee ranges between 0.50% to 2% of the loan amount plus taxes, with a minimum of Rs.500 and maximum of Rs.10,000.

Q7. Are there any prepayment charges?

Some banks charge a fee for prepaying the loan before the scheduled tenure. Prepayment is allowed by most banks after 12 EMIs have been paid. The charges are 2% to 4% of the principal outstanding.

Conclusion

A car loan calculator is a great tool to help you budget for your new car purchase. Knowing what kind of payments you’ll be looking at can help you shop within your means and avoid getting in over your head. Be sure to compare offers from multiple lenders to get the best deal on your car loan.

When using a car loan calculator, be sure to enter all relevant information accurately to get the most accurate payment estimate. Remember that your actual payments may be slightly higher or lower than what the calculator estimates, depending on the interest rate and other terms of your loan.

If you have any further questions about car loans or how to use a car loan calculator, be sure to ask your lender. They’ll be happy to help you get the answers you need.

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