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EMI Formula:
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EMI (Equated Monthly Installment) is the fixed amount paid by a borrower to a lender at a specified date each calendar month. It is used to pay off both interest and principal each month, so that over a specified number of months, the loan is paid off in full.
The calculator uses the standard EMI formula:
Where:
Explanation: The formula calculates the fixed monthly payment required to fully amortize a loan over its term, accounting for both principal and interest components.
Details: Accurate EMI calculation helps borrowers understand their monthly financial commitment, plan their budget effectively, and compare different loan offers to choose the most affordable option.
Tips: Enter the principal amount in ₹, annual interest rate in percentage, and loan term in months. All values must be positive numbers to get accurate results.
Q1: What is the typical car loan interest rate in India?
A: Car loan interest rates in India typically range from 7% to 15% per annum, depending on the lender, loan amount, tenure, and borrower's credit profile.
Q2: How can I get the lowest car loan interest rate?
A: To get the lowest rates, maintain a good credit score, provide a higher down payment, compare offers from multiple lenders, and negotiate with banks/NBFCs.
Q3: What factors affect car loan EMI?
A: The three main factors are principal amount, interest rate, and loan tenure. Higher principal or interest rate increases EMI, while longer tenure reduces EMI.
Q4: Is there any prepayment penalty on car loans?
A: Many lenders charge prepayment penalties, especially on fixed-rate loans. However, some banks offer penalty-free prepayment options - check with your lender.
Q5: What is the maximum car loan tenure available?
A: Most lenders offer car loans with tenure ranging from 1 to 7 years (12 to 84 months), depending on the age of the car and the borrower's profile.