Car Loan Amortization Table
There are a number of factors that are considered by banks and non-banking financing companies (NBFCs) before offering loans to individuals.
One of the major criteria that is taken into account is repayment capability. If a loan is offered to an individual which exceeds his or her repayment capacity, the chances of the borrower defaulting increases significantly.
In order to avoid incurring any losses, banks and NBFCs take into account a number of aspects to determine whether a candidate is eligible for a particular loan amount. Before applying for a loan, candidates can also check the amount they will have to pay as equated monthly installments or EMIs to ensure that it doesn't exceed their repayment capacity. If you apply for a loan that exceeds your repayment capacity, banks might reject your loan, or worse, you can end up with a large debt. A bad loan can also impact your credit score and reduce your chances of getting a loan in the future. To avoid such a conundrum, it is advisable to check your loan EMI using an amortization table or EMI calculator before applying for a loan.
Amortization table overview
When you want to purchase your dream car but are running short on funds, you can avail a loan to overcome the credit crisis. However, it is important that you check the amount of EMI you will have to pay towards your loan beforehand using an online EMI calculator or amortization table.
An car loan amortization table is a structured account of a loan using a number of details such as loan amount, interest rate, loan tenure, and other factors that can impact loan borrowing and repayment. This table shows how the loan will progress throughout the entire tenure including the EMIs to be paid each month, the total interest, the overdue amount after each EMI, and other data related to the debt.
Benefit of using car loan amortization table
When a car is purchased using a loan, the debt along with the interest is usually repaid over a long period of time. However, each loan is unique in terms of the payable amount and repayment tenure due an array of variables that affect the loan. Therefore, borrowers and lenders come to a mutual agreement regarding the terms of the loan before the credit is offered. The duration of repayment, quantum of loan, interest rate, and monthly installments are determined subject to the repayment capacity of the borrower. While each credit scheme has its own set of advantages for the borrower as well as the lender, long-term car loans are generally amortized or equally distributed over the entire loan tenure so as to reduce the risk of defaulting.
In addition to calculating the EMI for a loan, the amortization table helps the customer understand exactly how the debt will be repaid. Therefore, using this table will not only assist borrowers increase their chances of loan approval, but can also help them save time and money in the long run.
Car Loan Amortization table calculator
While an car loan EMI calculator shows only the monthly installment that needs to be paid towards a loan for a fixed rate of interest over a predetermined period of time, amortization tables give a more clear picture about how the loan progresses. This table can be used for a number of loans such as car loans, personal loans, home loans, two-wheeler loans, etc. In order to understand this concept better, see the example given below:
Loan amount - Rs.3 lakh
Rate of interest - 12%
Repayment tenure - 5 years
Number of installments - 60
Down payment - Rs.0
Payment interval - Monthly
Installment number - 1
Date of installment - March 2018
Installment Number | Installment Date | Opening Balance | EMI | Outstanding Loan | Interest | Principal |
1 | Mar-18 | Rs.3,00,000 | Rs.6,673 | Rs.2,96,327 | Rs.3,000 | Rs.3,673 |
2 | Apr-18 | Rs.2,96,327 | Rs.6,673 | Rs.2,92,617 | Rs.2,963 | Rs.3,710 |
3 | May-18 | Rs.2,92,617 | Rs.6,673 | Rs.2,88,870 | Rs.2,926 | Rs.3,747 |
4 | Jun-18 | Rs.2,88,870 | Rs.6,673 | Rs.2,85,086 | Rs.2,889 | Rs.3,784 |
5 | Jul-18 | Rs.2,85,086 | Rs.6,673 | Rs.2,81,264 | Rs.2,851 | Rs.3,822 |
6 | Aug-18 | Rs.2,81,264 | Rs.6,673 | Rs.2,77,404 | Rs.2,813 | Rs.3,860 |
7 | Sep-18 | Rs.2,77,404 | Rs.6,673 | Rs.2,73,505 | Rs.2,774 | Rs.3,899 |
8 | Oct-18 | Rs.2,73,505 | Rs.6,673 | Rs.2,69,567 | Rs.2,735 | Rs.3,938 |
9 | Nov-18 | Rs.2,69,567 | Rs.6,673 | Rs.2,65,590 | Rs.2,696 | Rs.3,977 |
10 | Dec-18 | Rs.2,65,590 | Rs.6,673 | Rs.2,61,573 | Rs.2,656 | Rs.4,017 |
11 | Jan-19 | Rs.2,61,573 | Rs.6,673 | Rs.2,57,516 | Rs.2,616 | Rs.4,057 |
12 | Feb-19 | Rs.2,57,516 | Rs.6,673 | Rs.2,53,418 | Rs.2,575 | Rs.4,098 |
13 | Mar-19 | Rs.2,53,418 | Rs.6,673 | Rs.2,49,279 | Rs.2,534 | Rs.4,139 |
14 | Apr-19 | Rs.2,49,279 | Rs.6,673 | Rs.2,45,099 | Rs.2,493 | Rs.4,180 |
15 | May-19 | Rs.2,45,099 | Rs.6,673 | Rs.2,40,877 | Rs.2,451 | Rs.4,222 |
16 | Jun-19 | Rs.2,40,877 | Rs.6,673 | Rs.2,36,613 | Rs.2,409 | Rs.4,264 |
17 | Jul-19 | Rs.2,36,613 | Rs.6,673 | Rs.2,32,306 | Rs.2,366 | Rs.4,307 |
18 | Aug-19 | Rs.2,32,306 | Rs.6,673 | Rs.2,27,956 | Rs.2,323 | Rs.4,350 |
19 | Sep-19 | Rs.2,27,956 | Rs.6,673 | Rs.2,23,563 | Rs.2,280 | Rs.4,393 |
20 | Oct-19 | Rs.2,23,563 | Rs.6,673 | Rs.2,19,126 | Rs.2,236 | Rs.4,437 |
21 | Nov-19 | Rs.2,19,126 | Rs.6,673 | Rs.2,14,644 | Rs.2,191 | Rs.4,482 |
22 | Dec-19 | Rs.2,14,644 | Rs.6,673 | Rs.2,10,117 | Rs.2,146 | Rs.4,527 |
23 | Jan-20 | Rs.2,10,117 | Rs.6,673 | Rs.2,05,545 | Rs.2,101 | Rs.4,572 |
24 | Feb-20 | Rs.2,05,545 | Rs.6,673 | Rs.2,00,927 | Rs.2,055 | Rs.4,618 |
25 | Mar-20 | Rs.2,00,927 | Rs.6,673 | Rs.1,96,263 | Rs.2,009 | Rs.4,664 |
26 | Apr-20 | Rs.1,96,263 | Rs.6,673 | Rs.1,91,553 | Rs.1,963 | Rs.4,710 |
27 | May-20 | Rs.1,91,553 | Rs.6,673 | Rs.1,86,796 | Rs.1,916 | Rs.4,757 |
28 | Jun-20 | Rs.1,86,796 | Rs.6,673 | Rs.1,81,991 | Rs.1,868 | Rs.4,805 |
29 | Jul-20 | Rs.1,81,991 | Rs.6,673 | Rs.1,77,138 | Rs.1,820 | Rs.4,853 |
30 | Aug-20 | Rs.1,77,138 | Rs.6,673 | Rs.1,72,236 | Rs.1,771 | Rs.4,902 |
31 | Sep-20 | Rs.1,72,236 | Rs.6,673 | Rs.1,67,285 | Rs.1,722 | Rs.4,951 |
32 | Oct-20 | Rs.1,67,285 | Rs.6,673 | Rs.1,62,285 | Rs.1,673 | Rs.5,000 |
33 | Nov-20 | Rs.1,62,285 | Rs.6,673 | Rs.1,57,235 | Rs.1,623 | Rs.5,050 |
34 | Dec-20 | Rs.1,57,235 | Rs.6,673 | Rs.1,52,134 | Rs.1,572 | Rs.5,101 |
35 | Jan-21 | Rs.1,52,134 | Rs.6,673 | Rs.1,46,982 | Rs.1,521 | Rs.5,152 |
36 | Feb-21 | Rs.1,46,982 | Rs.6,673 | Rs.1,41,779 | Rs.1,470 | Rs.5,203 |
37 | Mar-21 | Rs.1,41,779 | Rs.6,673 | Rs.1,36,524 | Rs.1,418 | Rs.5,255 |
38 | Apr-21 | Rs.1,36,524 | Rs.6,673 | Rs.1,31,216 | Rs.1,365 | Rs.5,308 |
39 | May-21 | Rs.1,31,216 | Rs.6,673 | Rs.1,25,855 | Rs.1,312 | Rs.5,361 |
40 | Jun-21 | Rs.1,25,855 | Rs.6,673 | Rs.1,20,441 | Rs.1,259 | Rs.5,414 |
41 | Jul-21 | Rs.1,25,855 | Rs.6,673 | Rs.1,14,972 | Rs.1,204 | Rs.5,469 |
42 | Aug-21 | Rs.1,14,972 | Rs.6,673 | Rs.1,09,449 | Rs.1,150 | Rs.5,523 |
43 | Sep-21 | Rs.1,09,449 | Rs.6,673 | Rs.1,03,870 | Rs.1,094 | Rs.5,579 |
44 | Oct-21 | Rs.1,03,870 | Rs.6,673 | Rs.98,236 | Rs.1,039 | Rs.5,634 |
45 | Nov-21 | Rs.98,236 | Rs.6,673 | Rs.92,545 | Rs.982 | Rs.5,691 |
46 | Dec-21 | Rs.92,545 | Rs.6,673 | Rs.86,797 | Rs.925 | Rs.5,748 |
47 | Jan-22 | Rs.86,797 | Rs.6,673 | Rs.80,992 | Rs.868 | Rs.5,805 |
48 | Feb-22 | Rs.80,992 | Rs.6,673 | Rs.75,129 | Rs.810 | Rs.5,863 |
49 | Mar-22 | Rs.75,129 | Rs.6,673 | Rs.69,207 | Rs.751 | Rs.5,922 |
50 | Apr-22 | Rs.69,207 | Rs.6,673 | Rs.63,226 | Rs.692 | Rs.5,981 |
51 | May-22 | Rs.63,226 | Rs.6,673 | Rs.57,185 | Rs.632 | Rs.6,041 |
52 | Jun-22 | Rs.57,185 | Rs.6,673 | Rs.51,084 | Rs.572 | Rs.6,101 |
53 | Jul-22 | Rs.51,084 | Rs.6,673 | Rs.44,922 | Rs.511 | Rs.6,162 |
54 | Aug-22 | Rs.44,922 | Rs.6,673 | Rs.38,698 | Rs.449 | Rs.6,224 |
55 | Sep-22 | Rs.38,698 | Rs.6,673 | Rs.32,412 | Rs.387 | Rs.6,286 |
56 | Oct-22 | Rs.32,412 | Rs.6,673 | Rs.26,063 | Rs.324 | Rs.6,349 |
57 | Nov-22 | Rs.26,063 | Rs.6,673 | Rs.19,651 | Rs.261 | Rs.6,412 |
58 | Dec-22 | Rs.19,651 | Rs.6,673 | Rs.13,175 | Rs.197 | Rs.6,476 |
59 | Jan-23 | Rs.13,175 | Rs.6,673 | Rs.6,634 | Rs.132 | Rs.6,541 |
60 | Feb-23 | Rs.6,634 | Rs.6,673 | Rs.27 | Rs.66 | Rs.6,607 |
Total: |
|
| Rs.4,00,380 |
| Rs.1,00,407 | Rs.2,99,973 |
Note: The above mentioned amortization table is hypothetical. The table is subject to change if any of the factors impacting the values are altered such as down payment, interest rate, loan tenure etc.
Conclusion
Lending money for a car purchase is always a risky prospect since there are chances for the lender to incur losses due to the non-repayment of the debt. However, calculating the car loan EMI might help mitigate some of the lender's risk by matching the repayment capability of the borrower. While a car loan EMI calculator only shows the amount of EMI for a loan with a fixed loan tenure and interest rate, an amortization table gives a complete account of the progress of the loan. This table not only helps borrowers manage their finances better, but can also help them save money and time if used properly.
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