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    How to Use a Car Loan EMI Calculator

    Car loan EMI calculators are extremely handy when seeking a car loan. They help you understand the affordability and reality of the loan. This tool can help you determine which loan is cheaper and which loan terms would be better for you. It’s a hard task to process an interest rate percentage for the loan amount you wish to take. And so, people usually look at the EMI amount and determine the affordability if it fits their budget. But you may end up spending more for the loan without realising it. An EMI Calculator will depict a clear picture of your loan in simple monetary terms, which you can see digits rather than figures.

    Where to find the Car Loan EMI Calculator

    On the BankBazaar homepage, you can click on the menu and locate “Finance Tools”. In the drop down menu under Finance Tools, click on “EMI calculator”. You will be directed to the calculator page.

    EMI Calculation Process

    The EMI calculator is extremely easy to use and the process is quick. To use the calculator, you need to enter the following details.

    • Principal loan amount you are seeking
    • The loan term in years and months
    • The interest rate as a percentage
    • The processing charges if any, as a percentage
    • If you can predict that you will make pre-payments, you can click on yes. If not, choose no.

    Once you have entered your information, you can click on calculate and your results will be generated immediately.

    EMI Results

    The results that are displayed will give you the following information.

    • Your monthly loan EMI

      This is the equated monthly instalment you are required to pay every month.

    • Break-up of the total amount payable

      The calculator will generate the details such as the loan amount, the total interest payable, the processing charges and the cost of the loan in monetary terms.

    • Your loan details

      The information entered into the calculator will also be displayed for you to double-check.

    • Amortization Schedule

      The amortization schedule depicts a complete breakdown of the loan for the full tenure. You can view the payment to be paid for a full year. You can click on the + sign next to the year to view the breakdown of the loan each month. The amortization schedule will give you the following details:

      • Year and month
      • Principal paid
      • Interest paid
      • Total payment
      • Outstanding Loan Balance

      Every EMI is made up of two components: Principal and Interest. The amortization schedule helps you see how much of interest is charged in each EMI. This way you can plan pre-payments or part-payments. Foreclosing the loan towards the end of its tenure may not be sensible as the interest component is very low and might be lesser than the penalties.

    Conclusion

    The Car Loan EMI Calculator can be used by anyone. It can be used before you take a loan, during your loan or even when you plan on foreclosing the loan. This tool comes in handy to find out which loan is best for you. You can also use an EMI calculator for any loan such as home loans and personal loans.

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