You always dreamt of owning a luxury sedan but fate was always on the other side. Not anymore! Now you don’t need to travel in congested public transportation vehicles or rely on somebody else to pick you up. For you and your family’s comfort, you can buy a suitable car. How is that possible? Read further.
Sign up for a car loan from the bank. The lender (bank) will disperse a car loan based on your requirement. With this money, you can purchase the car of your dreams. Afterward, you can return the principal, along with the interest, in equated monthly installments (EMI’s).
You can drive, and own, your favorite car by paying the price in low-cost EMI’s. Now, the EMI’s depend on certain factors. You can calculate the EMI by using the EMI Calculator.
This calculator shows accurate EMI costs based on certain parameters. What are these parameters? Let us discuss them in detail.
Terms associated with Car Loan and EMI’s
- Principal – This is the money you borrow from the lender. You will use this money to purchase your dream car. The principal can vary according to your requirement, the policies of the lender, and the cost of the car. You can also opt for 100% finance or you can consider availing a fraction of it.
- Tenure – The tenure of the loan is the time period during which you will repay the principal along with the interest. The repayment is called amount. You can choose the tenure as per your convenience. If the tenure is less, the amount of EMI will be more. If the tenure is longer, the amount of EMI will be less. Now, the tenure depends on your capacity to pay back the EMI’s at a particular amount.
- Interest – Based on the principal and the tenure, the interest is calculated. The interest rate is directly proportional the tenure. However, the interest rate varies for the principal. If the principal is less, the interest will be high and vice-versa. Moreover, the interest may be simple interest or compound interest. For a longer tenure, the interest increases. As the interest is calculated annually, the interest will increase as the tenure increases.
Based on these parameters, you can determine the exact information regarding the EMI’s. You need to choose a suitable principal amount, tenure, and the interest rate. The EMI calculator will display the detailed information for you.
For example, if you enter the loan amount as Rs 500,000, the tenure as 10 years, and interest rate as 10%; the following information will be displayed:
- Total Payment – Rs 7,92,960
- Total Interest Payable – Rs 2,92,960
- EMI Payable – Rs 6,608 (for 10 years)
- Duration – For 5 years, it will be Rs 10,624. For 3 years, it will be Rs 16,134. For 15 years, it will be Rs 5,373.
As you can notice, you can get the desired information regarding EMI’s for your car loan. Based on these values, you can plan to purchase your dream car. Finally, it is time to live your dreams on your own terms. Click here to use the EMI calculator which will help you in planning your dream car budget.