A car loan EMI calculator can help you through the process of deciding the model of the car to the planning for your monthly budget to make the car loan EMIs affordable. Many banks, financial institutions and websites of third party loan comparisons offer this calculator.
This calculator first calculates the compound interest on the principal loan amount according to the interest rate given. The calculation generally takes place along the lines of these rules - on total payable amount, first pay the interest component and the part remaining of the EMI is the principal.
EMI Amount = [P x R X (1 + R) ^ N] / [(1 + R) ^N - 1]
Here, P stands for principal loan amount, R stands for interest rate and N stands for number of instalments (monthly). If the yearly interest rate is 12%, then the monthly rate of interest will be 12/ (12 x 100).
Do check our car loan eligibility calculator for knowing your loan eligibility.
You can eliminate the errors which can occur during manual calculations and obtain accurate result by using an online car loan EMI calculator.