EMI stands for Equated Monthly Instalment, sometimes also known as Easy Monthly Instalments.
When a person borrows money from banks or other financial institutions to buy/purchase a car, it is known as a car loan.
Equated Monthly Instalments, also called EMI, is an amount of fixed payment paid by the borrower to the lender on a fixed date of every month.
Car Loan EMI = P x R x [(1 + R)N ÷ ((1 + R)N - 1)]
Where P is the principal amount, R is the monthly interest rate, and N is the number of months of the loan. The value of EMI will change every time you change any of these three variables.
For example - Let's consider the principal, interest rate, and the tenure of the loan to be Rs.12,00,000, 8.75% and 20 yrs respectively.
First we calculate the monthly interest rate, R = 8.75/12/100 = 0.0072916
Then we calculate the number of months, N = 20 x 12 = 240
Finally, put all three values in the formula as follows -
EMI = 12,00,000 x 0.0072916 x [(1 + 0.0072916)240 ÷ ((1 + 0.0072916)240 - 1)]
EMI = Rs.10,405
Yes, we can ensure that the Car Loan EMI calculator is perfectly accurate and will give you 100% error-free results every time as it was developed with complete precision and tested thoroughly before reaching you.
The principal amount is the total amount of money that you borrow from the bank or other financial institutions whenever you take a loan.
For example, if you take a loan of Rs.1 crore from the bank, then Rs.1 crore is the principal amount. If you pay off Rs.30 Lakhs, then the principal balance now consists of the remaining Rs.70 Lakhs.
The interest rate is the amount the lender will charge from you and is a percentage of the principal amount.
It is a period that starts from the date of disbursement of the loan and ends on the date of the last payment of EMI. It is mostly calculated in years.
When a person gets the agreed-upon loan amount transferred into his/her bank account, it is called disbursement of the loan. The person can then use this amount to purchase the house for which the loan was taken.
As the name Equated Monthly Instalment suggests, EMI is paid every month on a fixed date.
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