Car Loan EMI Calcuator

Here are the most important things you should consider while getting a car loan.

• 1. Interest rate - Go for the loan with the lowest interest rate.
• 2. Additional Charges - processing fee, prepayment charges, late payment penalty are some of the important points you need to check before taking a loan.
• 3. Tenure and Max Loan Amount - Select a lender who gives you a loan that you can afford.
  -If Max loan amount is lower, you will have to shell out more money upfront to buy the car.
  -If Tenure is lower, your per month instalment amount will increase.
• 4. Eligibility - Banks may have stricter eligibility requirements compared to NBFCs or other financial institutions.

As a general rule, banks or other lenders offer you a car loan 3 to 4 times your annual income. So if you are earning ₹25000 per month, you can generally get a loan of ₹10-12 lakh to buy a new car.

There are 2 important factors that decide how much max loan amount you can get to buy a new car.

• 1. Car Value - Most banks/lenders offer a maximum loan of up to 90% of the on-road price or 100% of the ex-showroom price.
• 2. Income - As a thumb rule, you can get a loan up to 3 to 4 times your gross annual income. So if you are earning ₹5 lakh per annum, you can generally get a maximum loan of ₹15 - 20 lakh to buy a new car.

₹20,276. We have assumed you want to take a car loan of Rs 10 lakh for 5 years. We have taken the interest rate for your car loan as 8%.

CIBIL score is one of the important criteria to get a loan in India. However, it is not the only criteria.

Banks tend to be stricter in their requirements while giving a loan. However, there are many NBFCs and financial institutions which also gives loan to people with a lower CIBIL score.

But, a lower CIBIL score will definitely lead to a higher interest rate for your loan. So it is always advisable to maintain a high credit score.

If you miss paying your car loan instalment, you may be subjected to multiple charges and penalties.

Most banks charge 2-4% of your outstanding loan amount as a penalty if you miss your payment.

There may be additional charges if you have a standing instruction running in your account and it failed because of a lower balance in your account.

Yes, most banks / financial institutions allow pre-closure of your car loan. It is advisable to check the pre-payment charges with your bank beforehand.

Many banks / financial institutes offer 0 pre-payment penalties. So, don't forget to ask about the pre-payment penalty before you get a loan for your car.

Complete list of documents you will need to get a car loan.

• 1. KYC documents, identity proof and current address proof,
• 2. PAN Card (copy),
• 3. Bank statement,
• 4. Income proof (Form 16, pr Salary Slips, or ITR).

Banks offer better interest rates and tenure for your car loan. However, there are many NBFCs and other financial institutions that also offer car loans. You can take a car loan from any of these lenders.

Down payment is the amount you would pay upfront to buy your car. Bank give you a loan for the remaining amount.

For example, if the on-road price of your car is Rs 10 lakh, and you decide to take a loan of 6 lakh from the bank, your down payment value will be 4 lakh.

As a general rule, you will have to pay a minimum of 10% of the car value as a down payment.

Some lenders/banks offer car loans up to 90% of the on-road price.

Some lenders offer car loans up to 100% of the ex-showroom price but you will have to pay the difference of on-road and ex-showroom price as a down-payment.

Here is how you should choose your car loan tenure.

• 1. If you select a higher tenure loan, your EMI or monthly instalment amount will go down. But, you will have to pay a lot many EMIs so you will end up paying a lot more interest over the years.
• 2. If you select a lower tenure loan, your EMI amount will go up, but your interest payment will go down drastically.

Good Practice will be to chose the shortest possible tenure for which you can afford an EMI amount.

In India, most banks/financial institutions offer flexible interest rate car loans. So your EMI can go up or down if the interest rate changes in the future. Some banks also offer to change tenure if you do not want to change your instalment amount.

Here is a step-by-step guide to close your car loan.

• Step 1. In case, the loan is not completely paid yet, you will have to settle the dues with the bank.
• Step 2. Bank/financial institution will release No Dues certificate, any unused checks and form 35.
• Step 3: You will now have to go to RTO to get a new RC books your current RC will be stating your car is owned by the lender. (it is called hypothecation)
  
  You need to collect the following documents and then visit the RTO:
  
  Original Form 35, and copies signed by the registered owner and the bank/lender, Bank NOC, copy of your PAN Card, copy of active car insurance, original RC, address proof, copy of PUC Certificate
• Step 4. After finishing the required procedure at RTO, you will get a new RC which states now you are the true owner of the car. Congratulations, your car loan is closed!!