Buying a vehicle such as a two-wheeler or a four-wheeler is a dream for most people. This is because it is expensive for many. One easy way of fulfilling this dream is by obtaining a vehicle loan.
Various financial institutions and banks are offering a loan for purchasing a vehicle. Through a vehicle loan, such as a car loan, you can pay back the borrowed amount in EMIs with interest across the entire period or tenure of the loan.
In this article, we will give you a comprehensive guide on a vehicle loan.
What is a Vehicle Loan?
Besides prestige, a vehicle is a convenient means of commuting for you and your family. Gone are the days when owning a vehicle was about being wealthy. You don’t need to save for years to buy a vehicle anymore.
To buy a car or a two-wheeler, various vehicle loans are available where the amount can quickly be repaid in easy installments on a monthly basis and are called EMI(equated monthly installments).
The government reducing the GST on cars to 18% has made buying a car an even more desirable option.
What is Vehicle Loan EMI?
EMI is equated monthly installment, the total amount you’re supposed to repay against the vehicle loan at a monthly interval. It includes both the principal amount and the interest charged.
Vehicle Loan EMI Calculator
When buying a vehicle, you can avail a loan on it and pay regular EMI to pay the loan over an agreed period of time; this time can range from months to years. To know the exact installment amount, a vehicle loan EMI calculator can be used as it is the most popular tool.
It requires information related to the loan amount, the interest rate, and the duration of the loan. This information is used to calculate the EMI in no time.
This EMI calculator also gives the breakup of the principal and interest amount that is payable; thus provides the total cost of the amount that has been borrowed.
Remember that a vehicle loan EMI calculator can also help in checking the loan eligibility amount.
The Benefits of a Vehicle Loan EMI Calculator
There are various benefits of an EMI calculator when buying/purchasing a vehicle, such as
- It makes the calculation hassle-free and provides you with the EMI amount in a few minutes.
- You can compare multiple loans by resetting the calculator.
- They help decide a loan amount depending on the affordability and budget by providing the exact amount of the EMI.
- Various EMI calculators provide graphical representation by giving a break up of the principal and interest amount.
- The total interest paid can be calculated for the entire loan duration.
Importance of Vehicle Loan EMI Calculator
Since there is massive competition in the market on vehicle loan providers, the best deal for you is calculated using an EMI calculator. No lender will ever tell you that they are more expensive. You can only find this out using a calculator.
Also, an EMI calculator helps set your expectations about your vehicle’s finances even before starting the process.
Moreover, the interest rate of various lenders cannot be altered. Still, at least with an EMI calculator on your vehicle loan, you can easily choose the lender with the lowest interest rates available.
The best part of availing a vehicle loan is that you don’t need collateral. Also, the EMIs on your vehicle loan can be paid via various payment methods.
Therefore, it is advised to check with your concerned bank about the method of payments that they accept and whether it works for you or not. Usually, most banks accept cash, cheques, and bank transfers for such payments.