1. What is EMI?

EMI (Equated Monthly Installment) is the fixed payment amount made by a borrower to a lender at a specified date each calendar month. For car loans, EMI payments include both principal and interest components.

2. How Does the EMI Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( P \) — Principal loan amount (Rs)
• \( R \) — Monthly interest rate (annual rate divided by 12, in decimal)
• \( N \) — Loan tenure in months

Explanation: The formula calculates the fixed monthly payment that would pay off the loan over its term with interest.

3. Importance of EMI Calculation

Details: Knowing your EMI helps in financial planning and choosing the right loan tenure. It helps compare loan offers from different banks like HDFC and ICICI.

4. Using the Calculator

Tips: Enter principal amount in Rs, annual interest rate in percentage, and loan tenure in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between HDFC and ICICI car loan rates?
A: Interest rates vary based on credit profile, loan tenure, and current bank offers. Always compare rates before choosing.

Q2: How does tenure affect EMI?
A: Longer tenures reduce EMI but increase total interest paid. Shorter tenures have higher EMIs but lower total interest.

Q3: Are there any hidden charges in car loans?
A: Banks may charge processing fees, prepayment penalties, or other charges. Always read the loan agreement carefully.

Q4: Can I prepay my car loan?
A: Most banks allow prepayment after a lock-in period, sometimes with prepayment charges.

Q5: What factors affect car loan approval?
A: Credit score, income, employment stability, loan-to-value ratio, and vehicle type affect approval chances.