# SBI Car Loan EMI Calculator

Updated on: 19th October, 2023 IST

State Bank of India (SBI) is easily among the most well-reputed financial institutions of the country. Millions of people have trusted SBI with their savings and even look up to the bank for finance solutions. Other than providing personal and home loans, the State Bank of India even provides both used and new car loans. Moreover, the institution offers highly useful tools like the SBI loan EMI calculators, which helps customers with careful loan management. The SBI car loan EMI calculator, for instance, helps the loan applicants find out their monthly payments and hence, manage their finances better. It also helps them analyze whether or not the amount they plan to borrow is affordable for them.

## How Does SBI Car Loan Calculator Work?

All accurate car loan EMI calculators are based on the formula and hence, even the SBI car loan calculator is based on the same calculation -

**EMI = [P x R x (1+R) ^N] / [(1+R) ^N – 1]**

Where,

‘P’ stands for the Principal amount or the borrowed sum

‘R’ stands for the monthly rate of interest

‘N’ stands for the number of instalments through which the borrowed amount will be returned

Please note - The formula given above does not account for the pre-payment that one might make towards the borrowed amount (loan taken from SBI)

## SBI Car Loan Calculator India 2020

- SBI Car loan can be availed for an EMI as low as Rs 1,559 per lakh.
- Moreover, SBI now offers a car loan tenure of up to 7 years.
- At the moment, the lowest new car loan interest rate that the State Bank of India offers is 8.00%. At this rate of interest, the EMI per lakh for the total amount comes out to be Rs 4,523 for a 2-year loan and Rs 2,028 for a 5-year loan.

Loan Amount | 2 Year Loan | 4 Year Loan | 7 Year Loan |
---|---|---|---|

Rs 3 Lakh | Rs 13,568 | Rs 7,324 | Rs 4,676 |

Rs 6 Lakh | Rs 27,136 | Rs 14,648 | Rs 9,352 |

Rs 12 Lakh | Rs 54,273 | Rs 29,296 | Rs 18,703 |

## SBI Car Loan Features

- Only those who are at least 21 years old can borrow money to purchase a car from the State Bank of India. Also, the loan applicant must be not more than 65 years old at the time of applying.

- The maximum car loan amount that SBI offers is upto 85% of on-road price.

- Interest rates for SBI car loan are a minimum of 8 per cent and they increase based on the down payment, borrower's net income and other factors like tenure and the amount being borrowed.

- At present, the car loan processing fee in SBI is 0.51% of the cost of the car. However, the minimum payable amount is Rs 1,020 and maximum is Rs 10,200.

## SBI Car Loan EMI Calculator Tenure

- In the table that we have given below, you can see the EMI for various loan amounts borrowed at the minimum possible rate of interest of 8 per cent. As can be observed the EMI changes as the tenure of the loan changes from 2 years to 7 years.
- The EMI is higher when the loan tenure is shorter. However, the interest paid is higher if the tenure is longer.
- It must be noted here that the EMI you are liable to pay to the bank comprises both the principal component (a fraction of the borrowed amount) and the interest that is applicable at the decided rare of interest at which you borrow the money. While the EMI remains the same throughout the loan period, the interest component of every EMI differs. It's the highest in the first EMI you pay and reduces with every instalment.

Loan Amount | 2 Years | 3 Years | 5 Years | 7 Years |
---|---|---|---|---|

1 Lakh | Rs 4,523 | Rs 3,134 | Rs 2,028 | Rs 1,559 |

3 Lakh | Rs 13,568 | Rs 9,401 | Rs 6,083 | Rs 4,676 |

5 Lakh | Rs 22,614 | Rs 15,668 | Rs 10,138 | Rs 7,793 |

10 Lakh | Rs 45,227 | Rs 31,336 | Rs 20,276 | Rs 15,586 |

## EMI Calculator to calculate your interest on vehicle loan at different tenure

The table we have given below shows that longer the loan tenure, lower. is the EMI you need to pay to the lender every month. However, the interest you end up paying is considerably more for a given amount in case your loan tenure is longer. For example, if you take a loan of Rs 1,00,000 for a period of 5 years, you need to pay the lowest EMI of Rs 2,028. However, you end up paying Rs 21,658 in interest on a loan of Rs 1,00,000.

On the hand, in case you borrow Rs 1,00,000 from State Bank of India at the lowest available rate for a period of 2 years, you end up paying a higher vehicle loan EMI of Rs 4,523, while paying an interest of just Rs 8,546, which, in contrast, is less than half of what you would pay for the same loan amount borrowed for a tenure of 5 years.

Vehicle Loan EMI for ₹ 1 Lakh loan amount at lowest 8.00% interest rate offered by SBI for different tenures | 2 Years | 3 Years | 5 Years |
---|---|---|---|

SBI EMI for a loan amount Rs 1 Lakh at 8.00% | Rs 4,523 | Rs 3,134 | Rs 2,028 |

Total amount you pay, including interest | Rs 1,08,546 | Rs 1,12,811 | Rs 1,21,658 |

Total interest paid | Rs 8,546 | Rs 12,811 | Rs 21,658 |

## Factors affecting SBI Car Loan EMI

Basically, there are three major factors that affect the EMI of the car loan taken from State Bank of India. These have been discussed below -

**Amount Borrowed –**This is the loan amount you borrow from SBI. In case you apply for a higher loan amount, your EMI will be correspondingly higher. It must be noted here that SBI offers a maximum loan of 85 per cent of on-road price of the car.

**Interest rate -**Interest rate is the rate at which SBI lends you the car loan. A higher interest rate will increase your car loan EMI, which will, in turn, increase the overall cost of the loan. On the other hand, a lower interest rate will lead to lower EMIs. The lowest interest rate offered by SBI is 8 per cent.

**Loan tenure –**This the period for which you borrow money. SBI offers a maximum loan tenure of 7 years for car loans. It must be noted that higher the loan tenure, lower will be the EMI but you end up paying more interest.

## SBI Car Loan Amortization Calculator

Basically, an amortization schedule is a table of periodic loan payments that informs the borrower about the principal component and interest component of every EMI he pays to the lender until the loan is paid off completely. It should be noted here that the EMI remains constant throughout the loan tenure but the principal and interest components of every EMI differ. For example, if you borrow Rs 2 lakh for 2 years at an interest rate of 9.25 per cent, the EMI for this loam amount turns out to be Rs 9,160. The total annual EMIs that are required to be paid is Rs 1,09,919. The table we have below shows the EMI schedule for 2 years –

Year | Interest Paid During The Year | Principal Repaid During The Year | Total Amount Paid During The Year (Interest + Principal) | Outstanding Principal |
---|---|---|---|---|

2020 | Rs 3,025 | Rs 15,295 | Rs 18,320 | Rs 1,84,705 |

2021 | Rs 13,047 | Rs 96,872 | Rs 1,09,919 | Rs 87,832 |

2022 | Rs 3,767 | Rs 87,832 | Rs 91,599 | Rs 0 |

The interest component is the highest in the first EMI, which means the first payment you make has the lowest principal component. With every passing EMI, the interest component reduces while the principal component goes up. In the table we have above, on a car loan of Rs 2 Lakh, taken at the lowest interest rate of 9.25%, the EMI that is required to be paid is Rs 9,160 and an annual total of EMIs is Rs 1,09,919. Over here, the interest component is Rs 14,523 while the principal component is ₹ 95,396 in first year of the loan tenure. Hence, you end up repaying only 47.7 per cent of the total principal after paying 12 EMIs during the first year. In the second year, the interest component is around 4.84 per cent while the principal component is around 95.16 per cent.

## SBI Car Loan Calculator Formula

All accurate loan EMI calculating tools, even the SBI car loan calculator, is based on a standard formula that has been given below -

**EMI = [P x R x (1+R) ^N] / [(1+R) ^N – 1]**

Where,

P stands for the principal amount (basically the money you borrow)

r is the rate of interest per month which is calculated as rate of annual income/ (12*100)

n is the loan tenure of loan in months

E is the EMI (equated monthly payment)

For example, if you take a new car loan for Rs 7,00,000 for a loan tenure of five years (60 months) at an interest of 10%. Your monthly payment for this car loan after as per the above formula will be Rs 14,873.

## SBI Car Loan Tips

Before you go ahead and apply for a used or new car loan at SBI, here are a few factors that you should keep in mind -

**Figure out the amount you should borrow**: It is necessary to make an accurate estimation of the loan amount you need to borrow before you approach a bank. You should decide the sum to be borrowed after accounting for your monthly expenses and financial requirements. Also, based on the EMI you can easily afford to pay, try to opt for lowest loan tenure to save the interest.

**Calculate your SBI car loan eligibility**: It needs to be kept in mind that your loan application will be rejected if you try to borrow more than what you're eligible for. The eligibility of a loan applicant is calculated as per his repayment capacity based on the monthly income. SBI provides car loan up to 85 % of the on-road price of the vehicle, which means the remaining amount needs to be funded by the borrower on his own. Hence, in case the remaining 15 % of the on-road cost of the vehicle is higher than your available funds, you might need to approach a lender who offers more loan, which, however, might turn out to be more expensive due to a higher rate of interest and even higher EMIs. Basically, there are two ways to ascertain your eligibility.

**Multiplier based loan amount eligibility** – SBI figures out your loan eligibility by applying a multiplier to your net take-home salary. This is the least complicated way to find out the loan eligibility of a loan application that is used by the banks. Mostly, it turns out to be 2.5 to 3 times the annual income for salaried individuals and 6 times the annual income for self-employed professionals. Also, this multiplier is calculated based on your employer company's reputation, stability, size and growth in turnover.

**FOIR based loan amount eligibility **– SBI also estimates your Fixed Income to Obligations Ratio (FOIR) to figure out the maximum EMI you can pay based on your current income and other monthly expenses. State Bank of India applies a certain ratio to your income to try and ascertain the monthly expenses and then adds your other EMI obligations to gauge the fixed obligations. The proportion of fixed income to your calculated fixed obligations gives your FOIR. In most cases, banks are known to lend up to a maximum FOIR of 0.50. Based on the FOIR, the bank also calculates the maximum EMI you can pay. This assessment of SBI could be different than your own estimate and hence, it could require you to change the loan amount in accordance with the lender's calculations.

## SBI Car Loan EMI Prepayment

In case you wish to pay back your car loan before the tenure gets over, you might need to pay a small penalty. However, a feature of SBI car loans is that there are no prepayment charges and hence, on prepayment of the outstanding loan, you need not pay any penalty. Also, in case you wish to prepay only a part of the loan, SBI offers you two options -

**Reduce your loan tenure:**In this option, you continue to pay the same EMI as earlier but your loan tenure is shortened based on the prepayment you make.

**Reduce the EMI:**In this option, you reduce the EMI while your loan tenure remains the same as before. This is a good option for those who need to take care of higher monthly expenses and need to reduce their EMI burden by a bit.

## FAQs

**Q: Who can avail SBI Car Loans?**

**A: **Both salaried and non-salaried individuals who are 21 years to 65 years old can avail SBI car loans.

**Q: What is the minimum EMI limit for SBI Car Loan?**

**A: **The least possible EMI for SBI Car loan is Rs. 1,622 / Lakh.

**Q: What is the tenure for SBI Car Loan?**

**A: **SBI offers you loan tenure options ranging from 2 years to 7 years.

**Q: Is there a penalty on the prepayment of SBI car loans?**

**A: **No, a feature of SBI car loans is that there is no penalty on prepayment of car loans.

**Q: Why should I calculate SBI loan EMI before taking a loan?**

**A**: It is required to calculate car loan EMI before taking a loan. The benefits of calculating your SBI car loan EMI are listed out below-

- If EMI turns out to be higher than your monthly budget, you need to apply for a lower loan amount that suits your monthly budget and make EMI lighter on the pocket.

- Given that you need to pay every month, you should plan your spending accordingly.

- Based on the EMI amount, you need to make a prepayment of your car loan

**Q: What is the lowest EMI per lakh offered by SBI on Car loan?**

**A: **SBI offers a car loan at a minimum interest rate of 8.00% and hence the lowest EMI on per lakh loan amount is turns out to be Rs 1,622

**Q: Can I prepay my SBI car loan?**

**A: **Yes, State Bank of India offers the option to prepay the car loan without any penalty

**Q: Is there any processing charge on car loan from SBI?**

**A: **SBI charges a processing fee of 0.51% of the loan amount on car loans. However, the minimum chargeable processing fee is Rs 1,020 and Maximum is Rs 10,200.

**Q: Will I get the car loan from SBI if I have a bad credit score?**

**A: **No, for getting a car loan from SBI, the loan applicant needs to have a minimum credit score of 700.

**Q: Can I have a co-applicant while applying for a Car loan with SBI?**

**A:** Yes, you can opt for a co-applicant to take car loan from SBI to increase your car loan eligibility

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