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.
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]
‘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)
|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|
|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|
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|
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 –
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.
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]
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.
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 –
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.
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 –
A: Both salaried and non-salaried individuals who are 21 years to 65 years old can avail SBI car loans.
A: The least possible EMI for SBI Car loan is Rs. 1,622 / Lakh.
A: SBI offers you loan tenure options ranging from 2 years to 7 years.
A: No, a feature of SBI car loans is that there is no penalty on prepayment of car loans.
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
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
A: Yes, State Bank of India offers the option to prepay the car loan without any penalty
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.
A: No, for getting a car loan from SBI, the loan applicant needs to have a minimum credit score of 700.
A: Yes, you can opt for a co-applicant to take car loan from SBI to increase your car loan eligibility