Visual EMI Calculator
Loan
Home
Car
Business
Gold
Education
Property
Commercial Vehicle
Personal
Two-Wheeler
Car Loan EMI Calculator by Reducing Balance
EMI
Reducing Balance
Flat Rate
Balloon Payment
Loan Amount
Loan Tenure
Year
Month
Rate of Interest
%
Copy
Share
EMI
21742
Interest
304545
Principal
1000000
Total
1304545
304 K
(3 Lac)
5
Year
1,000,000
256 K
(2 Lac)
Year
Original
Reduced
𝒊
21742
will be
EMI
for
1000000
(1 m/10 Lac)
Loan Amount
for
5
Year
Loan Tenure
at
11.00%
Rate of Interest
.
How to Reduce Interest/ Tenure?
Pay
0
1
2
3
4
5
Extra EMI every year.
𝒊
Increase EMI by
0
2
3
5
7
10
15
20
% every year.
𝒊
Pay Lump-Sum
0
(10 K)
(20 K)
(30 K)
(40 K)
(50 K)
(60 K)
(70 K)
(80 K)
(90 K)
(100 K)
in
0
1
2
3
4
year.
𝒊
Recalculate
Share
Loan
Tenure
Interest
Original
5 year
304545
Reduced
4 year
256216
Saved
1 year
48329
Loan Payment Schedule
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Original
Reduced
Balloon Payment
362 K
(3 Lac)
271 K
(2 Lac)
181 K
(1 Lac)
90 K
0
-
-
-
-
-
2024
2026
2028
You are here
-
Home
»
Car Loan
»
Reducing Balance
Percentage calculator
Fraction calculator
LCM HCF Calculator
Average Calculator
Trigonometry Calculator
Car Loan EMI by Reducing Balance
A Car Loan EMI by Reducing Balance interest on the outstanding principal amount, which decreases as you repay the loan. As a result, EMIs gradually reduce over time, reflecting the lower principal balance. This method generally results in lower total interest costs compared to flat rate loans, as interest is charged only on the remaining balance. Calculate your Car Loan EMI with our easy-to-use Car Loan EMI Calculator by Reducing Balance Calculator. Plan your repayments, understand the interest and get a clear view of your loan details to drive your dream car without hassle.
Calculate Car Loan EMI by Reducing Balance
Enter loan details like loan amount, interest rate, tenure, and choose months or years to calculate car loan EMI by reducing balance.
Click Calculate to view your initial breakdown and calculate car loan EMI by reducing balance based on your inputs.
Customize payment options to calculate your car loan EMI by reducing balance.
Select extra EMIs per year to reduce and calculate your car loan EMI tenure.
Increase EMIs by a percentage to manage and calculate your car loan EMI more effectively.
Select a lump sum payment to reduce interest and calculate your car loan EMI.
Adjust inputs and click Recalculate to update your car loan EMI tenure and interest dynamically.
Reducing Balance EMI formula
To calculate Car Loan EMI, use the Reducing Balance EMI formula for precise results. This calculation helps you understand your repayment obligations clearly.
E
M
I
=
P
×
r
×
(
1
+
r
)
n
(
1
+
r
)
n
-
1
EMI
= Equated Monthly Installments
P
= Principal loan amount
r
= Monthly interest rate
n
= Number of monthly installments
Eligibility Criteria for Car Loan EMI by Reducing Balance
Age and Income:
Applicants should meet the minimum age requirement and have a stable source of income, meeting the lender's specified income threshold for a car loan EMI.
Creditworthiness:
A good credit score is essential, reflecting a positive credit history and repayment behavior, which is crucial for securing a car loan EMI by reducing balance.
Employment Stability:
Borrowers should demonstrate stable employment, typically with a minimum tenure in their current job or business, to qualify for a car loan EMI.
Documentation:
Applicants need to provide necessary documents, including identification proof, income documents, and address proof, to support their car loan EMI application.
Car Loan EMI Calculator by Reducing Balance FAQ
How does Reducing Balance EMI differ from Flat Rate EMI?
Reducing balance EMI charges interest on the decreasing principal, leading to gradually lower payments and lower total interest. Flat Rate EMI charges interest on the full principal throughout the term, resulting in fixed payments and generally higher total interest costs.
What are the advantages of a Car Loan EMI by Reducing Balance?
Car loan EMI by reducing balance typically result in lower overall interest costs compared to flat rate EMIs, as interest is recalculated based on the decreasing principal balance. Borrowers may pay off their loans more quickly with reducing balance EMIs due to the decreasing interest payments over time.
What are the disadvantages of a Car Loan EMI by Reducing Balance?
Car loan EMI by reducing balance may have slightly higher initial payments compared to flat rate EMIs, as interest is calculated on the original loan amount. Although this method offers cost savings, it is more complex and requires borrowers to understand how reducing interest affects their repayment schedule.
×
How extra EMI(s) help?
At the end of the year, you can pay extra EMIs out of your savings. This extra EMI payment will go towards your Loan Amount and save you on the interest as well as tenure of the loan.
Payment
Tenure
Interest
Current
5 year
304545
1 Extra EMI/ year
5 year
▶ 0 year
278513
▶ 26032
2 Extra EMI/ year
5 year
▶ 0 year
257581
▶ 46964
3 Extra EMI/ year
4 year
▶ 1 year
240759
▶ 63786
How increasing EMI helps?
As your income increases each year, you can get your EMI increased from the bank. This allows you to allocate more funds towards paying off the loan amount and save you on the interest as well as tenure of the loan.
Payment
Tenure
Interest
Current
5 year
304545
Increase EMI by 1%
5 year
▶ 0 year
299872
▶ 4673
Increase EMI by 3%
5 year
▶ 0 year
291355
▶ 13190
Increase EMI by 5%
5 year
▶ 0 year
283830
▶ 20715
How Paying Lumpsum Amount helps?
If you receive unexpected income, such as a bonus or tax refund, consider making a lump-sum payment on your loan. This can help reduce the outstanding loan amount and save you on the interest as well as tenure of the loan.
Payment
Tenure
Interest
Current
5 year
304545
Pay 10% in 2nd year
5 year
▶ 0 year
268972
▶ 35573
Pay 20% in 3rd year
5 year
▶ 0 year
266720
▶ 37825
Pay 30% in 4th year
4 year
▶ 1 year
289642
▶ 14903
How to Reduce Interest/ Tenure?
Making early payments towards Principal amount can reduce your Interest and/ or Tenure.
1. How extra EMI(s) help?
At the end of the year, you can pay extra EMIs out of your savings. This extra EMI payment will go towards your Loan Amount and save you on the interest as well as tenure of the loan.
2. How increasing EMI helps?
As your income increases each year, you can get your EMI increased from the bank. This allows you to allocate more funds towards paying off the loan amount and save you on the interest as well as tenure of the loan.
3. How Paying Lumpsum Amount helps?
If you receive unexpected income, such as a bonus or tax refund, consider making a lump-sum payment on your loan. This can help reduce the outstanding loan amount and save you on the interest as well as tenure of the loan.
Let Others Know
✖
Facebook
Twitter
Reddit
LinkedIn
Email
WhatsApp
Copied!