Car Affordability calculator computes the price of the car you can afford today. Enter your maximum monthly savings, current savings, the value of the current car (if any), the interest rate on loan and loan tenure. This calculator will tell you the price of the car which you can buy today.
The first step in Car buying journey is to know how much amount you can afford. Fintra has created a Car loan affordability calculator to help you understand your budget for your Dream Car. Simply enter your monthly EMI, Down payment amount, Car loan interest rate and time period of the loan and you will get your amount
There is a general 28/36 Rule for Affordability. According to this rule, your Car Loan EMI should be less than 28% of your pre-tax income. Also Total loans (Home, Car, personal, etc) should be less than 36% of your pre-tax income. Lenders definitely look at these parameters along with other factors such as Credit Score before issuing you a loan.
Multiple below given factors affect Car Loan affordability such as:
1. Income: Income is amongst the most crucial factor for your loan affordability. Having a stable income increases the chances and you will get a much better picture of what amount of loan you'll comfortably repay.
2. Age: Younger people have a higher probability of getting the large loan amount due to long repayment ability as compared to an older individual.
3. Income Sources: Having multiple income sources increases the chances of getting a loan.
4. Current EMIs: Having a large number of Existing loans and their EMIs will have a negative impact on Car affordability.
5. Credit score: A better credit rating makes the authorization process faster and easier and vice versa.