1. What is the Auto Loan Payment Formula?

The auto loan payment formula calculates the fixed monthly payment (PMT) required to repay a loan over a specified term. This is the standard formula used by ICICI Bank and other financial institutions for calculating equated monthly installments (EMIs).

2. How Does the Calculator Work?

The calculator uses the auto loan payment formula:

Where:

• \( PMT \) — Monthly payment (INR)
• \( P \) — Principal loan amount (INR)
• \( r \) — Monthly interest rate (annual rate divided by 12)
• \( n \) — Total number of payments (loan term in months)

Explanation: The formula accounts for both principal and interest components of the loan payment, with interest being front-loaded in the early payments.

3. Importance of Auto Loan Calculation

Details: Calculating your expected monthly payment helps in budgeting and ensures the loan is affordable before committing to a purchase. It also allows comparison between different loan offers.

4. Using the Calculator

Tips: Enter the loan amount in INR, annual interest rate (ICICI's current rate), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is ICICI's current auto loan interest rate?
A: ICICI's rates typically range from 8.75% to 12.5% p.a. depending on loan tenure, vehicle type, and customer profile.

Q2: Does this include insurance and other charges?
A: No, this calculates only the principal and interest components. Additional charges like insurance and processing fees are separate.

Q3: Can I prepay my ICICI auto loan?
A: Yes, ICICI allows prepayment after 12 EMIs, usually with a prepayment charge of 2-5% of the outstanding amount.

Q4: What is the maximum loan tenure ICICI offers?
A: ICICI typically offers auto loans for up to 7 years, depending on the vehicle type and age.

Q5: How does the interest rate affect my payment?
A: Even a 0.5% difference in rate can significantly impact your total payment over the loan term. Always negotiate for the best rate.