A handy online tool, car loan calculators are designed to help you estimate the monthly payments required to repay your car loan. RAKBANK car loan calculator is one such online tool. Whereas most calculators only show the estimated monthly payment amount, RAKBANK car loan calculator presents the complete repayment reschedule for your loan. And while this schedule is an estimate of your monthly payments, it is still helpful with respect to proper financial planning.
How Does RAKBANK Auto Loan Calculator Works?
As mentioned earlier, RAKBANK offers a universal loan calculator to calculate equal monthly payment amounts for all different types of loans. Car loan calculator requires you to enter a few essential details to provide you with the calculated monthly payment amount.
Let’s cover all the steps involved in using the RAKBANK car loan calculator properly:
Open the common calculator page of RAKBANK. You can choose English or Arabic as your user interface language here.
Scroll down and start filling out the details in the specified spaces. Enter the loan amount as per your plan and move forward to the duration.
A maximum of 60-month-long repayment tenure is allowed for a RAKBANK car loan in UAE, with the minimum repayment tenure being of 12 months. Thus, you can choose any number of months from 12 to 60.
Enter a tentative payment as well. This will help the RAKBANK car loan calculator in preparing a complete payment schedule for your loan repayment.
Note: It should be kept in mind that the RAKBANK car loan calculator uses the reducing rate formula for interest and EMI calculation. The minimum available reducing car loan interest rate for the RAKBANK car loan calculator is 2%.
Information about interest rates and the available tenure for each type of loan is given at the bottom of the same page.
Choose personal or business for the segment column next as per the applicability.
Select how you would like to make payments, i.e., monthly, quarterly, yearly, or half-yearly.
Finally, enter the length of the promo period or the grace period you will like before the due date for the first instalment payment. RAKBANK car loan calculator allows up to 180 days of promo period.
Once everything is in place, hit ‘calculate’. A complete schedule of loan repayment as per the estimated entries will be visible right below the calculator. The total interest to be paid over the complete loan tenure will be given on top of this repayment schedule.
Keep in mind that the RAKBANK car loan calculator only offers an estimate of your loan repayment schedule. All the particulars that you entered in the calculator are subject to change due to bank approvals, your monthly income, debt-to-income ratio, and other factors.
Factors That Influence RAKBANK Auto Loan EMI Amount
Interest Rate: The interest rate is the factor that influences your equal monthly payment amount the most, with this rate also fluctuating the most. Online EMI calculators like RAKBANK car loan EMI calculators use an average or the lowest available interest rate available with the bank to calculate the estimated monthly payment amount. The interest rate that you get for your RAKBANK car loan may change drastically as per your risk profile and debt-to-income ratio.
Loan Amount: The loan amount that you opt for will also increase or decrease the monthly payment that you will make for your car loan in UAE. Borrowers often end up adjusting their loan amount as per the approval received from the bank as well as the price of the vehicle. This means that if you do not receive approval from the bank for a higher loan amount due to your annual income or debt-to-income ratio, you may end up paying high interest to balance out the risk. This will result influence the monthly payment amount for the loan as well.
Down Payment: Most banks set a minimum required down payment percentage for their car and other kinds of loans. Borrowers are free to modify their down payment amount as they like beyond the minimum required point. Choosing a higher down payment amount will lead to lower monthly payment amounts while going for a lower amount will result in higher monthly payment amounts.
Loan Tenure: As discussed previously, the RAKBANK car loan EMI calculator allows the option to use up to 60 months as car loan repayment tenure (the minimum being 12 months). Borrowers can estimate their monthly payment amount as per the desired tenure. However, it is wise to leave some space to adjust the car loan repayment tenure. Approvals related to your loan tenure and the interest rate may require you to choose a longer tenure to pay off the amount comfortably if you had chosen shorter tenure initially.
How to Choose the Right RAKBANK Auto Loan EMI Amount?
Determine Your Eligibility: The first step that goes into deciding the right monthly payment amount for your RAKBANK car loan in UAE is to check the eligibility criteria of the loan and examine your current financial conditions in that regard. Banks mostly offer a maximum loan amount of 3 times your annual salary. Consequently, you should make sure that you don’t estimate the loan amount as more than 3 times your annual salary when calculating the estimated monthly payment amounts. It is also likely that you may get approved for a lower car loan amount as per your risk profile. Make sure you keep that possibility in your mind as well.
Create a New Budget: Now that you will be taking on an additional monthly expense, it will be beneficial to create a new monthly budget and check how much you can afford to spend on the monthly payment of your car loan. This is an excellent way to get an idea of your debt-to-income ratio. If you are left with high disposable income after deducting your essential monthly expenses like utility bills, grocery shopping, and others, your debt-to-income ratio will be lower. Such a favourable ratio can allow you to spend more on your monthly car loan payments or take a higher loan amount.
Choose a Suitable Loan Tenure: Opting for a short loan repayment tenure will lead to a higher monthly payment amount, hence more burden. However, while longer repayment tenure will allow you to pay off the loan more comfortably, it may lead to higher interest amount payments as well. You will be required to find a balanced position between these two situations.
Leave Room for Variations: Finally, you should leave enough room to accommodate variations. There is a high chance that your car loan plan will change once you get the final approval from the bank, with the magnitude of the change differing on a case-by-case basis. You can, thus, simply ensure that you have sufficient space to incorporate any substantial change as per the final loan plan approved by RAKBANK.
Why should I use RAKBANK car loan EMI calculator to estimate the monthly payment amount?
Estimating your monthly payment amount for the RAKBANK car loan can help you manage your finances beforehand and create a proper schedule to incorporate the new expenses into your monthly budget.
Can I repay my RAKBANK car loan in UAE earlier than decided?
Yes, the early settlement of your RAKBANK car loan in UAE is possible. However, a small early settlement fee will be applicable.
What details will be required to properly use the RAKBANK car loan calculator?
You will need your estimated loan tenure, loan amount, and the estimated profit rate to calculate the equal monthly payment of your RAKBANK account.
Will my loan tenure influence my RAKBANK car loan instalment amount?
Yes, your loan repayment tenure will impact the equal monthly payment amount. A longer loan repayment tenure leads to smaller monthly payment amounts, while a smaller one leads to larger monthly payment amounts.
What is the promo period in RAKBANK car loan calculator?
The promo period refers to the allowed grace period for payment of the first instalment of your car loan. RAKBANK allows up to 180 days of promo period.
What are the different payment frequencies available with RAKBANK car loan EMI calculator?
You can choose between monthly, quarterly, half-yearly, and annual payment frequency options when using this car loan EMI calculator.
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