Car Loan EMI Calculator India
Buying a new or used car often involves taking a vehicle loan. Before choosing a loan, it is useful to know how much you will have to pay every month and how much interest you will pay over the entire repayment period.
The OneIndia Car Loan EMI Calculator helps you estimate your monthly Equated Monthly Instalment (EMI) based on the car price, down payment, loan amount, interest rate and loan tenure.
How to use the Car Loan EMI Calculator
Enter the approximate price of the car, your planned down payment, annual interest rate and loan tenure. The calculator automatically calculates the estimated loan amount and monthly EMI.
- Enter the car price.
- Enter the down payment you plan to make.
- Enter the car loan interest rate.
- Select the repayment tenure.
- Check your monthly EMI.
- Compare total interest and total repayment.
Car Loan EMI Formula
Car loans are generally calculated using the reducing-balance EMI method. The standard formula is:
Where:
- P = principal or loan amount
- r = monthly interest rate
- n = total number of monthly instalments
The annual interest rate is converted into a monthly rate before calculating the EMI.
Example of a Car Loan EMI
Suppose you purchase a car for ₹15 lakh and make a down payment of ₹3 lakh. Your loan amount would be approximately ₹12 lakh. If the interest rate is 9% per year and the repayment period is 5 years, the calculator can estimate your monthly EMI and total interest.
Your actual EMI may differ depending on the lender's interest rate, processing charges, insurance financing, loan structure and other applicable charges.
Does a higher down payment reduce car loan EMI?
Yes. A larger down payment means you need to borrow less money. A smaller principal generally results in both a lower EMI and lower total interest.
For example, if a car costs ₹15 lakh, paying ₹5 lakh upfront means you only need to finance approximately ₹10 lakh instead of ₹12 lakh if your down payment were ₹3 lakh.
How does the car loan interest rate affect EMI?
The interest rate has a direct impact on the cost of borrowing. If two lenders offer the same loan amount and tenure but different interest rates, the loan with the higher rate will generally have a higher EMI and higher total interest cost.
How does loan tenure affect car loan EMI?
Increasing the tenure spreads repayment over a larger number of months. This generally reduces the monthly EMI, but it also means you may pay more interest over the complete loan period.
A shorter tenure can result in a higher monthly EMI but may reduce the overall interest cost.
New car loan vs used car loan
Car loans are available for both new and used vehicles, but the terms can differ. Used-car loans may have different interest rates, maximum loan amounts and repayment periods depending on the lender, vehicle age and borrower profile.
If you are comparing a used car with a new car, calculate the complete cost of ownership rather than looking only at the EMI. Insurance, maintenance, fuel, taxes and registration costs can also affect your overall budget.
Car loan EMI and affordability
A car loan EMI should fit comfortably within your monthly budget. Consider your existing loans, household expenses, insurance, fuel and maintenance costs before deciding how much to borrow.
The lowest possible EMI is not always the cheapest loan. A longer tenure may reduce the monthly payment while increasing the total interest paid.
Yearly Car Loan Amortization Schedule
The table below provides an estimated year-by-year breakdown of principal repayment, interest paid, total yearly payments and remaining loan balance.
| Year | Principal Paid | Interest Paid | Yearly Payment | Outstanding Balance |
|---|