Car Loan EMI Calculator
A car loan EMI calculator helps you estimate the fixed monthly payment required to repay a vehicle loan over a chosen tenure. This monthly payment, called an EMI (Equated Monthly Instalment), includes both interest and principal repayment.
Along with the monthly EMI, the calculator also shows the total interest payable over the loan period and the total amount you will repay. This helps you judge not just affordability, but also the true cost of financing a car purchase.
How the Calculation Works
Car loan EMIs are calculated using a standard amortization formula. The annual interest rate is converted into a monthly rate, and the EMI is computed such that the loan is fully repaid through equal monthly payments over the selected tenure.
Although the EMI amount stays the same every month, its composition changes. In the early months, a larger portion of the EMI goes towards interest. As the outstanding balance reduces, the principal component gradually increases.
- Interest is calculated on the outstanding loan balance
- EMI amount remains fixed throughout the tenure
- Principal repayment accelerates in later months
- Tenure is internally handled in months
Inputs and Options Explained
The calculator uses three essential inputs that define a standard car loan structure.
- Car Loan Amount — The principal amount borrowed to purchase the vehicle.
- Annual Interest Rate (%) — The nominal yearly rate charged by the lender, converted to a monthly rate for EMI calculation.
- Loan Tenure — The repayment duration. You can enter this in years or months, both representing the same total period internally.
Examples and Edge Cases
Car loans typically have shorter tenures compared to home loans, which means a higher proportion of each EMI goes towards principal repayment earlier in the schedule. This leads to faster reduction in outstanding balance.
The EMI shown is rounded to the nearest rupee for clarity. However, the total repayment and total interest are calculated using the exact EMI internally. This avoids small rounding differences from compounding over many months.
Who Should Use This Tool
This calculator is useful for anyone planning or reviewing a car loan under standard EMI-based repayment.
- Car buyers planning monthly affordability
- Borrowers comparing loan tenure options
- Anyone estimating total loan cost before purchase
Related Concepts
Car loan EMIs follow the same underlying structure as other installment-based loans.
- Amortization — The structured repayment of a loan through scheduled EMIs.
- Principal — The original loan amount borrowed.
- Interest — The cost of borrowing charged by the lender.
To compare other loan types, you can also use a Home Loan EMI Calculator or the more general EMI Calculator.