How it works
The EMI — equated monthly instalment — is the fixed payment that clears a car loan exactly at the end of its term: EMI = P × i × (1+i)n ÷ ((1+i)n − 1), where P is the amount borrowed, i the monthly rate (annual rate ÷ 12 ÷ 100) and n the number of months.
- Enter the loan amount, the annual interest rate and the term in years.
- The calculator converts the rate to a monthly one and the term to months.
- It returns the instalment, the total interest and a month-by-month schedule.
Each instalment is the same size, but its make-up changes: early on most of it is interest, and by the end almost all of it is principal. That is why prepaying early saves far more than prepaying later — and why the schedule below the calculator is worth reading.
Car loans are usually 3–7 years. A longer term lowers the EMI but the car depreciates faster than the loan shrinks, which is how people end up owing more than the car is worth.
Examples
Worked examples:
- ₹8,00,000 at 9% for 5 years: EMI ₹16,607, total repaid ₹9,96,401, of which ₹1,96,401 is interest.
- Two years shorter: EMI rises to ₹25,440, but total interest falls to ₹1,15,832 — a saving of ₹80,569.
- One point cheaper (8.0%): EMI ₹16,221, saving ₹4,627 a year.
Lenders also check affordability: most cap all your EMIs together at 40–50% of take-home pay.
Related: Grade Calculator, ROI Calculator, Mortgage Calculator.
Car Loan EMI Calculator: frequently asked questions
- What is a typical car loan tenure?
- Usually 3 to 7 years. Shorter tenures mean higher EMIs but much less interest.
- How much down payment should I make on a car?
- Many lenders fund up to 80–90% of the on-road price; paying 20% or more reduces the EMI and total interest.
- Is a car loan interest rate fixed?
- Most car loans in India are fixed-rate for the whole tenure, unlike many home loans.