Car Loan EMI Calculator
Calculate monthly EMI, total interest, and payment schedule
Loan Details
Payment Timing: End of Month (Standard)
Monthly EMI
₹20,758
Total Payment
₹12,45,501
Total Interest
₹2,45,501
Payment Progress
What is a Car Loan?
A car loan is a type of loan that helps you buy a new or used car without paying the full price upfront. Instead, the bank or lender pays for the car on your behalf, and you repay the amount in monthly installments (EMIs) over a fixed period, along with interest.
Why do people take car loans instead of paying cash upfront?
- Credit Score Building- Timely repayment of car loans can help you in improving your CIBIL score which helps in getting future loans at better interest rates
- Upgrade to better car-With a car loan people can buy a better car than what they would have bought with just savings.
- Liquidity Maintenance-Even if someone has the money, they may not want to spend it all at once and reduce their bank balance.
- Tax Benefits for Businesses – Self-employed individuals or businesses can claim tax benefits on interest and depreciation if the car is used for business purposes.
How Does a Car Loan Work?
Here’s the basic flow:
- Loan Amount (Principal) – This is the amount you borrow after paying any down payment.
- Interest Rate – The percentage charged for using the lender’s money.
- Loan Tenure – The time period to repay the loan, usually 1–7 years.
- EMI (Equated Monthly Instalment) – The fixed monthly payment towards principal and interest.
Formula for Car Loan EMI
EMI = P × r × (1 + r)n ÷ ((1 + r)n − 1)
Example
- Loan Amount = ₹10,00,000
- Interest Rate = 8% per annum (0.08/12 per month)
- Tenure = 60 months (5 years)
Calculated EMI: ₹20,278
| Month | Monthly EMI | Principal | Interest | Balance |
|---|---|---|---|---|
| 1 | 20,278 | 13,258 | 7,500 | 9,86,742 |
| 2 | 20,278 | 13,358 | 7,401 | 9,73,384 |
| 3 | 20,278 | 13,458 | 7,300 | 9,59,926 |
| … | ||||
| 59 | 20,278 | 20,450 | 308 | 20,604 |
| 60 | 20,278 | 20,604 | 155 | 0 |
Summary
EMI: ₹20,278
Total Payment: ₹20,278 × 60 = ₹12,16,680
Total Interest Paid: ₹2,16,680
At the start of the loan, the principal is high, so a bigger part of your EMI goes towards paying interest. As you keep paying EMIs, the loan balance comes down, so the interest reduces and a larger portion of your EMI goes towards the principal.
What is a Car Loan Calculator and How Does It Help?
A car loan calculator is a simple tool that helps you figure out your monthly EMI and total repayment for a car loan. You just need to enter:
- Loan amount (like ₹8,00,000)
- Loan tenure (like 5 years)
- Interest rate (like 9% per year)
In seconds, it shows you:
- Your monthly EMI amount
- Total interest you’ll pay over the loan period
- The total cost of the loan (principal + interest)
How to Use a Car Loan Calculator (Step-by-Step)
- Enter Loan Amount – Price of the car minus your down payment.
- Enter Interest Rate – Annual rate from your lender.
- Enter Loan Tenure – Usually between 1–7 years.
- Click Calculate – Get instant EMI, total interest, and total payment details.
