Car Loan Calculator
Loan Summary
Monthly EMI
₹16,801
Total Interest
₹2,08,089
Total Payment
₹10,08,089
Interest to Principal Ratio
26.0%
Payment Breakup
Other Loan Calculators
Car Loan EMI Calculation Formula
The Car Loan EMI calculator uses the following formula:
EMI = P × r × (1 + r)^n / ((1 + r)^n - 1)
Where:
- P = Principal Loan Amount
- r = Monthly Interest Rate (Annual Rate ÷ 12)
- n = Total Number of Months
Understanding Car Loan EMI
A car loan EMI consists of two parts: principal repayment and interest payment. The EMI remains constant throughout the loan tenure, but the proportion of principal and interest components varies with each payment.
Down Payment
Higher down payment reduces EMI burden
Interest Rate
Lower rate means lower total interest cost
Loan Tenure
Longer tenure reduces EMI but increases interest
How to Use This Calculator
- Enter the car value
- Input your planned down payment
- Enter the interest rate offered by your bank
- Select the loan tenure
- Click Calculate EMI to see your monthly installment
Factors Affecting Car Loan EMI
- Car value and loan amount
- Down payment percentage
- Interest rate offered by lender
- Loan tenure selected
- Processing fees and other charges
Frequently Asked Questions
What is the ideal down payment for a car loan?
Most lenders require a minimum down payment of 10-20% of the car value. A higher down payment reduces your loan amount and EMI burden, potentially leading to better loan terms.
What is the maximum car loan tenure available?
Car loan tenures typically range from 1 to 7 years. While longer tenures reduce EMI, they increase the total interest cost. Choose a tenure that balances affordable EMIs with total cost.
Can I prepay my car loan?
Yes, most banks allow prepayment of car loans. Some may charge prepayment penalties, typically 2-5% of the outstanding amount. Check with your lender for specific prepayment terms.
What documents are needed for a car loan?
Common requirements include identity proof, address proof, income documents (salary slips/ITR), bank statements, and car quotation. Additional documents may be required based on employment type and loan amount.
How is car loan interest calculated?
Car loan interest is typically calculated on a reducing balance basis. As you pay EMIs, the principal reduces, and subsequent interest is calculated on the remaining principal amount.