Car Loan Calculator

EMI (Equated Monthly Installment) is the fixed amount you pay to the lender each month until your car loan is fully repaid. Each EMI payment includes a portion of the principal amount and the interest calculated on the outstanding loan balance.

The car loan EMI is calculated using the formula:

EMI = [P × r × (1 + r)^n] ÷ [(1 + r)^n - 1]

Where:

• P = Principal loan amount (Car price - Down payment)
• r = Monthly interest rate (Annual interest rate ÷ 12 ÷ 100)
• n = Loan tenure in months

Several factors affect your car loan EMI:

• Loan amount: Higher loan amounts result in higher EMIs
• Interest rate: Higher interest rates increase the EMI amount
• Loan tenure: Longer tenure reduces EMI but increases total interest paid
• Down payment: Larger down payments reduce the loan amount and consequently the EMI

A good down payment is typically 20% of the car's price. Higher down payments (20% or more) can help you:

• Reduce your loan amount and monthly EMI
• Get better interest rates from lenders
• Reduce the impact of depreciation
• Improve chances of loan approval

However, the ideal down payment depends on your financial situation and goals.

Loan tenure significantly affects your car loan:

• Shorter tenure: Higher EMIs but lower total interest paid
• Longer tenure: Lower EMIs but higher total interest paid

For example, a 3-year loan will have higher monthly payments than a 7-year loan for the same amount, but you'll pay less in interest over the life of the loan.