Car Loan EMI Calculator

The demand for cars in India is constantly increasing. It is predicted that the Indian Automotive industry will see an 8.1% CAGR growth by 2031. So, if you too have been planning to buy a new car but are unsure because it is out of your budget, you need not worry. Now, you can buy your dream car on loan. A car loan EMI calculator becomes essential if you want to know the exact amount you need to pay over the loan repayment period. Read further to learn about the EMI calculator for car loans. 

Gone are the days when you had to rely on your savings to buy a car. It’s easy to buy a car now on loans offered by different financial institutions. You can quickly get a loan no matter which car you choose to buy. But, before you set out to take out a loan, you should use the EMI car loan calculator, an online tool to estimate the amount and interest you need to repay over the loan tenure. You can use both a new and used car loan EMI calculator depending on whether you are buying a new or old four-wheeler. 

EMI calculator for car loans uses the following formula:

EMI = [P x R x (1+R) ^N] / [(1+R) ^N – 1]

where P is the principal amount,

R is the rate of interest,

N is the loan tenure

Let us take an example to use this formula: 

Principal amount: Rs 10,00,000

Interest rate: 8%

Loan term: 7 years (84 months)

EMI, in this case, will be: [10,00,000 x 8% x (1+8%) ^ [(1+8%) ^ (84-1)] which is equal to Rs. 6,724.43 (approx.)

Amortisation schedule is a detailed table showing loan repayment schedule along with the interest amount and the remaining balance. It is very helpful as it shows a fixed schedule for paying off the loan on time.

Let us understand Amortisation schedule with an example where we have the following details:

Loan amount: Rs 10,00,000

Interest rate: 8%

Loan term: 7 years (84 months)

Here’s the amortisation schedule for the above data:

Car loans are offered by financial institutions at fixed and floating interest rates. As the name suggests, a Fixed Rate of Interest is when the rate of interest remains constant through the loan tenure. On the other hand, a floating rate of interest makes the interest change over the total tenure of the loan. Please note that the interest rate is not determined by the borrower but by the lender offering the car loan. Whether the rate of interest is fixed or floating, you can use a car loan EMI calculator to get the EMI details.