November 30, 2023
Looking to buy a car and want to calculate the EMI for your loan? Our easy step-by-step guide will help you understand how to do it in no time!

Looking for a calculator that can calculate your car loan EMI? This is pretty important, particularly when you have to work out the approximate/estimated EMI payable on your car loan. A vital step to take when you are thinking of applying for a car loan is to calculate car loan EMI online. This will give you a basic idea of what to expect in terms of your monthly repayment after the car loan starts. Nowadays, car loans are the best outlets for the salaried and professional classes to purchase cars of their choice. These are secured loans, i.e. the car or asset is what guarantees the loan and are easier to obtain in comparison to home or business loans.

Car loans involve a down payment portion, i.e. the amount which you will be paying from your own pocket while the rest of the car value is financed by the bank or financial institution. Some lenders also offer zero down payment loan options. The tenures for car loans are usually on the shorter side, i.e. between 3-5 years on an average although this can go up to 7 years as well. However, keep in mind that the longer your tenure, the more interest that you have to pay to the lender. At the same time, a shorter tenure will equate to a higher EMI amount which may be hard for you to afford. Hence, achieving a fine balance between the two factors is recommended before you buy your desired car.

# Learning how to calculate EMI on car loans

Thinking of how to calculate EMI on car loan? You can easily work out the EMI amount by using the below mentioned formula:

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

Here, P, R and N are variable factors. P is the principal amount of the loan given to you by the lender, on which the interest will be worked out and R is the rate of interest that is fixed by the bank/lender. At the same time, N equates to the number of years of the loan or the tenure of the loan. Since you pay your EMIs on a monthly basis, the tenure is worked out through the number of months in most cases.

Suppose you have applied for a car loan of Rs. 10 lakh. You can use the above-mentioned formula for calculation or simply use an online car loan EMI calculator instead. Calculate car loan EMIeasily for this amount for a tenure of 3 years or 36 months with a rate of interest of 12% (all approximations). Going by the calculation, your monthly EMI will stand at Rs. 33,214/- per month and the total interest that is payable will stand at Rs. 1,95,715/- The overall outgo for you, including the principal amount will be Rs. 11,95,715/-

## How to use the car loan EMI calculator

Using the car loan EMI calculator actually involves a really simple process. You have to use the sliders given for choosing the amount of the loan, the tenure of the loan in months and of course, the rate of interest at the lender in question. You can always re-calculate by changing these values anytime you wish.

The EMI will be instantly calculated once you move the given sliders or input the figures. You can easily calculate the car loan EMI in a matter of seconds or minutes. This will help you understand the monthly financial outgo before you finalize your vehicle purchase.

## Factors that may impact your car loan EMI

Before delving deeper into using the car loan EMI calculator, you should learn about the factors which may affect the car loan EMI in the first place. These include the following:

• Category of Applicant, i.e. whether you are salaried, self-employed, a professional (self-employed), into business or whether you are a man/woman borrower.
• Age Group as per lender criteria.
• Tenure of the car loan
• Specific car loan scheme that you are applying under
• Whether you are buying a used/new car
• Rate of interest as specified by the lender