Car Loan EMI Calculator
If you are thinking of buying your dream car, the car loan EMI calculator can help you in estimating the monthly installments on your car loan.
Are you tired of waiting in bus/train lines? Buying a car can help you avoid such situations, giving you the freedom to reach your destination comfortably. But it also means worrying about affordability or saving for years!
Not any more. Use our car loan installment calculator to know your EMI (equated monthly installment) in advance and plan your budget accordingly. You could also consider leasing a car instead of buying.
Continue reading to know:
 What is a car loan?
 How to calculate EMI on your car loan?
 What is the prevailing car loan interest rate?
 How to apply for a car loan?
You may also be interested in checking the bike loan EMI if you're looking to buy a 2wheeler instead of a car. If you are about to suspend your EMI payment, check our moratorium calculator, where you can check the effect of a moratorium on your repayment. Or you may check our lumpsum calculator if you are more interested in investment.
What is a car loan?
A car loan or auto loan is a sum of money that you borrow from a bank or other lending institution to buy a car. So, instead of paying the whole amount up front to the seller, you pay fixed monthly installments to the lending institution that makes full payment to the dealer on your behalf.
It is a secured loan, which means you mortgage your car as collateral until you repay the loan amount and interest.
How to calculate car loan EMI?
To calculate the EMI on your car loan, we will use the formula:
EMI = P * R * [(1 + R)^{N} / {(1 + R)^{N}  1}]
where:

P
— Loan amount given to you by the bank; 
R
— Rate of interest set by the bank (calculated every month); and 
N
— Loan tenure/duration in months.
For example, suppose you want to buy a Tata Nexon car for an onroad price of about Rs. 8 lakh
. If the bank is ready to finance 100%
of the onroad price at an annual interest rate of 8.0%
for a tenure of 60 months
, you can calculate the EMI as following:

Calculate the monthly interest rate:
R = 8 / (12 * 100) = 0.00666

Now calculate your EMI on
Rs. 8 lakh
car loan:EMI = Rs. 8,00,000 * 0.00666 * [(1 + 0.00666)^{60} / {(1 + 0.00666)^{60}  1}]\
EMI = Rs. 16,218

Over the entire loan duration, i.e.,
60 months
, you will make a total payment of:60 * 16,218 = Rs. 9,73,200
How to use the car loan EMI calculator?
Now let us see how you can calculate the EMI on Rs. 8 lakh
car loan using the car loan EMI calculator:
Car loan inputs

Enter the loan amount (
Rs. 8,00,000
) and loan tenure (60 months
). 
Type in the annual interest rate set by the lending institution (
8.0%
). 
Input the processing fee charged by the bank (
Rs. 1500
).
Payment summary

The car loan EMI calculator will give you an estimate of your monthly installments (
₹ 16,221
), total interest payable (₹ 1,73,267
), and total payment (₹ 9,74,767
) made during the entire loan duration. 
It will also show the annual percentage rate (APR) (
8.08%
). While calculating APR, the processing fee charged by the bank is also taken into account. Hence, you can use it to compare the car loan options offered by different banks. 
You will also find a detailed account of your periodic principal and interest payments, as well as the outstanding amount at any point in time by using the amortization schedule and a chart of balances.
Car loan interest rates
The interest rates for car loans vary from one lending institution to another. In general, the interest rates start from about 7.0% and can go up to about 15.0%. You can also choose between floating and fixed rates of interest.
Most lending institutions also charge a onetime processing fee varying between 0.2% to 0.5% of the loan amount. Therefore, it is always advisable to compare the APR for various banks before applying for a car loan.
How to get a car loan?  Applying for a car loan
To apply for a car loan, you need to approach a bank or lending institution with the following documents:
 Filled application form with photograph;
 Identity and residence proofs;
 A copy of the invoice for the car;
 Bank account statement for the last six months; and
 Latest salary slip and income tax returns for the last two years.
You may need to furnish more documents if you are selfemployed.
The bank will assess your loan repayment capability based on your CIBIL score and the documents mentioned above. Once the loan is sanctioned, the loan amount is disbursed to the car dealer from whom you are buying the car.
Things to consider before applying for a car loan
Before applying for a car loan, you should shop around to get the best interest rates on your car loan. We also recommend using our car loan installment calculator to decide if you can afford to pay the installments.
In addition, you should also consider the following points:

Partpayment or foreclosure charges: Most banks allow you to make partpayment or full payment of the loan amount before the complete tenure. However, there may be a foreclosure charge. Therefore, you should always check the prepayment clause before applying for a loan.

Processing fee and other nonrefundable charges: In addition to the interest rates, you should also check the processing fee and any additional nonrefundable charges as these will increase the cost of your loan.

Loan disbursal period: Make sure you check how long it will take for the bank to disburse the loan amount to the dealer once the loan is sanctioned.
Car loan EMI calculator disclaimer
You should consider the present car loan EMI calculator as a model for financial approximation. All payment figures, balances, and interest figures are estimates based on the data you provided in the specifications that are not exhaustive despite our best effort.
We have created the calculator for instructional purposes only. Still, if you experience a relevant drawback or encounter any inaccuracy, we are always pleased to receive helpful feedback and advice.
FAQ
How can I reduce my car loan EMI?
To reduce your car loan EMI, you can adopt one or a combination of the following ways:

Longer tenure: If you opt for a longer loan tenure, your monthly installments will reduce.

Larger down payment: Try to make a larger down payment on your car. This will reduce the loan amount and subsequently your EMI.

Prepayment: Whenever possible, try to prepay your loan, as this will help in reducing the principal amount.

Balance transfer: You can also transfer your loan from one bank to another and negotiate competitive rates.
How much down payment should I put down on a car?
It is usually advisable to make a 20% down payment. Most banks finance only 8090% of the onroad price of the car.
Can I pay more than the EMI for a car loan?
Yes, you can pay more than the EMI for a car loan. This additional payment will go towards reducing your principal amount and hence will lower your EMI.
Can I pay my car loan early?
Yes, you can pay your car loan early. However, you should check with your lender for any loan foreclosure penalty before doing so.
What is the minimum CIBIL score for car loan?
For most banks, the minimum CIBIL score for car loan approval is 750.
Christmas tree
ROA
Sunbathing
Working capital
Equated Monthly Installment (EMI)  ₹ 16,221 
Annual Percentage Rate (APR)  8.08% 
Loan term  5 years 
Loan principal  ₹ 8,00,000 
Total interest payable  ₹ 1,73,267 
Loan fees  ₹ 1,500 
Total payments  ₹ 9,74,767 