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Car Loan EMI Calculator

Loan Amount

Enter value between 50K and 1 Cr
50K 1 Crore

Tenure (Years)

Enter value between 1 and 7
1 7

Interest Rate (P.A)

Enter value between 1 and 20
%
1 20
Monthly EMI
17,761
Principal Amount
16,00,000
Interest Amount
₹ 9,57,568
Total Payment
₹25,57,568

Car EMI Calculator - An Online Tool to Calculate EMI

car loan emi calculator

What is a Car Loan EMI Calculator?

A car loan EMI calculator is an online tool that allows you to determine your monthly instalment liabilities from a loan before you actually opt for it.

Nonetheless, before getting on with the calculations, you would first need to enter relevant details to this tool. The three pieces of information that you must provide to the calculator are:

  • The amount you want to borrow (loan principal).
  • How long do you want your repayment period to last (loan tenure).
  • The rate of interest charged by your lender on the borrowed sum.

On providing these details, this EMI calculator will reveal the amount that you would have to pay against your car loan each month over the tenure.

Are you unsure about what car loan EMI represents? Read on to know more.

What is Car Loan EMI?

Formula to Calculate Car Loan EMI

Components of Car Loan and Car loan EMI

As discussed previously, your car loan EMIs depend on three main factors – principal, interest rate, and tenure.

Before starting with your loan EMI calculations, you should understand how each of these components affects the repayment amount.

Doing so can help you make an informed decision when you choose a lender.

car loan principal

Car Loan Principal

How much loan you avail for purchasing a car directly influences your EMI amount. If you avail Rs.6 lakh for 2 years, you EMIs would be higher than if you avail Rs.4 lakh for the same tenure. Thus, if you want to lower your EMI burden significantly, you can choose to avail a lower loan amount. However, in this case, you might need to cover the rest of the amount required to purchase the car.

Car Loan Interest Rate

Car Loan Interest Rate

Interest rates can vary between one lender and the next. Regardless of your loan amount and tenure, a lower rate is often preferable as it means that you would need to pay minimal interest on the amount borrowed. Keep in mind that the interest offered to you by your lender is based on several factors, including your eligibility and credit score.

car loan tenure

Car Loan Tenure

Tenure signifies the number of EMIs you will need to pay to clear your car loan dues. Longer repayment schedules can reduce your monthly liabilities for the loan, but increase the overall interest you bear on it. Likewise, if you decide to clear off the loan in a shorter span, your EMIs would be higher, but the overall cost of the loan would be contained.

Benefits of Car Loan EMI Calculator

The EMI calculator for car loans on our page can be a beneficial tool for several reasons. Few of these are:

1. Convenience

As demonstrated before, manual calculations for EMI can be quite complicated. More often than not, you might end up making mistakes while computing the result. The EMI calculator, on the other hand, is simpler to use, with a streamlined interface.

2. Accurate Results

Even minor errors can cost you greatly when dealing with such significant amounts. The risk of such mistakes is much higher when you try to compute your car loan EMIs manually, instead of using the calculator. Therefore, you should utilise the easier option and save yourself the added hassle.

3. Fast Calculations

Another drawback of manual car loan EMI calculations is that you would need to spend several minutes to reach the result. A car loan EMI calculator can compute the same results almost instantaneously after you enter the relevant details of your loan.

4. Amortisation Table

Amortisation schedule refers to the breakdown of your entire loan repayment into months, revealing the proportion of principal and interest component for each of the EMIs you pay. EMI calculators provide you with this table when you enter the information of your desired car loan.

how car loan emi help you

How Does Car EMI Calculator Help in Planning and Purchase of a Car?

Now that you understand why you need the calculator when assessing your EMIs from a car loan, it is time to gauge how the tool helps in making the right purchase.

  • Understand how much you can afford - You may have a particular car model in mind, with quite a high price tag. You can avail a loan for it without checking your repayment liability beforehand. However, once you complete the purchase, you might find that the instalments are simply too high for you to bear without overburdening your finances. Therefore, a car loan calculator can help you plan your budget. You can experiment with various loan principles before you reach the desired EMI threshold that does not disturb your financial stability. With a budget in mind, it becomes much simpler to choose the perfect car.
  • Helps you determine whether you can repay the Car Loan in shorter tenures - Access to a vehicle loan calculator should help you gauge how the repayment tenure of your loan influences your overall liability. At first glance, you may feel that repaying your dues within 2 years would be too difficult. However, once you use the calculator, you might realise that reducing the tenure of such loans from 4 years to 2 years does not increase the EMI amount as much as you initially thought.
  • Indispensable for comparing various Loan offers - If you are looking for the best loan terms in the market, comparing various options is a must. To do that, you would need to calculate your EMIs for each of your selected choices. A car loan EMI calculator is irreplaceable in this regard. It allows you to calculate your liabilities for each instance quickly, helping you understand the best option to finance your vehicle purchase.

Apart from deciding on these factors, you will also need to choose the type of EMI for your car loan.

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Documents required to Avail a Car Loan For Salaried Individuals

If you are a salaried professional, arrange the following documents before applying for a car loan:

Identity Proof

Address Proof

Income Proof

Signature Proof

Documents Required to Avail Car Loan For Self-Employed Individuals

If you own and operate your own business, you would need to furnish the following documents to avail a car loan –

Identity Proof

Address Proof

Proof of business ownership

Income Proof

Signature Proof

tax benefits of car loan

Tax Benefits on Car Loan

Most people are unaware that they can avail of income tax exemptions on their car loan payments in certain cases. The first thing that you should know is that salaried professionals are ineligible for these tax discounts.

Likewise, self-employed individuals who use the car for their personal use cannot claim the tax deductions as well.

To qualify for the income tax deductions on your car loan, remember the following factors:

  • Only self-employed borrowers who use the concerned card for legitimate commercial purposes can claim this deduction.
  • The car, in such a case, must be registered to your company if you operate a proprietary firm.
  • An IT assessment officer will verify whether the car in question has been used solely for commercial purposes. If the findings do not match your claim, he/she has the power to cancel all car loan-related tax benefits.

If you comply with such provisions, you can claim the interest portion on your car loan in a year as a business expense. You do not have to bear any taxes on this interest amount, but only on the principal repayment amount for the year.

For example, if you repaid Rs. 5 lakh in a year, out of which Rs. 15000 went toward the loan’s interest, while the remaining was a principal payment.

Therefore, under this provision of tax deduction, your taxable income would be Rs. 4.85 lakh after deducting the interest sum.

The only reason that salaried individuals cannot claim this deduction is that in India, cars are considered a luxury item and not a necessity.

These are a few of the most pertinent information that you must be aware of before availing a car loan.

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FAQs about Car Loan EMI Calculator