Car Loan EMI Calculator
Loan Amount
Tenure (Years)
Interest Rate (P.A)
Car EMI Calculator - An Online Tool to Calculate EMI
While there has been an overall slump in the automobile and related sectors in the last few years, car loans continue to be well in demand across the country. These loans make for the most convenient funding options when it comes to purchasing a car – both high-end and otherwise.
Nonetheless, before opting for such a loan, it is crucial for borrowers to understand their repayment liabilities for the same.
In short, how much EMI would you have to pay against your car loan?
To gather the answer to this question, it is vital to learn about the operations of a car loan EMI calculator. This hassle-free online tool can help you decide if a particular loan option is suitable for your finances, or whether the EMIs against it would be too much for you to bear.
So, without further ado, let us dive in to learn what a car loan calculator entails!
Table of Contents
-
What is Car Loan EMI Calculator?
-
Car Loan EMI Meaning
-
Formula to Calculate Car Loan EMI
-
Components of Car Loan and Car loan EMI
-
Benefits of Car Loan EMI Calculator
-
How Do Car EMI Calculator Helps in Planning and Purchase of a Car
-
Documents required to avail a Car Loan
-
Tax Benefits on Car Loan
-
Frequently Asked Questions

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?
Whenever you avail loans from banks or NBFCs, you are expected to repay the amount through equated monthly instalments or EMIs.
A car loan EMI is nothing but the monthly amount you need to pay against the sum you borrowed to purchase your vehicle.
Keep in mind that your car loan EMIs will have two components - the principal and the interest. Initially, your EMIs would primarily consist of the interest portion.
As you near the end of the repayment tenure, the interest component is mostly paid off, and the principal increases. Nevertheless, the exact EMI amount remains the same.
Formula to Calculate Car Loan EMI
If you prefer calculating your car loan EMIs manually instead of relying on a car EMI calculator, you need to learn and understand the formula for it.
It is given by:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
Where,
- P - represents the principal sum of your car loan.
- R - is the interest rate that your chosen lender charges on the loan amount, divided by 100.
- N - is the tenure of the loan in months (For a 5-year tenure, N would be 60 months).
To clarify this further, let us consider an example where one borrows Rs. 9 lakh at an interest rate of 13% for a tenure of 5 years.
In this example, P = Rs. 9,00,000; R = 13/100; N = 60
EMI = [900000 x 0.13 x (1+0.13)^60]/[(1+0.13)^60-1]
EMI = Rs. 20,478
As you can see, manual calculations can be hectic. Furthermore, these assessments leave room for errors, which can prove to be heavy for your pockets later on.
Therefore, using a car loan EMI calculator is the most convenient method for calculating the repayment amount.
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.
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:

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.
Read more
Read less
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 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.
Read more
Read less
Other Important Calculators Related to EMI