How car loan EMI is calculated
Your car loan EMI is calculated from the amount borrowed, annual interest rate and repayment tenure. Each instalment includes interest on the outstanding balance and repayment of principal.
The formula is EMI = P × r × (1+r)n / ((1+r)n − 1), where P is the loan principal, r is the monthly interest rate and n is the number of monthly instalments.
Car loan example
Adjust the vehicle loan amount, interest rate and tenure above to estimate your EMI. Your lender's final offer may vary with your credit profile, down payment, vehicle and fees.
Ways to manage car loan costs
- Make a larger down payment to reduce the amount borrowed.
- Compare interest rates and processing charges across lenders.
- Choose a tenure that balances affordable EMI with total interest.
- Use extra principal prepayments when permitted by your loan terms.
Frequently asked questions
Does this include the vehicle down payment?
No. Enter the amount you plan to borrow after accounting for your down payment.
Can prepayment reduce total interest?
Yes. In this calculator, extra payments reduce principal while the regular EMI stays unchanged, which can shorten the tenure and reduce interest.
Are processing fees included?
No. This estimate covers principal and interest only. Check your lender's terms for fees, insurance and any prepayment charges.