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Car or Vehicle Loan EMI Calculator!

Car Loan Calculator

Use VahanHistory's free car loan calculator to check your car payment before visiting the dealership. Find out if you can afford your dream car or how much of a monthly payment you can afford.

Any loan, whether for a house, a personal or vehicle purchase, is frequently described by terms like the principal, rate of interest, and tenure. When you take out a loan for whatever reason, you must pay it back in equal monthly instalments, or EMIs. An EMI is a set sum of money that you must consistently pay to your lender in order to pay back the loan. On a set date each month, this money is often disbursed through check or internet transfer.

How to calculate your monthly car loan EMI

To calculate the Equated Monthly Installment (EMI) for your car loan, you can use a simple mathematical formula or an online EMI calculator. The EMI is the fixed payment amount made by a borrower to a lender at a specified date each calendar month. Equated monthly installments are used to pay off both interest and principal each month so that over a specified number of years, the loan is paid off in full.

How to calculate your monthly car loan EMI

Formula to Calculate EMI

The formula to calculate the EMI on a car loan is: E M I = P × r × ( 1 + r ) n ( 1 + r ) n 1 EMI = \frac{P \times r \times (1+r)^n}{(1+r)^n-1}


  • P P is the principal amount (the original loan amount),
  • r r is the monthly interest rate (annual rate divided by 12),
  • n n is the number of months (loan term in years multiplied by 12).


Let's calculate a car loan EMI for the following:

  • Principal amount ( P P ) = ₹500,000
  • Annual interest rate = 10%
  • Loan term = 5 years

First, convert the annual interest rate to a monthly rate:

  • Monthly interest rate ( r r ) = 10% / 12 = 0.8333% = 0.008333 (as a decimal)

Then, calculate n n , the total number of payments:

  • n n = 5 years \times 12 months/year = 60 months

Plug the values into the EMI formula: E M I = 500 , 000 × 0.008333 × ( 1 + 0.008333 ) 60 ( 1 + 0.008333 ) 60 1 EMI = \frac{500,000 \times 0.008333 \times (1+0.008333)^{60}}{(1+0.008333)^{60}-1}

E M I 10 , 747 EMI ≈ ₹10,747

Alternatively, you can use an online car loan EMI calculator, which provides a quick and convenient way to calculate the EMI. Simply input the principal amount, interest rate, and loan tenure, and the calculator will compute the EMI for you. These calculators are available on financial services websites, bank websites, and as apps.

Car Loan Calculator Tools

Below is a glossary of our tool's car loan calculator terms. Please read them carefully to understand how each number factors into the whole.

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Purchase Price: The purchase price of a vehicle is the price you and the seller agree upon. It may be the sticker price, MSRP, or another price based on incentives, discounts, or inflation. The purchase price is the price you will pay to buy the car before any interest, taxes, or fees. The lower the purchase price, the lower your monthly payment will be, and you will pay less interest over time.

Down Payment: Typically, when you finance a new vehicle, the lender will require you to make a down payment in cash. This money will reduce the amount you finance and make your monthly payments lower. Generally, you should put down as much as you can and finance as little as possible. The higher your down payment, the less interest you will pay, and you may even qualify for lower interest rates.

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Loan Term (number of months): The loan term is the number of months you will have to make payments on your car before you pay it off. Typically, car loans last from 3 to 6 years. The longer the term, the more you will pay in interest. However, paying over a longer period will lower your monthly car payment.

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Interest Rate: The interest rate for your loan will be based on your current credit score, the loan amount, the loan terms, the down payment, and the lender's specific lending criteria. You will get a lower interest rate if you put down a large down payment, choose a shorter term, and have a great credit score. Often credit unions and local banks offer better interest rates for car loans.