Car Loan EMI Calculator in India: Everything You Need to Know

As the name suggests, a car loan is a loan taken to buy the car of dreams. The borrower may want to buy an affordable or luxury car, and the loan will cover the cost. There is no restriction on buying a new car, the loan for a used car too. The loan is to be paid back to the lender, a bank or NBFC, with the accrued interest over a pre-decided tenor. You can use a car loan EMI calculator, a tool provided by many lenders to make it easy for borrowers to know the EMI in advance.

Self-employed and salaried individuals, partnerships, private limited and limited firms, as well as HUFs and Trusts, can avail a car loan.

Car Loan EMI Calculator

A car loan calculator is a tool provided by lenders to make it easy for borrowers to know the equated monthly installment or EMI. The EMI is the amount that helps to pay back the principal amount and the interest accrued every month. The EMI is to be paid throughout the entire tenor or the time for which the loan is has been given by the lender to the borrower.

Since the online car loan calculator takes into account both your eligibility and requirement, it is an excellent tool to help you make an informed decision. The type of car you want to buy will have an impact on your EMIs.

Different Types of Car Loans

Since the demand of the cars has gone up many folds in the past years, several banks and lenders have come forward to offer easy and convenient Car Loans to enable the purchase of both new and old cars.

  1. Loan for a New Car – When a borrower is interested in buying a new car directly from the car dealership or showroom, they can approach a lender to make the payment on their behalf. Many car sellers have ties with lending institutions with the aim of making it easier for their customers to get a loan.
  2. Loan for a Used Car – You may be interested in buying a pre-owned car from a family member or sellers specializing in them. Most lenders have a restriction on the vintage of the car, it should not be older than ten years. Remember, in many cities of India; you cannot use cars which are more than 15 years old. Take advantage of a used car loan EMI calculator to help you know if the car is worth buying.
  3. Loan Against a Car – If you already own a car and are in need of funds, you can put your vehicle up as collateral and take a loan. The loan is to be paid back in installments. In the rare chance, you are unable to pay off the loan, lenders have the right to repossess your asset and sell it to get their dues.

Differentiating Factors Between the Three Loan Types

The table below shows the primary factors differentiating the loans you need to take into account while using the EMI calculator for a car loan in India

New Car LoanUsed Car LoanLoan Against a Car
Type of careHas to be brand newPreowned or used carCar owned by you
Loan amountFull amount80-85% of the vehicle’s costThe current market value of the car
Interest rate9-14%12-18%14-20%
Tenor1-7 years1-5 years1-3 years

The above are the major factors affecting your monthly installment, but remember, the terms are just an indication and will vary across lenders. It is better to first calculate the EMI to be paid and for that knowing the formula used to calculate the EMI is important.

Formulas Used to Calculate Car Loan EMI

The formulas used to calculate the car loan EMI are given below

Excel Sheets

Here is the formula for calculating your monthly repayment amount with the help of an Excel workbook or sheet:

-P is the monthly or quarterly rate of interest or r
-M is the number of periods or nper, again in months
-T is the present value of the loan or the pv

Manual Calculation with Mathematical Formula

Borrowers not comfortable using the excel can use the mathematical calculation.

E = P x R x (1+R)^n / {(1+R)^n – 1}

-‘E’ is the equated monthly installment the borrower is supposed to make to the lender
-‘P’ is the principal amount or the amount taken by the lender as a loan
-‘R’ is the rate of interest or the charges
-‘n’ is the monthly car loan tenor

Online EMI Calculator

Using a ‘car loan calculator India’ is easy as the tools are intuitive. The tool is such that it handholds you to fill in the details in the required fields. A click on ‘Calculate’ after providing all the details give an accurate EMI. The borrower may choose to vary the input fields to know the amount and tenor to calculate the EMI they are comfortable to repay every month.

Factors Affecting Your Car Loan EMI

You have to choose a loan amount and EMI that put a financial strain on your daily expenditures. Hence, it is important to know the various factors affecting your car loans EMI.

  1. Principal Amount – The amount of money you need to buy a car or finance your need is the principal amount. A higher loan amount means a higher EMI.
  2. Rate of Interest – The interest charged by the lender for giving you the loan – it varies from lender to lender. A higher interest means a higher EMI. You can choose between a fixed rate of interest wherein the interest chargeable does not change or reducing balance wherein the interest is calculated on the principal amount to be paid. It is easier to use a car loan interest rate calculator to know the interest you will pay for the tenor.
  3. Tenor – The time or number of years within which you have to pay back both the principal amount and the interest accrued. A longer tenor means a lower EMI.
  4. Creditworthiness – Most lenders will take into account your credit score to decide if a loan can be sanctioned and the interest rate to be charged. Higher credit score makes it easier to avail the loan at a lower rate of interest. A car loan eligibility calculator can be used to know if you are eligible to avail the loan.

Take into account your down-payment capacity, processing fees and the lender’s pre-closure terms and charges. Though they may not have a direct impact on your EMI, they are expenses you will incur and you can use a car loan calculator with down payment and pre-closure. The EMI calculator gives you the amount you need to pay while the rest affect the overall cost of the loan.

Advantages of Using an Online Calculator

There are many advantages of using an online EMI calculator to calculate your car loan instead of using the excel sheet of doing the calculations manually. You get accurate results with minimum time consumption. The key benefits are as follows:

  1. It is Easy and Accurate: Using the excel sheet requires expertise in the software while manual calculations require you to understand the formula. On the other hand, using the online calculator is as simple as inputting the information asked. The formula used is accurate, giving you the information you require to make an informed decision.
  2. It Saves Time: As has been mentioned above, the calculator helps to calculate the EMI in a matter of seconds. Once you have inputted the details, and click on calculate, within seconds you will have the EMI amount. It is the fastest way to calculate the EMI.
  3. Judge your Repayment Capacity: You can change the principal amount or the tenor to know how much you need to repay. If the amount showing is not comfortable, change the details entered until you have a loan amount, and tenor till you have an amount you are comfortable paying monthly.

Keep in mind; the final calculation should be made the customer representative of the lender. The rate of interest is never the same for people with a similar profile, and your eligibility, credit score, etc. will also impact the final EMI. For example, if you use the Maruti Swift car loan EMI calculator, your eligibility and EMI will vary with the amount calculated by any other online calculator.

Lowest Car Loan EMIs from Top Banks 2018

Here is a table showing the interest rates charged by various banks and NBFCs in India.

Bank NameInterest Rate (New Car)
Andhra Bank1-year MCLR + 0.70%
Axis Bank10.75% to 11.25% for tenures up to three years, and 8.50% to 10.25% for tenures over three years
Bank of Maharashtra1-year MCLR + 0.25%
Central Bank of India1-year MCLR + 0.40%
Corporation Bank9.30% for cars priced under Rs.50 lakh, 9.80% for cars priced above Rs.50 lakh, 8.65% for defense personnel and government employees for vehicles priced under Rs.50 lakh, and 11.00% for vehicles used for commercial purposes
Federal Bank1-year MCLR + 0.25% to 1-year MCLR + 0.55% (floating)
HDFC Bank9% to 10.25% (based on the vehicle’s make and model)
ICICI Bank7.75% to 17.56%
IDBI Bank9.00% for existing customers (minimum of three months), and 9.10% for new customers
IndusInd Bank12.00% to 28.00% for small commercial vehicles, 10.65% to 15.50% for passenger vehicles, 10.65% to 16.00% for light commercial vehicles, 10.60% to 15.00% for medium and heavy commercial vehicles, 10.60% to 16.00% for Jeeps and MUVs, and 13.70% to 23.50% for tractors
OBCBase Rate + 0.50% = 10.20% for tenure up to three years, and Base Rate + 0.75% = 10.45% for tenures up to seven years.
State Bank of India8.90% to 9.40%
Punjab National Bank1-year MCLR + 0.60% to 1-year MCLR + 1.05% (floating), and 1-year MCLR + 0.95% (fixed)
Tamilnad Mercantile Bank8.95% to 10.95%
Union Bank of India1-year MCLR + 0.50% = 8.70%
United Bank of India1-year MCLR + 0.30% = 8.90% for male applicants, and 1-year MCLR + 0.25% = 8.85% for female applicants


1. What is a car loan EMI calculator?

A car loan EMI calculator is an automated calendar where the borrower inputs certain information to know the EMI payable.

2. Who can use the EMI calculator?

Any person looking for a car loan can use an EMI calculator.

3. What affects the Car loan EMI?

The loan amount, tenor and rate of interest are the three major factors affecting EMI of the car loan. Additionally, some car loan calculators take into account the processing fees.

4. Do I get the full amount of the cost of the car as a car loan?

Mostly, the amount of car loan available to a borrower is usually 70-80% of the value of the vehicle, though for some new cars you can get the full amount. The remaining cost has to be made by the borrower at the time of purchase and is known as the down payment.

5. What if I miss an EMI?

If you miss an EMI, the lending institutions will charge late fees on the missed installment. This will be over the repayment amount calculated by your car loan interest calculator. If you miss more than the stipulated EMIs as per contract terms, your vehicle will become the property of the bank and its employees.


1. Principal Amount – The total amount of money a borrower borrows from a bank to purchase a vehicle.

2. Interest Rate – The interest the lending institutions charge on the principal amount.

3. Tenure – The duration for which the car loan is taken – usually 1-5 years.

4. EMI – The equated monthly installment calculated by taking into account the principal amount, interest rate and tenure.

5. Online car loan Calculator – A tool which anyone can use to calculate the EMI payable by the borrower.

6. Security – The asset, in a car loan, the car for which loan is taken, which becomes the property of the bank if an EMI is missed.