What is Car finance calculator?

The demand for car loans has remained strong across the nation even though the automotive and allied industries have seen a general downturn in recent years. 

But it’s important for borrowers to be aware of their obligations when it comes to repayment before choosing a loan of this kind.

What would be your monthly instalment for your car loan, in brief?

Understanding how a car loan EMI calculator works is essential for coming up with the appropriate response.

Car Loan EMP calculator

Car financing Before you choose a loan, you can use an internet tool called an EMI calculator which can be used as  a car finance calculator to estimate your monthly instalment obligations

But first, you would need to enter the necessary information into this tool before you could start the calculations. The calculator needs the following three pieces of information from you:

  • Your desired borrowing amount (loan principal).
  • The duration of your payback period (loan tenure).
  • the annual percentage rate that your lender charges you for the amount you borrowed.
  • This EMI calculator will calculate your monthly payment for your auto loan based on the information you enter and show you how much you will owe over the duration of the loan.

Car loan EMI

When you obtain a loan from a bank or an NBFC, you are required to pay back the money in equal monthly instalments, or EMIs.

Auto loan The amount you must pay each month in relation to the loan you took out to buy your car is known as the EMI.

Remember that the main and interest portions of your vehicle loan EMIs will be split into two separate amounts. At first, the majority of your EMIs would be made up of interest.

The interest component is primarily paid off as you get closer to the end of the repayment period, while the principal grows. However, the precise EMI sum stays the same.

The formula must be learned and understood if you wish to manually calculate your vehicle loan EMIs rather than using a car EMI calculator.

The source of it is:

EMI is equal to [P x R x (1+R)N]



  • The loan’s principal amount is denoted by the letter P.
  • R is the annual percentage rate, expressed as a percentage of the loan amount, that your preferred lender charges.
  • N represents the loan term in months (For a 5-year tenure, N would be 60 months).

Factors influencing car financing 

  • Principal of an auto loan Your monthly payment directly relates to the amount of the loan you take out to buy a car. The EMIs for an Rs. 6 lakh loan for two years would be greater than those for an Rs. 4 lakh loan for the same time period. So, you have the option of taking out a smaller loan amount if you wish to considerably reduce your EMI load. In this instance, you could have to pay the remaining sum needed to buy the vehicle, nevertheless.
  • Interest rates on auto loans can change depending on the lender. A lower rate is frequently preferred regardless of your loan’s size and term because it means you’ll pay less in interest overall. Be aware that your eligibility and credit score, as well as other criteria, will affect the interest rate that your lender offers you.
  • Tenure of a Car Loan – The number of EMIs required to pay off a Car Loan is referred to as the Tenure. Longer repayment terms might lower your monthly loan obligations but raise your overall interest costs. Similarly, if you choose to pay off the loan sooner, your EMIs would be greater but the total cost of the loan will be less.


When it comes to financing the purchase of a car, both high-end and less expensive, these loans are the most practical solutions. The demand for car loans has remained strong across the nation in recent times. An EMI calculator which can be used as  a car loan calculator to estimate your monthly instalment obligations is very useful.