Personal Loan

Know How to Calculate Car or Vehicle Loans with EMI Calculator


While the automotive and allied sectors have seen a general slump recently, vehicle loans remain in high demand nationwide. These loans are easy-to-finance solutions when acquiring a car, both high-end or otherwise. Yet, debtors need to know their repayment duty before taking out such a loan.

In a nutshell, how much EMI would you need to pay on your auto loan?

To get the response to this question, you must first know how a vehicle loan EMI tool works. This simple online tool may help you determine if a certain loan choice is appropriate for your finances or if the EMIs linked with it are too high for you to endure. So, let us begin learning about vehicle loan EMI calculators without further ado!

What Is an EMI on a Car Loan?

In today’s fast-paced world, owning a car is almost a need. You have the choice of buying a new or used car. Your budget is useful for assessing the car, the down payment you can afford, and the required loan amount. You can repay the loan in cost-effective EMIs over a set amount of time. If you default on the loan, your credit rating will suffer, and the lender may seize the vehicle to compensate for the loss. Banks provide car loans with low-interest rates and terms that do not require you to stretch the budget. The EMI for a car loan comprises the loan’s principal and interest. The EMI would be fixed all through the loan and could be repaid in monthly instalments.

What Exactly Is a Vehicle Loan EMI Calculator?

If you buy a car on credit, you must pay EMI regularly to repay the loan over a set number of years or months. A vehicle loan EMI calculator is the most commonly used tool to figure out how much EMI you must pay each month. It requires information such as the loan amount, interest rate, and loan duration. Internally, it uses this data to calculate the EMI in a short amount of time.

Aside from the EMI sum, a vehicle loan EMI calculator will also break down the principal and interest amount due, showing the overall cost of the borrowing. Most calculators also display the results of these computations graphically. A car loan eligibility calculator may also examine the amount of your loan eligibility.

Perks of Using the Vehicle Loan EMI Calculator

  • Budgeting Is Feasible

Plan your budget properly once you know the EMI that needs to be paid. Consider a longer repayment period if the loan amount is large. The vehicle loan EMI calculator may help you figure out these data.

  • Accuracy

The results that are shown are correct for the details that are entered into the calculator. Manual studies may provide inaccurate results.

  • Time-Saving

The vehicle loan EMI calculator‘s primary goal is to save time. After entering the needed details, the results are presented relatively instantly.

  • There is No Limit

The tool can be used an unlimited number of times. As a result, you utilise the calculator with several options. This might help you determine the best lender and the required down payment.

  • Compare

You may compare the EMIs for various numbers since there is no limit to the number of times the calculator can be used.

How Does the Vehicle Loan EMI Calculator Function?

The following mathematical method may be used to compute the Car Loan EMI Amount:

The EMI amount is calculated as  [P x R x (1+R)^N]/[(1+R)^N-1] , where P, R, & N are variables.

This also implies that the EMI value would vary if any of the three factors is changed. Let’s go through these three factors in depth.

  • The letter ‘P’ stands for the principal amount. Your interest will be computed on the initial loan amount supplied to you by the bank.
  • The letter ‘R’ stands for the bank’s interest rate.
  • N refers to the number of years specified for loan payback. Since you must pay the EMIs monthly, the length is shown in months.

So, if you borrow Rs 10 lakh at 12% interest, the estimated EMI is R = 12/100/12, P = Rs 10,00,000, N = 2 years or 24 months. EMI = [10,00,000 x 12/100/12 x (1+12/100/12)^24] / [(1+12/100/12)^24-1], EMI = Rs 47,073.

How Can the Vehicle Loan EMI Calculator Aid while Planning & Buying a Vehicle?

  • Decide how much you can afford

You may have a certain car model in mind that is rather costly. You may get a loan for it without first deciding your payback burden. Yet, after you’ve made the purchase, you may discover that the payments are too expensive to take without straining your budget. As a result, a vehicle loan EMI calculator may assist you in planning. You may try various loan principles until you find the optimal EMI level that does not risk your financial security. With a goal in mind, selecting the ideal vehicle becomes much easier.

  • Assists you in assessing repayment time

Access to a car loan tool should help you figure out how the payback term of your loan affects your overall liability. At first look, you may believe that repaying your debts within two years is too hard. Yet, after using the calculator, you may discover that changing the period of such loans from four years to two years does not significantly raise the EMI amount.

  • For comparing different loan offers

You must compare your options if you want the best loan rates on the market. To do so, you’d need to figure out your EMIs for each option. In this sense, a vehicle loan EMI calculator is useful. It enables you to rapidly assess your costs for each instance, assisting you in figuring out how to finance your car purchase.

Aside from these factors, you must also choose the form of EMI for your auto loan.

How Does the Vehicle Loan EMI Calculator Work?

The vehicle loan EMI calculator is useful for calculating the monthly amount owed to the lender (bank). You should follow these steps to get the EMIs for your loan amount:

  • You need to enter the loan amount.
  • You then enter the loan tenure in months.
  • After that, you need to enter the rate.
  • The calculator will display the EMI, total interest, and payment amount.
  • You may recalculate your EMI by modifying the input data at any time. 
  • EMI for the loan will be calculated immediately when you enter all the details.


Buying a vehicle is a major life event. And now, owning a car is no longer a luxury but a cheap luxury, thanks to appealing auto loan options. Note that paying in cash ahead may place you on the radar of the Income-tax Department, notably after demonetisation. 

An EMI is a monthly payment to a bank or another financial institution until the loan is fully paid. It includes loan interest and a portion of the principal amount to be repaid. The sum of the principal and interest is divided by the loan’s term or the number of months it must be returned. This sum must be paid every month. So use a vehicle loan EMI calculator and bring in the pleasure and comfort that your family craves.

To learn more about vehicle loan EMI calculators, visit Piramal Finance for related blogs and explore their products and services.