A car or two-wheeler loan EMI (Equated Monthly Installment) is the fixed amount you pay every month to your lender until the loan is fully repaid. The EMI includes both principal and interest components, calculated using a standard formula based on loan amount, interest rate, and tenure. Vehicle loans are one of the most common types of consumer loans in India, helping millions of people purchase cars and two-wheelers through affordable monthly payments.
When you take a vehicle loan, you typically pay a down payment (usually 10-30% of vehicle price) and borrow the remaining amount. The lender charges interest on the borrowed amount, and you repay it through EMIs over a period of 1-7 years for cars and 1-5 years for two-wheelers. Use this calculator to understand your monthly obligations and total cost before purchasing your vehicle. For comprehensive loan planning, check our general EMI calculator, home loan eligibility calculator, or loan refinancing calculator if you're considering transferring your loan.
The EMI amount remains constant throughout the loan tenure, but the principal and interest components change each month. Initially, a larger portion goes towards interest, and as you progress, more goes towards principal repayment. Higher down payment reduces your loan amount and EMI, while longer tenure reduces EMI but increases total interest paid. Understanding this amortization schedule helps you plan prepayments effectively. If you're considering prepaying your loan, use our prepayment calculator to see the savings.
Interest rates for vehicle loans vary based on several factors including your credit score, income stability, vehicle model, and lender policies. Generally, car loans range from 8% to 15% p.a., while two-wheeler loans range from 10% to 18% p.a. Always compare offers from multiple lenders and negotiate for better rates. For more information on loan regulations and consumer rights, refer to the Reserve Bank of India guidelines.
Choose between Car or Two-Wheeler. The maximum loan tenure automatically adjusts based on your selection (7 years for cars, 5 years for two-wheelers).
Input the vehicle price and your down payment amount. The loan amount is automatically calculated. Higher down payment reduces your EMI burden.
Enter the interest rate offered by your lender and desired loan tenure. You can also manually adjust the loan amount if needed.
Click "Calculate EMI" to instantly see your monthly EMI, total interest, and total payment amount for the loan tenure.
Check the detailed breakdown showing vehicle price, down payment, loan amount, interest rate, and tenure details.
Review the payment breakdown to understand principal amount, total interest payable, and interest as percentage of loan amount.
Car loan EMI is calculated using the standard formula: EMI = [P × R × (1+R)^N] / [(1+R)^N - 1], where P is principal (loan amount), R is monthly interest rate (annual rate/12/100), and N is number of months. The EMI remains constant throughout the loan tenure, but the principal and interest components change each month. Initially, more goes towards interest, and gradually more goes towards principal repayment.
Interest rates vary based on several factors. For car loans, rates typically range from 8% to 15% p.a., while two-wheeler loans range from 10% to 18% p.a. Factors affecting rates include credit score (higher score = lower rate), income stability, vehicle model, loan amount, tenure, and lender policies. Always compare rates from multiple lenders and negotiate for the best deal.
Down payment requirements vary by lender and vehicle type:
Maximum loan tenure is typically 7 years for cars and 5 years for two-wheelers. However, some lenders may offer slightly different terms. Longer tenure reduces your EMI but increases total interest payable. Choose a tenure that balances affordable EMI with reasonable total interest cost.
Yes, most lenders allow prepayment (full or partial) after 12 months without penalties, subject to terms and conditions. Some lenders may charge prepayment penalties (2-4% of outstanding principal) if prepaid within the first year. Prepayment helps reduce total interest and loan tenure. Use our prepayment calculator to see the savings. Always check your loan agreement for prepayment terms before making a decision.