Car loan EMI (Equated Monthly Installment) is the fixed amount you pay to the lender each month until your car loan is fully repaid. It includes both principal and interest components.

How is Car Loan EMI calculated?

The EMI is calculated using the formula:

EMI = [P x R x (1+R)^N]/[(1+R)^N-1]

Where:

• P is the Principal loan amount
• R is the monthly interest rate (annual rate divided by 12 and then by 100)
• N is the loan tenure in months

Tips for better car loan terms:

• Make a larger down payment to reduce loan amount
• Maintain a good credit score (750+) for better interest rates
• Compare offers from multiple lenders
• Consider pre-approved loans for better negotiation
• Check for hidden charges and processing fees
• Opt for shorter loan tenure if affordable

Additional costs to consider:

• Registration charges (typically 10-14% of car cost)
• Insurance premium (comprehensive coverage)
• Extended warranty
• Accessories and add-ons
• Maintenance costs