1. What is EMI?

EMI (Equated Monthly Installment) is the fixed payment amount a borrower pays to a lender at a specified date each calendar month for vehicle loans in India. It includes both principal and interest components.

2. How EMI Calculation Works

The calculator uses the standard EMI formula:

Where:

• \( P \) — Loan principal amount (₹)
• \( r \) — Monthly interest rate (annual rate ÷ 12 ÷ 100)
• \( n \) — Loan tenure in months

Explanation: The formula calculates the fixed monthly payment that would pay off the loan over its term with equal installments.

3. Importance of EMI Calculation

Details: Understanding your EMI helps in financial planning, budgeting, and comparing different loan offers from banks and NBFCs in India.

4. Using the Calculator

Tips: Enter loan amount in ₹, annual interest rate (%), and loan tenure in months (typically 12-84 months for vehicle loans in India).

5. Frequently Asked Questions (FAQ)

Q1: What is a typical interest rate for vehicle loans in India?
A: As of 2024, rates typically range from 7.5% to 15% depending on vehicle type, loan tenure, and borrower's credit profile.

Q2: How does tenure affect EMI?
A: Longer tenures reduce EMI but increase total interest paid. Shorter tenures increase EMI but reduce total interest.

Q3: Are there other charges besides EMI?
A: Yes, processing fees (0.5-2% of loan amount), insurance, and possible foreclosure charges may apply.

Q4: Can I prepay my vehicle loan?
A: Most lenders allow prepayment after 6-12 months, though some may charge prepayment penalties (0-2%).

Q5: What is the maximum tenure for vehicle loans?
A: Typically 7 years (84 months) for new vehicles, 3-5 years for used vehicles in India.