Car EMI Calculator
Enter your car's on-road price, down payment, interest rate, and tenure to see your exact monthly EMI, total interest, and full amortization schedule.
Car EMI Calculator
Calculation Summary
Breakdown Amortization Schedule
| Year | Total Payment | Principal Repaid | Interest Charges | Ending Balance |
|---|---|---|---|---|
| Year 1 | ₹1,56,902 | ₹84,519 | ₹72,383 | ₹7,15,481 |
| Year 2 | ₹1,56,902 | ₹92,908 | ₹63,994 | ₹6,22,573 |
| Year 3 | ₹1,56,902 | ₹1,02,129 | ₹54,774 | ₹5,20,444 |
| Year 4 | ₹1,56,902 | ₹1,12,265 | ₹44,637 | ₹4,08,179 |
| Year 5 | ₹1,56,902 | ₹1,23,407 | ₹33,495 | ₹2,84,773 |
| Year 6 | ₹1,56,902 | ₹1,35,655 | ₹21,248 | ₹1,49,118 |
| Year 7 | ₹1,56,902 | ₹1,49,118 | ₹7,784 | ₹0 |
Introduction
Buying a car is usually the second-biggest purchase most people make after a home, and almost all of it is financed through a car loan. Before you sign a dealer's finance offer or a bank's sanction letter, use this car EMI calculator to know your exact monthly outflow, based on the amount you're actually borrowing rather than the sticker price of the vehicle. Because dealers often quote the on-road price (ex-showroom price plus RTO registration, road tax, and insurance) while banks lend against that figure minus your down payment, it's easy to misjudge your real EMI unless you calculate it on the correct loan amount.
How Car Loan EMI Is Calculated
Car loans use the same reducing-balance formula as home and personal loans, applied to the amount financed — the on-road price minus your down payment — rather than the full vehicle price:
Where:
- P (Principal): On-road price minus down payment — the actual amount the bank disburses.
- r (Monthly Interest Rate): Annual rate ÷ 12 ÷ 100.
- n (Tenure in Months): Loan tenure in years × 12.
Worked example: A car with an on-road price of ₹9,50,000 and a down payment of ₹1,50,000 leaves a financed amount of ₹8,00,000. At 9.5% annual interest for 7 years:
- P = ₹8,00,000
- r = 9.5 / 12 / 100 = 0.007917
- n = 84 months
- Monthly EMI ≈ ₹13,075
- Total interest over 7 years ≈ ₹2,98,316
- Total amount repaid ≈ ₹10,98,316
Car Loan EMI Table (₹5,00,000 to ₹20,00,000)
Monthly EMI for common car loan amounts at a sample 9.5% annual interest rate across 3, 5, and 7-year tenures. Actual rates vary by lender — always check current bank rates before applying.
| Loan Amount | 3 Years | 5 Years | 7 Years |
|---|---|---|---|
| ₹5,00,000 | ₹16,016 | ₹10,501 | ₹8,172 |
| ₹8,00,000 | ₹25,626 | ₹16,801 | ₹13,075 |
| ₹10,00,000 | ₹32,033 | ₹21,002 | ₹16,344 |
| ₹15,00,000 | ₹48,049 | ₹31,503 | ₹24,516 |
| ₹20,00,000 | ₹64,066 | ₹42,004 | ₹32,688 |
Example: A ₹10,00,000 car loan at 9.5% for 5 years carries an EMI of ₹21,002, with total interest of ₹2,60,112 over the tenure.
New Car Loan vs Used Car Loan
New car loans are the cheapest form of vehicle financing, with banks typically lending at 8.5% to 11% per annum because the car's value and depreciation curve are well known and the vehicle itself serves as strong collateral. Lenders often finance up to 90% of the on-road price for new cars. Used car loans cost more — usually 11% to 16% per annum — because older vehicles depreciate faster and are harder to value consistently, so lenders cap financing at 70% to 85% of the car's assessed value and shorten the maximum tenure, often to 5 years instead of 7 or 8. If you're buying used, expect a larger down payment requirement and a meaningfully higher EMI for the same loan amount.
Dealer Finance vs Bank Loan: Flat Rate vs Reducing Rate
Car dealers and some NBFCs advertise a "flat rate" of interest, which sounds lower than a bank's reducing-rate quote but is calculated very differently. A flat rate charges interest on the full original principal for every year of the tenure, while a reducing (diminishing) rate charges interest only on the balance still outstanding each month. This makes a flat rate's true, or "effective," cost roughly 1.8 to 1.9 times higher than the number advertised.
| Financing Type | Advertised Rate | Monthly EMI | Total Interest (5 yrs) |
|---|---|---|---|
| Dealer Flat Rate | 4.5% flat | ₹16,333 | ₹1,80,000 |
| Bank Reducing Rate | 9.5% reducing | ₹16,801 | ₹2,08,089 |
On a ₹8,00,000 loan over 5 years, a 4.5% flat rate produces an EMI of ₹16,333 — which looks cheaper than the bank's 9.5% reducing-rate EMI of ₹16,801. But that 4.5% flat rate is mathematically equivalent to approximately a 8.3% reducing rate. Always ask the dealer or NBFC for the reducing-rate equivalent before comparing their offer to a bank loan.
Tips to Reduce Your Car Loan EMI
- Increase your down payment: Every extra rupee you pay upfront is one rupee the bank doesn't charge interest on for years. Even a 10% higher down payment can noticeably cut your EMI.
- Choose the shortest tenure you can afford: Stretching a car loan beyond 5 years rapidly increases total interest, since cars depreciate much faster than the loan balance falls in the later years.
- Avoid financing add-ons into the loan: Extended warranties, accessories, and insurance add-ons rolled into the loan amount increase your principal — and therefore your EMI — for the entire tenure. Pay for these separately if possible.
- Negotiate the interest rate, not just the car price: A good credit score (750+), a stable income, and an existing relationship with the bank can often shave 0.5% to 1% off the quoted rate.
- Compare the reducing-rate equivalent before accepting dealer finance: As shown above, a dealer's advertised flat rate can cost nearly double what it appears to. Convert it to a reducing rate before comparing against a bank's offer.
Frequently Asked Questions (FAQ)
What is a good interest rate for a car loan in India?
Bank car loan interest rates in India typically range from 8.5% to 11% per annum for new cars, depending on your credit score, income, and the lender's policy. Public sector banks often offer the lowest rates (around 8.5% to 9.5%), while NBFCs and dealer-tied financiers may charge 10% to 13%. A score above 750 usually qualifies you for the best available rate.
How much down payment should I pay for a car loan?
Most banks finance 80% to 90% of the on-road price, so a down payment of 10% to 20% is standard. Paying a higher down payment reduces your loan principal, which lowers both your monthly EMI and total interest paid. For example, increasing the down payment from ₹1,50,000 to ₹2,50,000 on a ₹9,50,000 on-road price car reduces the financed amount from ₹8,00,000 to ₹7,00,000, cutting the EMI at 9.5% for 7 years from ₹13,075 to roughly ₹11,441.
Is it better to take a longer or shorter car loan tenure?
A shorter tenure (3 to 5 years) means a higher monthly EMI but significantly less total interest, since car loan interest compounds on the outstanding reducing balance. A longer tenure (6 to 8 years) lowers the EMI but increases the total interest paid over the life of the loan, because the principal takes longer to shrink. Choose the shortest tenure your monthly budget can comfortably support.
Can I prepay or foreclose my car loan early?
Yes, most lenders allow part-prepayment or full foreclosure of a car loan after a minimum lock-in period (often 6 to 12 months). Unlike home loans, car loans are not covered by the RBI ban on prepayment penalties for individual floating-rate loans, so banks and NBFCs commonly charge a foreclosure fee of 2% to 5% of the outstanding principal. Always check this charge before planning early closure.
What documents are required for a car loan in India?
Lenders typically ask for KYC documents (PAN and Aadhaar), address proof, the last 3 months of salary slips or ITR for self-employed applicants, 6 months of bank statements, a passport-size photo, and the vehicle quotation or proforma invoice from the dealer. Existing loan or credit card statements may also be requested to assess your repayment capacity.
Is a new car loan cheaper than a used car loan?
Yes. New car loans carry lower interest rates (roughly 8.5% to 11%) because the vehicle itself is high-value collateral and depreciates predictably. Used car loans are priced higher (roughly 11% to 16%) since older vehicles depreciate faster and carry more valuation uncertainty, and lenders usually cap financing at 70% to 85% of the used car’s assessed value instead of the full on-road price.