Car Loan EMI Calculator
Work out the monthly instalment on a new car loan. Pick a car for its on-road price in your city, or type the price, then set the down payment, interest rate and tenure.
Year-by-year repayment
| Year | Principal paid | Interest paid | Balance left |
|---|---|---|---|
| Year 1 | ₹1,93,205 | ₹79,675 | ₹7,06,795 |
| Year 2 | ₹2,13,013 | ₹59,867 | ₹4,93,781 |
| Year 3 | ₹2,34,852 | ₹38,028 | ₹2,58,929 |
| Year 4 | ₹2,58,929 | ₹13,950 | ₹0 |
How the EMI is worked out
Car loans in India use the reducing-balance method: each month's interest is charged only on the loan still outstanding, so the early EMIs are mostly interest and the later ones mostly principal.
P: the loan amount
The car's on-road price less your down payment.
r: the monthly rate
The yearly interest rate ÷ 12 ÷ 100. A 9.8% loan charges about 0.82% a month.
n: the instalments
The tenure in months. A 4-year loan is 48 EMIs.
Frequently asked questions
What will my EMI be on a ₹10 lakh car loan?
At 9.8% for 4 years it is about ₹25,300 a month, and you pay about ₹2.1 lakh in interest on top of the ₹10 lakh. The same loan over 3 years is about ₹32,200 a month, and over 5 years about ₹21,100. Change the amount, rate and tenure above to see your own figure.
What interest rate will I get on a car loan?
It depends on you more than on the car. Banks commonly offer new-car loans from about 8.5% to 11% a year to salaried applicants with a good credit score (750 or more). A lower score, a self-employed income or an NBFC lender usually means a higher rate. Ask for quotes from two or three lenders before you accept the dealer's.
How much down payment should I make?
Banks usually finance up to 85–90% of the price, so plan on at least 10–15% down. Paying 20% or more lowers the EMI and the interest, and makes approval easier. Keep some cash aside as well, because registration, insurance and the processing fee are often not covered by the loan.
Which tenure is best: 3, 5 or 7 years?
Pick the shortest tenure whose EMI sits comfortably in your budget. A longer tenure lowers the EMI but costs far more interest: on ₹10 lakh at 9.8%, 3 years costs about ₹1.6 lakh in interest and 7 years about ₹3.9 lakh. Most buyers settle on 3 to 5 years.
The dealer quoted a flat rate. Is that cheaper than the bank's rate?
Usually not. A flat rate charges interest on the full loan for the whole term, while a bank's reducing-balance rate charges it only on what you still owe. A 5% flat rate works out to roughly 9% on a reducing balance. Ask for the reducing-balance rate, or compare the EMI itself, before you compare lenders.
Can I close the loan early, and does it cost anything?
Yes, but many banks charge a foreclosure fee, commonly 2–5% of the outstanding amount, and some do not allow it in the first 6 to 12 months. Check the prepayment and foreclosure terms before you sign, because they decide whether paying the loan off early actually saves you money.
Will my bank's EMI match the calculator's?
It will be close if the rate and tenure are the same. What can still differ is the rate your bank offers you, a processing fee (often 0.5% to 1% of the loan) and any insurance or accessories added to the loan amount. The calculator gives you the EMI for the loan you enter, not the bank's offer.