Car Loan EMI Calculator
Plan your car loan with total clarity.
Calculate car loan EMI, Loan-to-Value, total cost of ownership and prepayment savings — the same reducing-balance formula every Indian bank uses.
Loan details
Loan amount
₹8,00,000
Amount financed after deducting the down payment.
Car loan insights
The true picture of your car deal
Beyond the EMI — how much you're really borrowing, and what the car will cost you over the tenure.
Loan-to-Value (LTV)
80.0%
Healthy
Down payment
20.0%
₹2,00,000
Total borrowing cost
₹1.96 L
Interest + upfront charges
Total cost of ownership
₹11.96 L
Down + upfront + all EMIs
Monthly income needed
₹41,517
At 40% FOIR
Interest load
24.6%
Total interest ÷ loan
Principal vs Interest
Loan Health Score
Excellent(based on 4 of 5 factors)
A composite of EMI affordability, tenure, total interest ratio and prepayment strategy.
Pending: EMI affordability. Grade will firm up once every input is filled.
EMI affordability
— / 100
Enter your income to score affordability.
Loan duration
95 / 100
5.0-year tenure keeps interest reasonable.
Total interest ratio
100 / 100
Interest is 25% of the principal amount. Negotiating a 0.5% lower rate would drop this by 11.6 K.
Interest efficiency
84 / 100
Rate of 9.00% is above market — negotiate or explore a balance transfer to shave 0.5–1%.
Prepayment plan
60 / 100
Adding ₹2,000/month would save 27.0 K in interest and close the loan 7 months earlier.
Every score uses the RBI-standard reducing-balance formula — see how →
EMI360 Recommendations
Personalized advice from your loan analysis
Ranked by likely impact on your total interest and closing date.
Increase Monthly EMI by Rs 2,000
Adding Rs 2,000 to your EMI reduces total interest by Rs 27.0 K and closes your loan 7 months earlier.
Interest saved
₹27.0 K
Loan closes
0y 7m earlier
Compare scenarios
Current plan vs Optimized plan
You save
₹37.8 K
19.3% less interest · 0.9 yrs earlier
What changed
Extra EMI / month (sample)
Visual insights
Where your money goes
Outstanding balance over time
Cumulative principal vs interest
Prepayment comparison
Amortization schedule
Every EMI, tracked
| Year | EMI Total | Principal | Interest | Balance | |
|---|---|---|---|---|---|
| Year 1 | ₹1,99,280 | ₹1,32,664 | ₹66,616 | ₹6,67,336 | |
| Oct 2026 | ₹16,607 | ₹10,607 | ₹6,000 | ₹7,89,393 | |
| Nov 2026 | ₹16,607 | ₹10,686 | ₹5,920 | ₹7,78,707 | |
| Dec 2026 | ₹16,607 | ₹10,766 | ₹5,840 | ₹7,67,941 | |
| Jan 2027 | ₹16,607 | ₹10,847 | ₹5,760 | ₹7,57,094 | |
| Feb 2027 | ₹16,607 | ₹10,928 | ₹5,678 | ₹7,46,165 | |
| Mar 2027 | ₹16,607 | ₹11,010 | ₹5,596 | ₹7,35,155 | |
| Apr 2027 | ₹16,607 | ₹11,093 | ₹5,514 | ₹7,24,062 | |
| May 2027 | ₹16,607 | ₹11,176 | ₹5,430 | ₹7,12,885 | |
| Jun 2027 | ₹16,607 | ₹11,260 | ₹5,347 | ₹7,01,625 | |
| Jul 2027 | ₹16,607 | ₹11,344 | ₹5,262 | ₹6,90,281 | |
| Aug 2027 | ₹16,607 | ₹11,430 | ₹5,177 | ₹6,78,851 | |
| Sep 2027 | ₹16,607 | ₹11,515 | ₹5,091 | ₹6,67,336 | |
| Year 2 | ₹1,99,280 | ₹1,45,109 | ₹54,171 | ₹5,22,227 | |
| Year 3 | ₹1,99,280 | ₹1,58,721 | ₹40,559 | ₹3,63,506 | |
| Year 4 | ₹1,99,280 | ₹1,73,610 | ₹25,670 | ₹1,89,896 | |
| Year 5 | ₹1,99,280 | ₹1,89,896 | ₹9,384 | ₹0 |
Smart insights
What your numbers are telling you
Solid plan — at 9% for 5 years, your EMI is ₹16,607.
Affordability check
Is this EMI sustainable?
Calculation assumptions
How these numbers are computed
Transparency by design. These are the rules and simplifications used by the EMI360 calculator.
Standard reducing-balance EMI formula
EMI = P × r × (1+r)^n / ((1+r)^n − 1), where P is principal, r is monthly interest rate and n is number of months.
Monthly compounding
Interest is calculated on the outstanding principal at the start of each month.
Constant interest rate
The rate you enter is assumed constant across the tenure. Floating-rate loans may vary with lender resets and RBI policy.
Prepayments reduce tenure
Extra payments (monthly, periodic and one-time) are applied fully to principal — tenure shortens, EMI stays the same.
Step-up EMI applied annually
Every 12 months your total monthly outflow (base EMI + any recurring extra) grows by the step-up %, mirroring salary hikes. The extra amount above the original EMI is applied straight to principal.
Taxes, insurance and lender charges excluded
Processing fees, stamp duty, property taxes, GST, MODT, insurance and legal charges are not included unless entered explicitly.
Estimates for planning only
Actual amortization from your bank may differ slightly because of business-day rounding, disbursement timing and lender-specific conventions.
About the Car Loan EMI Calculator
Use this free car loan EMI calculator to estimate the monthly instalment, total interest and total repayment for a new or used car loan in India. Enter the on-road price, down payment, annual interest rate and tenure; the calculator derives the financed amount and applies the reducing-balance EMI formula used for most bank and NBFC vehicle loans.
A car loan finances a depreciating asset, so the lowest EMI is not always the safest choice. A larger down payment reduces both the principal and loan-to-value ratio, while a shorter tenure limits interest and helps the outstanding balance fall faster. The results also show the repayment schedule and ownership-cost inputs so you can compare offers on more than the advertised monthly EMI.
Worked example: same ₹8 L car, two down payments
- On-road price
- ₹8,00,000
- 20% down — loan
- ₹6,40,000
- 20% down — EMI
- ₹13,347
- 15% down — loan
- ₹6,80,000
- 15% down — EMI
- ₹14,182
- Extra interest at 85% LTV
- ₹10,053
Take an ₹8 L on-road price at 9.2% over 5 years. Put down ₹1.6 L (20%) and you finance ₹6.4 L: EMI ₹13,347, total interest ₹1,60,853. Put down only ₹1.2 L (15%) and you finance ₹6.8 L: EMI ₹14,182, total interest ₹1,70,907. The ₹40,000 you kept in your pocket costs ₹10,053 in extra interest over the tenure.
That is the visible cost. The invisible one is the rate. Most lenders price car loans in LTV bands, and crossing from the 80% band into the 85–90% band typically adds 25–75 bps. At 9.7% instead of 9.2%, that same ₹6.8 L loan costs roughly ₹9,000 more again — so the real penalty for the smaller down payment is closer to ₹19,000, not ₹10,000.
There is a third effect nobody models: negative equity. At 90% LTV over 7 years, the car's resale value stays below the outstanding balance until roughly year four. If the vehicle is totalled or you need to sell early, you write a cheque to close a loan on a car you no longer own. A 20% down payment on a 5-year tenure closes that gap in about 18 months.
How it’s calculated
Financed amount = On-road price − Down payment; EMI = P × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1)
To calculate car loan EMI, P is the financed principal after subtracting the down payment, r is the annual interest rate divided by 12 and 100, and n is the tenure in months. For example, a 9% annual rate becomes a monthly rate of 0.0075, while five years becomes 60 monthly instalments.
Each month, interest is charged on the outstanding balance. The interest portion is therefore larger near the beginning of the loan and falls as principal is repaid. Loan-to-value is financed amount divided by on-road price; reducing either the financed amount or tenure lowers the total interest, although the lender's actual charges and rounding may differ.
Car loan EMI for ₹3 lakh to ₹15 lakh
These examples use a 9% annual reducing-balance rate and a 5-year tenure. They are calculated with the same EMI engine as the live calculator above.
| Loan amount | Monthly EMI | Total interest | Total repayment |
|---|---|---|---|
| ₹3,00,000 | ₹6,228 | ₹73,650 | ₹3,73,650 |
| ₹5,00,000 | ₹10,379 | ₹1,22,751 | ₹6,22,751 |
| ₹8,00,000 | ₹16,607 | ₹1,96,401 | ₹9,96,401 |
| ₹10,00,000 | ₹20,758 | ₹2,45,501 | ₹12,45,501 |
| ₹15,00,000 | ₹31,138 | ₹3,68,252 | ₹18,68,252 |
Illustrative figures only. Change the rate, tenure, on-road price and down payment in the calculator for an estimate matched to your lender quote.
Factors that affect your car loan EMI
Down payment and LTV band
The lever with two effects — it cuts the principal and often moves you into a cheaper rate band. Twenty percent down is the practical sweet spot for new cars.
New vs used
Used-car loans price 2–4 percentage points higher and fund a smaller share of value. A three-year-old car with a 75% LTV loan can end up with a similar EMI to a new one.
Tenure vs depreciation
Seven-year car loans exist because they make the EMI look small. They also guarantee you spend most of the loan owing more than the car is worth. Five years is the sane ceiling.
Credit score
Above 780 gets the showroom's advertised rate. Below 700, dealer-arranged finance often quotes 12%+ — worth walking to your own bank for.
Dealer finance vs bank finance
Dealer tie-ups are convenient and frequently carry a built-in commission in the rate. Get one bank quote before you sign anything on the showroom floor.
Insurance and add-ons bundled into the loan
Extended warranties, accessories and multi-year insurance financed into the principal quietly raise both your EMI and your LTV. Pay for those in cash if you can.
Next: check the EMI against what your income can actually carry
A ₹13,347 car EMI is only sensible in the context of everything else you pay each month. Lenders cap total obligations at 40–55% of net income, and a car loan taken today directly shrinks the home loan you can get next year — often by several lakh.
The Loan Eligibility Calculator works backwards from your income and existing EMIs to the borrowing capacity you actually have. Run the car loan through it before you commit, especially if a home purchase is anywhere in the next three years.
Common mistakes
- Budgeting against the ex-showroom price when the loan and the down payment are both calculated on on-road.
- Taking a 7-year tenure to make the EMI fit, then being stuck in negative equity for four of those years.
- Financing insurance, accessories and extended warranty into the principal instead of paying cash.
- Accepting dealer finance without a single competing bank quote.
- Ignoring that a car EMI reduces home loan eligibility roughly ₹10 L for every ₹9,000 of monthly obligation.
- Forgetting the running cost — fuel, servicing and insurance renewals typically add 25–40% on top of the EMI.
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Understand every number
How is Car Loan EMI calculated?
EMI = [P × R × (1+R)^N] / [(1+R)^N − 1], where P is the financed amount after down payment, R is the monthly interest rate (annual ÷ 12 ÷ 100) and N is tenure in months. The calculator applies this standard reducing-balance method.
What is Loan-to-Value (LTV)?
LTV = Loan Amount ÷ On-road Price. A lower LTV means a higher down payment, smaller EMI and less risk of owing more than the car's resale value. Funding limits vary by lender, vehicle and borrower profile.
Why down payment matters more than in a home loan
Cars depreciate 15–20% in year one and roughly 40–50% by year five. A healthy 20%+ down payment keeps you from owing more than the car is worth — a critical difference from home loans where the asset appreciates.
New car vs used car loan interest
Used-car loans often carry a higher rate and lower funding percentage because valuation, age and resale risk are less predictable. Compare the rate, processing fee, permitted tenure and foreclosure terms using the same loan amount before deciding.
Prepayment on car loans
Most Indian car loans are fixed-rate, and lenders may charge 2–5% on the outstanding for foreclosure. Even so, prepaying in the first two years usually pays off — that is when the interest component of every EMI is highest.
Total Cost of Ownership (TCO)
TCO includes EMIs + down payment + insurance renewals + fuel + service + tyres + resale loss. A ₹10 L car typically costs ₹14–16 L over 5 years. Choosing a shorter tenure and larger down payment cuts TCO significantly.
Understand the math behind this calculator
Frequently asked
Most car loans use the reducing-balance method: EMI = [P × R × (1+R)^N] ÷ [(1+R)^N − 1]. P is the financed amount, R is the monthly interest rate and N is the number of monthly instalments. Interest is charged on the outstanding principal, so earlier EMIs contain more interest.
A 20% down payment is a useful planning benchmark, but the right amount depends on your savings buffer and the lender's funding limit. A larger down payment lowers principal, EMI, total interest and LTV; avoid using emergency savings only to reduce the loan.
Increase the down payment. A ₹1 L extra down payment on a ₹8 L / 5-year / 9% loan saves roughly ₹24,000 in interest and ₹2,000 in monthly EMI. Extending tenure lowers EMI but multiplies total interest — and cars stop being worth financing after year five.
Yes. Fixed-rate car loans typically allow prepayment with a 2–5% charge on the outstanding principal for the first 1–3 years, and free thereafter — RBI does not mandate zero prepayment charges on car loans the way it does for floating-rate home loans. Check your loan agreement.
Car loans may be offered at fixed or floating rates depending on the lender and product. A fixed rate gives predictable instalments; a floating rate can change with its benchmark. Compare the effective rate and prepayment terms rather than assuming one structure is always cheaper.
Many new-car loans offer tenures up to seven years, while used-car limits depend on the vehicle's age and lender policy. A longer tenure reduces EMI but increases total interest and can leave the outstanding balance above the car's resale value for longer.
The processing fee varies by lender and offer, and GST is normally added to the fee. Include both in the upfront cost when comparing loans because they are not reflected in the headline interest rate or monthly EMI.
Foreclosure means paying off the entire outstanding principal in one shot and closing the loan early. Charges are typically 2–5% of the outstanding for the first 12–24 months and lower or nil after. Get a foreclosure letter and NOC — you'll need it to remove the bank's hypothecation from the RC.
Paying a lump sum above your EMI without closing the loan. It reduces the outstanding principal directly, so future interest is calculated on a smaller balance. Some lenders limit partial prepayment to once or twice per year — check terms.
Lenders assess age, income stability, existing EMIs, credit history, down payment and the chosen vehicle. They use FOIR to test whether the proposed EMI fits your monthly income. Use the Loan Eligibility Calculator for an estimate, then confirm the lender's current policy.
PAN, Aadhaar, address proof, last 3 months' salary slips (or 2 years' ITR + Form 16 for self-employed), 6 months' bank statement, proforma invoice from the dealer, and passport-sized photos. Some banks also ask for reference details.
A used car may reduce the purchase price but can carry a higher loan rate, shorter tenure and lower approved LTV. Compare the financed amount, total interest, maintenance outlook and expected resale value—not only the EMI—to decide which option fits your budget.