worldofcalcsCar Loan Calculator 🚗
Monthly EMI
₹16,607
Loan Amount
₹8,00,000
Total Interest
₹1,96,401
Total Cost
₹9,96,401
How a car loan works
A car loan pays for part of the on-road price, which includes the ex-showroom price, road tax, registration and insurance. You pay the rest as a down payment and repay the loan in equal monthly instalments (EMIs) over 1–7 years. This calculator shows the EMI, total interest and total cost.
How the EMI is calculated
EMI = L × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
L is the loan: the on-road price minus your down payment and the exchange value of any old car. r is the yearly interest rate ÷ 12 ÷ 100 and n is the number of months. Interest is charged each month on the balance still owed.
Before you sign
- A common guideline is 20/4/10: pay at least 20% down, borrow for no more than 4 years, and keep all car costs (EMI, fuel, insurance) under 10% of your monthly income.
- Compare the bank's rate with the dealer's offer. Dealer schemes with a low or 'flat' rate may add processing fees or require costly insurance.
- A flat rate is not the real rate: 5% flat over 5 years costs about the same as 9.15% on a normal reducing-balance loan.
- Check the foreclosure charges. Many car loans are fixed-rate and charge a few percent if you repay early.
- Used-car loans usually cost a few percentage points more than new-car loans and run for shorter periods.
- The car is hypothecated to the lender until the loan is repaid. After the last EMI, get the NOC and have the hypothecation removed from the registration certificate.
Worked example
- On-road price ₹10,00,000, down payment ₹2,00,000, so the loan is ₹8,00,000
- At 9% for 5 years (60 months), the EMI is ₹16,607
- Total repaid: ₹9,96,401, of which ₹1,96,401 is interest
- Over 7 years the EMI falls to ₹12,871 but interest rises to ₹2,81,186
- Over 3 years the EMI is ₹25,440 and interest only ₹1,15,832
Car loan EMI by amount and tenure
Monthly EMI at 9% a year.
| Loan amount | 3 years | 5 years | 7 years |
|---|---|---|---|
| ₹3,00,000 | ₹9,540 | ₹6,228 | ₹4,827 |
| ₹5,00,000 | ₹15,900 | ₹10,379 | ₹8,045 |
| ₹8,00,000 | ₹25,440 | ₹16,607 | ₹12,871 |
| ₹10,00,000 | ₹31,800 | ₹20,758 | ₹16,089 |
| ₹15,00,000 | ₹47,700 | ₹31,138 | ₹24,134 |
A longer tenure lowers the EMI but increases the total interest you pay.