Car Loan EMI Calculator — monthly installment & amortisation
Calculate EMI for new or used car loan. Enter loan amount, interest rate, and tenure. Full amortisation breakdown included.
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About the Car EMI Calculator
Car loans in India typically run 1–7 years at floating or fixed rates. EMI = [P × r × (1+r)^n] / [(1+r)^n − 1], where P is loan amount, r is monthly rate, n is months. New car loans are typically 8.75–11% (PSU banks at the lower end, NBFCs at the higher end). Used car loans run 11–14% — the higher rate compensates lenders for the faster depreciation and resale risk on a pre-owned vehicle.
Tip: prefer 3–5 year tenures despite the higher EMI. Longer tenures mean significantly more interest paid, plus risk of the car being worth less than the outstanding loan (negative equity) if you want to sell mid-loan. A 7-year ₹10L loan at 9.5% costs ₹3.65L in total interest; the same loan at 4 years costs ₹2.05L. Stretching tenure to lower EMI is rarely worth the extra ₹1.6 lakh interest.
Down payment matters more than tenure. Putting down 20–30% instead of financing 100% dramatically cuts total interest paid and keeps EMI manageable. The ideal split: down payment ≥ 20% of on-road price, loan tenure ≤ 5 years, EMI ≤ 10% of monthly take-home (combined with all other EMIs ≤ 40%). If you can't meet these thresholds, you're stretching beyond what the asset justifies — consider a cheaper car or wait until you can afford the right structure.
Hidden costs of car ownership beyond the loan: insurance (3–4% of vehicle value annually for comprehensive), registration (8–12% of ex-showroom in most states), road tax, maintenance (₹15–30K/year for sedans, more for premium SUVs), fuel, parking, and depreciation (typically 20–30% in year 1, then 10–15% per year). Total annual cost of running a ₹10L car often exceeds ₹2 lakh excluding the loan — budget accordingly before signing.
Loan vs cash purchase math: if you have the cash, paying upfront avoids the 9.5% interest cost. But if your alternative is keeping that cash invested in equity earning 12%+, the loan can be slightly net-positive. The catch: most people who 'choose' to take a loan to keep cash invested actually end up spending the cash. The disciplined version of this strategy works on paper; the lived version usually doesn't. Most middle-class Indian families do better paying the maximum down payment they can afford and keeping the loan tenure short.