Car Loan EMI Calculator
Plan your new or used car purchase. Calculate EMI, total interest and complete repayment schedule across any tenure.
Loan Details
You are borrowing ₹8,00,000 at 9.5% p.a. for 5 years.
Typical 8.7-11% p.a. across SBI, HDFC, ICICI, Axis car loans
Your EMI Breakdown
Computed on reducing-balance method, standard across Indian banks.
Yearly Amortization Schedule
| Year | Principal | Interest | Outstanding |
|---|---|---|---|
| Year 1 | ₹1,31,234 | ₹70,383 | ₹6,68,766 |
| Year 2 | ₹1,44,259 | ₹57,359 | ₹5,24,506 |
| Year 3 | ₹1,58,576 | ₹43,041 | ₹3,65,930 |
| Year 4 | ₹1,74,315 | ₹27,303 | ₹1,91,615 |
| Year 5 | ₹1,91,615 | ₹10,003 | ₹0 |
What is a Car Loan EMI?
A car loan EMI is the fixed monthly instalment a borrower pays to repay an auto loan over the chosen tenure. Indian car loans run between 12 and 84 months at rates of 8.7% to 13% per annum for new cars, and 11% to 16% for used cars. The EMI bundles principal repayment with interest, with interest forming the larger share in the early years.
Major lenders include State Bank of India, HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra, and Bajaj Finance. Most offer up to 85-90% of the on-road price for new cars and up to 80% for used cars.
How is Car Loan EMI Calculated?
Car loan EMI uses the standard reducing balance formula: EMI = P × r × (1+r)^n / ((1+r)^n − 1). For an ₹8 lakh car loan at 9.5% over 5 years, the EMI is approximately ₹16,800 per month. Over the full tenure you pay roughly ₹1.08 lakh in interest on top of the principal.
Tenure has the biggest impact on EMI affordability. Stretching the same ₹8 lakh loan from 5 years to 7 years drops the EMI by about ₹4,000/month but adds ₹50,000+ in total interest.
New Car vs Used Car Loan
New car loans offer lower interest rates (8.7-11%), longer tenures (up to 84 months), and higher LTV (85-90%). Used car loans carry higher rates (11-16%), shorter tenures (up to 60 months), and tighter LTV (70-80%). Lenders also check the car’s age - most cap used-car age at 7 years at loan maturity.
For a 5-year-old used car worth ₹5 lakh, a typical lender will finance ₹3.5-4 lakh at 14-16% for up to 5 years. Compare offers from Mahindra Finance, Tata Capital, and bank used-car schemes before signing.
Tips to Get Best Car Loan Rate
Negotiate with at least 3 lenders before committing. Improve your CIBIL score above 800 for the best rates. Choose a shorter tenure if cash flow permits - saves lakhs in interest. Avoid dealership financing without comparison; banks usually offer 50-150 bps lower rates than dealer-tied lenders. Use existing relationships - your salary account bank often gives 25-50 bps discount.
Frequently Asked Questions
Public sector banks like SBI offer car loans starting at 8.65% per annum for prime borrowers with CIBIL above 800. Private banks (HDFC, ICICI) typically start at 8.85-9.5%. NBFCs are usually 100-300 bps higher.
Most banks offer up to 7 years (84 months) for new cars. Used car loans are capped at 5 years (60 months) and the total age of car at loan maturity must usually be under 12 years.
Banks typically finance 85-90% of the on-road price for new cars. A few lenders extend 100% financing to existing high-value customers or for select promotional schemes. You will still need to pay registration and insurance upfront in most cases.
For salaried individuals, no. For self-employed or business owners using the car for business, the interest paid is tax-deductible as a business expense under the Income Tax Act.
A CIBIL below 650 makes approval difficult at banks. NBFCs may approve at 600-650 but at significantly higher rates (13-16%). Adding a co-applicant with strong credit improves approval odds.
A single missed EMI triggers a late payment fee (typically 2-3% of EMI), a CIBIL score drop of 30-70 points, and a penalty call from the lender. Three consecutive misses can lead to the loan being classified as an NPA and vehicle repossession proceedings.
Floating-rate car loans to individuals carry zero prepayment penalty (RBI mandate). Fixed-rate loans may charge 2-6% of outstanding principal. Always verify before signing.
If your investments earn more than the loan interest rate (post-tax), financing makes sense. If you have idle cash and conservative investments, paying cash saves interest. Most salaried buyers benefit from a 3-4 year loan to maintain liquidity.
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