Car Loan EMI Calculator
Work out the monthly EMI and total interest on a new or used car loan before you visit the showroom.
How to use the Car Loan EMI
- Enter the loan amount: the on-road price minus your down payment.
- Enter the interest rate offered by the bank or NBFC.
- Choose the tenure in years (most car loans run 1 to 7 years).
- Read the EMI, total interest and the year-by-year schedule.
How car loan EMI is calculated
A car loan is repaid in equal monthly instalments (EMIs). Each EMI covers that month's interest on the outstanding balance, and the rest reduces the principal. Early EMIs are mostly interest; later ones are mostly principal. The calculator uses the standard reducing-balance formula that banks use, so the EMI matches the lender's quote for the same amount, rate and tenure.
Choosing the right tenure
A longer tenure lowers the EMI but raises the total interest, and cars lose value quickly. A 7-year loan can leave you owing more than the car is worth for the first few years. Most buyers are best served by 3 to 5 years: the EMI stays manageable and the interest cost stays reasonable. Try a few tenures in the calculator and compare the "Total interest" figure.
New car vs used car loans
New car loans usually carry lower rates and can fund up to 80–100% of the on-road price. Used car loans cost more, often 2–5 percentage points higher, fund a smaller share of the value, and have shorter tenures. If you are buying used, enter a higher rate to see the realistic EMI.
Costs the EMI doesn't show
- Processing fee, often 0.5–2% of the loan, charged upfront.
- Insurance and registration, part of the on-road price, sometimes financed.
- Foreclosure charges if you repay early; check the loan agreement.
Plan the whole purchase
Keep the car EMI to a comfortable share of your take-home pay, so fuel, insurance and servicing still fit. Estimate running costs with the fuel cost calculator, and see how extra payments cut interest with the loan prepayment calculator. For other loans use the EMI calculator.
Down payment matters
A bigger down payment lowers both the EMI and the total interest, and it may get you a better rate. Paying 20% or more upfront also means you are less likely to owe more than the car is worth.
Frequently asked questions
What is the EMI on a ₹8 lakh car loan?
Is a longer car loan tenure better?
Can I prepay my car loan?
Are used car loan rates higher?
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