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FinCalc India

Car Loan EMI Calculator

A car is a depreciating asset, so financing it for too long means paying interest on something worth far less than the loan by the end of the tenure.

Enter the loan amount (on-road price minus your down payment), the rate and the tenure to see the EMI and total interest.

Assumptions used
  • Reducing-balance interest at a constant rate.
  • Insurance, extended warranty and accessories are not included in the loan amount.

Enter your details

₹
50,0002,00,00,000

On-road price minus your down payment.

%
620
years
18
%
04

Results

Monthly EMI

₹16,801

Total Interest
₹2,08,089
Total Repayment
₹10,08,089
Processing Fee
₹8,000
Total Cost of Loan
₹10,16,089
  • Principal₹8.00 L(79%)
  • Interest₹2.08 L(21%)
Year-wise amortisation schedule (5 rows)
YearPrincipal PaidInterest PaidTotal PaidBalance
1₹1,31,234₹70,383₹2,01,618₹6,68,766
2₹1,44,259₹57,359₹2,01,618₹5,24,506
3₹1,58,576₹43,041₹2,01,618₹3,65,930
4₹1,74,315₹27,303₹2,01,618₹1,91,615
5₹1,91,615₹10,003₹2,01,618₹0

Values are aggregated per year; the final row may be a partial year.

How car loan EMI is calculated

The reducing-balance formula applies. New-car loans are usually 7–10% per annum; used-car loans are 3–6 percentage points higher because the collateral is worth less and harder to value.

EMI = P × r × (1 + r)^n ÷ [ (1 + r)^n − 1 ]

  • P = loan amount (on-road price − down payment)
  • r = annual rate ÷ 1200
  • n = tenure in months

The down payment matters

  • A bigger down payment shrinks the loan, the EMI and the total interest.
  • It also keeps you from going 'upside down' — owing more than the car is worth — which matters if the car is written off and insurance pays only the current value.
  • Many lenders finance up to 85–90% of the on-road price; the rest plus insurance is your outlay.

Keep the tenure short

Match the tenure to how long you plan to keep the car, and ideally no more than five years. Beyond that, depreciation outpaces principal repayment for most mass-market cars.

This calculator is for education and illustration only. Results are estimates based on the inputs and assumptions shown and are not financial, investment, tax or legal advice. Verify figures with your bank, a registered adviser or the relevant government department before acting.

Frequently asked questions

What is the ideal car loan tenure?

Three to five years for a new car. A longer tenure lowers the EMI but you keep paying interest well after the car has lost most of its resale value.

How much down payment should I make on a car?

At least 20% of the on-road price, more if you can. A larger down payment reduces the EMI, the total interest and the risk of owing more than the car is worth.

Are used-car loan rates higher?

Yes, typically 3 to 6 percentage points above new-car rates, with shorter maximum tenures, because the vehicle is older and its value is harder to assess.

Can I prepay a car loan?

Usually after 6–12 EMIs. Fixed-rate car loans may carry a foreclosure charge of a few percent on the outstanding principal, so weigh the interest saved against the fee.

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