Car Loan EMI Calculator
Enter your car's on-road price and down payment to calculate your exact monthly EMI.
Most Indian lenders finance 80-90% of the on-road price, so a 10-20% down payment is typical.
How Car Loan EMI Is Calculated
Your car loan EMI is based on the loan amount you actually borrow, which is your car's on-road price minus your down payment. A larger down payment directly lowers your loan amount, which lowers both your EMI and your total interest paid over the loan term.
EMI = P x R x (1+R)^N / ((1+R)^N - 1), where P is the loan amount, R is the monthly interest rate, and N is the number of monthly instalments.
Typical Car Loan Terms in India
| Factor | Typical Range |
|---|---|
| Interest rate | 8.5% - 13% per year (new cars usually lower than used cars) |
| Loan-to-value (LTV) | Up to 80-90% of on-road price |
| Tenure | 1 to 7 years |
| Processing fee | 0.5% - 1% of loan amount |
Tips to Reduce Your Car Loan EMI
- Increase your down payment where possible - even 10% more can meaningfully lower your EMI.
- Compare rates across banks and NBFCs; new-car loans usually get better rates than used-car loans.
- Choose the shortest tenure your monthly budget comfortably allows to minimise total interest paid.
- Check for manufacturer or dealer tie-up finance offers, which sometimes carry lower rates during festive seasons.
- Maintain a healthy credit score (750+) before applying, since it directly affects the interest rate you're offered.
Frequently Asked Questions
Does this calculator include RTO and insurance costs?
Enter your full on-road price (which already includes RTO registration, road tax and insurance) as the "On-Road Car Price" so the EMI reflects your actual borrowing need.
Is a used car loan interest rate different from a new car loan?
Yes, used car loans typically carry higher interest rates than new car loans, often 2-4% more, since older vehicles are considered higher risk by lenders.
Can I prepay my car loan early?
Most lenders allow prepayment or foreclosure after a lock-in period, though some charge a small prepayment penalty on fixed-rate loans. Check your loan agreement for exact terms.
What credit score do I need for a car loan?
Most banks prefer a CIBIL score of 700 or above for the best interest rates, though approval is sometimes possible with lower scores at a higher rate.