Car Loan EMI Calculator
Calculate your car loan EMI instantly. Enter loan amount, interest rate, and tenure to get monthly installment, total interest, and complete payment breakdown.
Payment Breakdown
Monthly EMI
Your monthly car loan installment
Loan Summary
Interest Rate Impact
Car Loan Amortization Schedule: Year-by-Year Payment Breakdown
See how your EMI payments are split between principal and interest over the loan tenure:
| Year | Opening Balance | EMI Paid | Principal Paid | Interest Paid | Closing Balance |
|---|
Car Loan Interest Rate Comparison: Major Banks in India
| Bank | Interest Rate | Max Tenure | Processing Fee |
|---|---|---|---|
| SBI | 8.50% - 9.85% | 7 years | 0.40% of loan |
| HDFC Bank | 8.75% - 10.50% | 7 years | Up to ₹6,500 |
| ICICI Bank | 8.80% - 11.25% | 7 years | 0.50% of loan |
| Axis Bank | 9.00% - 11.00% | 5 years | ₹4,500 - ₹9,000 |
| Bank of Baroda | 8.60% - 10.40% | 7 years | 0.50% of loan |
Note: Interest rates vary based on loan amount, tenure, credit score, and bank policies. Verify current rates with respective banks. Rates as of December 2025.
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Car Loan EMI Calculation: Formula, Factors, and Money-Saving Strategies
A car loan EMI calculator determines your monthly installment based on three key variables - the loan principal, interest rate, and repayment tenure. When financing a vehicle purchase, understanding your exact EMI helps you budget effectively and compare offers from different lenders. In India, car loans typically range from 1 to 7 years with interest rates between 8% and 12% depending on your credit profile. Most banks finance up to 90% of the on-road price for new cars and 70-80% for used vehicles.
EMI Formula: The Mathematics Behind Monthly Installments
The car loan EMI follows the standard reducing balance method. The formula is: EMI = [P × R × (1+R)^N] / [(1+R)^N - 1] where P is the principal loan amount, R is the monthly interest rate (annual rate divided by 12 divided by 100), and N is the tenure in months. For a ₹5 lakh loan at 9.5% for 5 years: R = 9.5/12/100 = 0.00792, N = 60 months, giving EMI = ₹10,583. The first few EMIs contain more interest, while later payments reduce the principal faster - this is visible in the amortization schedule above.
What Factors Affect Your Car Loan EMI Amount?
Your car loan EMI depends on multiple factors beyond just the loan amount. Interest rates vary based on your CIBIL score - scores above 750 typically get the lowest rates while scores below 650 may face rejection or higher rates. The car type matters too - new cars get better rates than used vehicles, and electric vehicles often qualify for green financing with preferential rates. Down payment percentage affects both EMI and total interest - a 20% down payment reduces your EMI significantly compared to minimum down payment options. Finally, choosing between fixed and floating rates impacts EMI stability over the loan tenure.
How Does Loan Tenure Impact Total Interest Paid?
Longer tenure means lower EMI but significantly higher total interest. For a ₹5 lakh car loan at 9.5%: a 3-year tenure gives EMI of ₹16,007 with total interest of ₹76,252, while a 7-year tenure gives EMI of ₹7,867 with total interest of ₹1,60,828. That's more than double the interest! Choose tenure based on affordability - your car EMI shouldn't exceed 15-20% of your monthly income. If possible, opt for shorter tenure and make additional principal payments when you have surplus funds. Use our EMI calculator to compare different scenarios.
New Car vs Used Car Loan: Key Differences
New car loans typically offer lower interest rates (8-10%) compared to used car loans (12-18%) because new cars serve as better collateral. Banks also finance a higher percentage of new car value - up to 100% of ex-showroom price for prime customers versus 60-80% for used cars. Used car loan tenure is usually capped at 5 years or until the car reaches 10-12 years of age, whichever is earlier. However, used cars have lower total ownership cost if you secure a good deal. For loan options, check our auto loan calculator for detailed comparisons.
Prepayment and Foreclosure: Reducing Your Car Loan Burden
Most banks allow prepayment of car loans with or without penalty. Prepaying early in the loan tenure saves more interest since early EMIs contain higher interest components. If you receive a bonus, tax refund, or windfall, consider making a lump sum prepayment to reduce principal. Some banks charge 2-5% foreclosure penalty, while others waive it after 12 months. Always compare prepayment benefits against penalty costs. For personal loan alternatives, see our personal loan calculator - though car loans typically have lower rates than unsecured personal loans.
Last Updated: January 2026 | Reviewed for accuracy