Car Loan EMI Calculator
Compute the monthly EMI, total interest, and total payment on a car loan.
- Principal
- ₹8.00L79%
- Total interest
- ₹2.08L21%
Year by year5 yrs
| Year | Principal paid | Interest paid | Balance left |
|---|---|---|---|
| Y1 | ₹1.31L | ₹70.38K | ₹6.69L |
| Y2 | ₹1.44L | ₹57.36K | ₹5.25L |
| Y3 | ₹1.59L | ₹43.04K | ₹3.66L |
| Y4 | ₹1.74L | ₹27.30K | ₹1.92L |
| Y5 | ₹1.92L | ₹10.00K | ₹0 |
Reducing-balance EMI at a constant 9.5% annual rate — interest is charged on the outstanding balance, which the chart shows declining to zero over the tenure.
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Independent · No commissions · No fund-house data — how the numbers are computed
How it works
This calculator computes the monthly EMI on a car loan from the loan amount, interest rate and tenure, using the reducing-balance method every bank uses. It starts from a typical car loan — ₹8 lakh at 9.5% over 5 years — and lets you adjust the rate between 5% and 16% and the tenure up to 8 years, showing the EMI, total interest and total payment.
Car loans sit between home and personal loans on rate: new-car loans from banks commonly fall in the 8.5–11% band, with used-car loans priced higher. Tenures run short — 3 to 7 years is standard — because a car depreciates; lenders rarely go beyond 8 years. At the defaults, the ₹8 lakh loan carries an EMI of about ₹16,800 and roughly ₹2.1 lakh of interest over 5 years.
Two cautions the math makes visible. A longer tenure lowers the EMI but raises total interest on an asset that is simultaneously losing value — it is possible to owe more than the car is worth mid-loan. And dealer-quoted "flat rates" are not comparable to bank reducing rates: a 7% flat rate costs more than a 12% reducing rate on the same loan.
EMI = P · r · (1+r)^n / ((1+r)^n − 1)P is the car loan amount, r the monthly rate (annual rate ÷ 12 ÷ 100), n the tenure in months. Interest accrues on the reducing outstanding balance, not the original principal.
Frequently asked questions
What is a typical car loan interest rate in India?
New-car loans from major banks typically price in the 8.5–11% per annum range on a reducing-balance basis, varying with the borrower's credit score, the lender and the car segment; used-car loans run several points higher, often 11–16%. This calculator defaults to 9.5% and lets you test 5–16%. Always confirm whether a quoted rate is reducing-balance or flat — the two are not comparable.
What EMI does an ₹8 lakh car loan cost?
At this calculator's defaults — ₹8 lakh at 9.5% per annum over 5 years, reducing balance — the EMI is about ₹16,800 a month, with roughly ₹2.1 lakh of total interest bringing the total payment near ₹10.1 lakh. Stretching the same loan to 7 years drops the EMI to about ₹13,100 but raises total interest to nearly ₹3 lakh.
How long can a car loan tenure be?
Car loan tenures typically run 3 to 7 years, with 8 years the practical ceiling most lenders offer — this calculator caps the slider there. Tenures stay short because a car depreciates quickly: on a long tenure the outstanding loan can exceed the car's resale value for years, and lenders limit that exposure. Shorter tenures also keep total interest on the depreciating asset contained.
Should I compare a dealer's flat rate with a bank's reducing rate?
Not directly — they measure different things. A flat rate charges interest on the full original loan amount for the whole tenure, while a reducing-balance rate charges only on what remains outstanding. On a 5-year loan, a flat rate produces roughly 1.8 times the interest of the same-numbered reducing rate, so a "7% flat" quote is costlier than "12% reducing". Convert both to reducing-balance terms before comparing.
Go further
Why early years barely repay anything, and what a flat rate hides.
The general-purpose version, for any loan amount, rate and tenure.
Put a dealer's flat-rate quote and a bank's reducing rate side by side.
The same reducing-balance math at home-loan scale.