Car Loan EMI Calculator: EMI, Down Payment & Total Cost
Find your car loan EMI from the on-road price and down payment, and see how much the car really costs once interest is added.
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How Car Loan EMI Works
Car loans use the same reducing-balance EMI formula as other loans, but the amount you borrow is the on-road price minus your down payment. Most banks fund up to 80–90% of the on-road price for new cars.
EMI = P × r × (1 + r)ⁿ ÷ [(1 + r)ⁿ − 1]
Example: A ₹10 lakh car with ₹2 lakh down leaves an ₹8 lakh loan. At 9% for 5 years the EMI is ₹16,607 and total interest is ₹1,96,401.
Down Payment vs EMI
EMI on a ₹10 lakh car at 9%, 5 years:
| Down payment | Loan | EMI | Total interest |
|---|---|---|---|
| ₹1,00,000 | ₹9,00,000 | ₹18,683 | ₹2,20,951 |
| ₹2,00,000 | ₹8,00,000 | ₹16,607 | ₹1,96,401 |
| ₹3,00,000 | ₹7,00,000 | ₹14,531 | ₹1,71,851 |
| ₹4,00,000 | ₹6,00,000 | ₹12,455 | ₹1,47,301 |
The 20/4/10 Rule
A simple affordability check: put down at least 20%, keep the loan to 4 years or less, and keep the EMI plus fuel and insurance under 10% of your monthly income. Cars lose value quickly, so a long, low-EMI loan can leave you owing more than the car is worth.
Before You Sign
- Compare the on-road price (insurance, registration, TCS) — the loan is calculated on this, not the ex-showroom price.
- Ask for the processing fee and foreclosure charges in writing. Fixed-rate car loans often charge 2–5% for early closure.
- Dealer “0% interest” offers usually hide the cost in a higher price or a fee — compare the total amount you pay.
Popular Variations
Frequently Asked Questions
What is the EMI for a ₹5 lakh car loan for 5 years?
At 9% the EMI is about ₹10,379 a month, with about ₹1,22,751 in total interest.
Is a 7-year car loan a good idea?
It lowers the EMI but adds a lot of interest, and the car may be worth less than the balance for years. Keep tenure to 5 years or less where possible.
Can I prepay a car loan?
Yes, but fixed-rate car loans usually charge a foreclosure fee. Check whether part-prepayment is allowed and what it costs.
Is car loan interest tax-deductible?
Not for a personal car. Business owners and self-employed professionals using the car for business can claim interest and depreciation as business expenses.