What is a car loan EMI calculator?
A car loan EMI calculator works out the monthly instalment you will pay on a loan taken to buy a new or used car. Unlike a plain EMI calculator, this tool starts from what you actually know at the dealership: the on-road price and how much cash you can put down. It subtracts your down payment, calculates the loan amount, and then shows your EMI, the total interest, the processing fee and the true total cost of the car. It is free, works online on any phone, and needs no sign-up.
How to use the car loan EMI calculator with down payment
- Car type – choose new car or used (pre-owned) car. The tool warns you when your loan is higher than lenders usually fund for that type.
- On-road price – the ex-showroom price plus RTO registration, road tax, insurance, and extras such as FASTag or an extended warranty. Banks lend on the on-road or ex-showroom price, so check which one your lender uses.
- Down payment – the cash you pay upfront. Set it to zero to test a zero down payment offer.
- Interest rate – the yearly rate on the loan.
- Tenure – 1 to 8 years. The calculator converts it to months, so 5 years = 60 EMIs.
- Processing fee – a one-time charge, usually 0.25%–1% of the loan, plus 18% GST.
The result shows the monthly EMI, a principal-versus-interest split and a car loan EMI calculator with repayment schedule for every year.
How is car loan EMI calculated?
Banks and NBFCs in India calculate car loan EMI on a reducing balance. Each month interest is charged on the outstanding loan only, and the rest of the EMI pays down the principal. The formula to calculate EMI for a car loan is:
EMI = P × r × (1 + r)n ÷ ((1 + r)n − 1)
- P = car loan amount = on-road price − down payment
- r = monthly interest rate = yearly rate ÷ 12 ÷ 100
- n = tenure in months
How to calculate car loan EMI with example
You buy a new car with an on-road price of ₹10,00,000 and pay ₹2,00,000 as down payment. The car loan is ₹8,00,000 at 9% for 5 years. So r = 9 ÷ 12 ÷ 100 = 0.0075 and n = 60. EMI = 8,00,000 × 0.0075 × (1.0075)60 ÷ ((1.0075)60 − 1) = ₹16,607. Over 60 months you pay ₹9,96,401 in EMIs, of which ₹1,96,401 is interest. With a 0.5% processing fee plus GST (₹4,720) and your down payment, the total cost of the car comes to about ₹12,01,121.
What is the EMI per lakh for a car loan?
A quick way to compare offers is the EMI for every ₹1 lakh borrowed. At 9% the EMI per lakh is about ₹2,076 for 5 years, ₹1,609 for 7 years and ₹1,267 for 10 years. Multiply by the number of lakhs you borrow to estimate your EMI.
| Tenure | EMI on ₹8 lakh at 9% | Total interest |
|---|---|---|
| 3 years (36 months) | ₹25,440 | ₹1,15,832 |
| 5 years (60 months) | ₹16,607 | ₹1,96,401 |
| 7 years (84 months) | ₹12,871 | ₹2,81,186 |
A 7-year loan cuts the EMI by about ₹3,700 compared with 5 years, but you pay about ₹85,000 more in interest – on an asset that loses value every year.
New car loan vs used car loan
| New car loan | Used car loan | |
|---|---|---|
| Typical funding | Up to 90% of on-road price (some up to 100% of ex-showroom) | 60%–80% of the valuation |
| Interest rate | Lower | Usually 2–5 percentage points higher |
| Maximum tenure | Up to 7–8 years | Up to 5 years, limited by the car's age |
| Checks | Dealer invoice | Valuation, RC transfer, insurance transfer |
Switch the car type in the calculator to plan a pre-owned car loan. A bigger down payment matters more on a used car because lenders fund a smaller share and charge more interest.
Flat rate vs reducing balance car loan
Some dealers quote a flat rate, where interest is charged on the full loan for the whole tenure. A 5% flat rate sounds cheap, but it equals roughly a 9% reducing rate. Always ask for the reducing-balance rate (or APR) and put that into the calculator. If you only have a flat rate, the simple interest calculator shows the flat interest amount.
Fixed vs floating interest rate
Most car loans in India carry a fixed rate, so your EMI never changes. Some banks offer floating rates linked to an external benchmark. A floating rate can fall or rise with the repo rate; a fixed rate gives certainty for budgeting. Individual borrowers on floating-rate loans pay no prepayment penalty, while fixed-rate car loans often carry a foreclosure charge of 2–5%.
Can I increase or reduce my car loan EMI?
- Prepay part of the loan with a bonus – most lenders then cut the tenure or the EMI. Check the part-payment charge first.
- Pay a larger down payment – every ₹1 lakh less borrowed at 9% for 5 years saves about ₹2,076 a month.
- Improve your credit score – a score above 750 gets the lowest interest rate.
- Compare lenders – banks, NBFCs and carmaker finance arms quote very different rates and fees.
Is car loan EMI tax deductible?
For salaried people buying a car for personal use, car loan interest is not tax deductible. Self-employed people and businesses that use the car for work can claim the interest and depreciation as business expenses. Loans for electric vehicles had a separate deduction under Section 80EEB, but it applied only to loans sanctioned between 1 April 2019 and 31 March 2023.
Car loan EMI in Excel
To check the result in Excel or Google Sheets, use =PMT(9%/12, 60, -800000), which returns 16,607. Our online car EMI calculator does the same and also adds the down payment, processing fee and a year-wise schedule.
Planning to pay cash instead? Compare what the same money could earn with the compound interest calculator, or check a personal loan quote with the personal loan EMI calculator.
New car, used car or zero down payment: what to enter
- Month wise and year wise view – the calculator shows your car loan EMI each month, and the schedule adds it up year wise, so you get a full amortization table in one place.
- Principal and interest – see how each year's payments split between principal and interest. The calculator uses the reducing balance (reducing rate) method that lenders use for a car loan EMI.
- Tenure in months – you enter years and the calculator converts the car loan EMI tenure to months. For a car loan EMI over an odd term such as 39 months, use the loan calculator or the Excel formula with n = 39.
- 5, 7 or 10 years – on ₹8 lakh at 9%, the calculator gives a car loan EMI of ₹16,607 for 5 years and ₹12,871 for 7 years; 10 years (offered by few lenders) gives about ₹10,134.
- Car loan EMI calculator with zero down payment – set the down payment to ₹0 to see the full-funding EMI.
- Pre-owned car – choose "used car" for a pre-owned vehicle; used-car rates are usually higher.
- Free and online – nothing to install and no software download; the calculator runs in your browser.
Prepaying your car loan
To see the effect of a prepayment, extra payment or partial payment, take the balance from the schedule for the year you plan to prepay, subtract the amount, and enter the rest as a new loan in the calculator for the remaining tenure; the new car loan EMI is your answer. The loan calculator also accepts a fixed extra monthly payment.
Car loan EMI calculator quarterly or half yearly
Most car loans are repaid monthly, but some farmers and business owners take quarterly or half-yearly instalments. A car loan EMI calculator quarterly or car loan EMI calculator half yearly uses the same formula with r = yearly rate ÷ 4 (or ÷ 2) and n = number of quarters (or half-years).
Car loan EMI calculator floating vs fixed
A fixed EMI never changes. With a floating interest rate, the car loan EMI the calculator shows holds only until the rate resets. A flat rate charges simple interest on the full loan for the whole term, so run both quotes through the calculator and compare the car loan EMI at the flat vs reducing rate before you sign. To find the lowest interest rate, enter each lender's reducing rate in the calculator and compare the car loan EMI and total cost.
Vehicle loan EMI calculation formula
The vehicle loan EMI calculation formula is the same for cars, bikes and commercial vehicles, so this page doubles as a vehicle loan EMI calculator online and an auto loan EMI calculator online. How to calculate vehicle loan EMI: EMI = P × r × (1 + r)n ÷ ((1 + r)n − 1). How do I calculate my car loan payment? Subtract your down payment from the on-road price and use that as P. That is how to calculate car loan EMI in India and how emi is calculated on car loan at every bank.
What is car loan EMI rate?
Your car loan rate depends on your credit score, income, the car model and the lender; used car loans cost more than new. Check the current rate on your lender's website and enter it above. Can I reduce my car loan EMI after taking the loan? Yes – by prepaying or refinancing with another lender.
How much EMI for a car loan?
How much EMI you pay for a car loan comes down to about ₹2,076 a month for every ₹1 lakh borrowed at 9% over 5 years. So an ₹8 lakh car loan costs ₹16,607 a month for 5 years or ₹12,871 a month for 7 years. A common rule is to keep the car EMI under 10–15% of your take-home pay.
How to calculate EMI for a car loan with the calculator
- Take the on-road price and subtract your down payment to get the loan amount.
- Enter the interest rate from the lender's quote (reducing balance, not flat).
- Pick the tenure; the car loan EMI calculator shows the EMI, total interest and yearly schedule.
Car loan EMI calculator India: rates and rules
In India, banks usually fund up to 85–100% of the ex-showroom or on-road price for new cars, for 1–7 years. Floating-rate car loans to individuals carry no prepayment charge, while fixed-rate loans may charge 2–5% for foreclosure. Add the processing fee and 18% GST on it to the upfront cost.
Car loan EMI calculator for bank staff
Bank employees often get a staff car loan at a concessional rate, sometimes 1.5–2% below the public rate. Enter that lower rate here: an ₹8 lakh car loan for 5 years at 7.5% costs ₹16,030 a month instead of ₹16,607 at 9%.
Car loan EMI calculator in XLS (Excel)
To build a car loan EMI calculator in an XLS sheet, put the loan in B1, annual rate in B2 and years in B3, then use =PMT(B2/12, B3*12, -B1). For ₹8,00,000 at 9% for 5 years it returns ₹16,607, the same as this page.
Frequently asked questions
How is car loan EMI calculated?
Car loan EMI is calculated on the reducing balance with EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the on-road price minus your down payment, r is the monthly interest rate and n is the number of months.
What is the EMI for a 10 lakh car loan?
At 9% interest, a ₹10 lakh car loan costs about ₹20,758 a month for 5 years and about ₹16,089 for 7 years.
How much down payment should I make on a car?
Aim for at least 20% of the on-road price. It lowers your EMI, cuts total interest and keeps the loan below the car’s resale value.
Can I get a car loan with zero down payment?
Some lenders fund 100% of the ex-showroom price for customers with strong credit. You still pay registration and insurance, and the EMI and interest are higher.
Is a used car loan more expensive?
Yes. Used car loans usually carry a higher interest rate, shorter tenure and lower funding than new car loans.
What is the best tenure for a car loan?
Three to five years is sensible for most buyers. Longer tenures lower the EMI but add interest while the car loses value.
Can I prepay my car loan?
Yes. Floating-rate loans for individuals have no prepayment penalty; fixed-rate car loans may charge 2–5% of the prepaid amount.
How much EMI for a car loan of ₹8 lakh?
At 9% interest, the EMI on an ₹8 lakh car loan is about ₹16,607 for 5 years or ₹12,871 for 7 years.
Last updated 2026-09-18