About this calculator
Car loans in India are usually priced between 8.5% and 11.5% for salaried borrowers, and the tenure rarely exceeds seven years. Because a vehicle depreciates quickly, lenders normally finance 80–90% of the on-road price and expect the rest as down payment.
A useful way to use this calculator: enter the on-road price minus your down payment as the loan amount, then compare tenures. A 5-year loan usually keeps the EMI comfortable while avoiding the deeper depreciation trap of a 7-year term.
How to use it
- Enter the amount you plan to borrow — not the asset price, unless you are financing the whole thing.
- Set the annual interest rate your lender has quoted, and the tenure in months.
- Read the monthly EMI, then check the amortisation table to see how much of it is interest in year one.
How the EMI is worked out
The calculator uses the standard reducing-balance formula used by every bank in India:
EMI = [P × r × (1 + r)n] ÷ [(1 + r)n − 1]
where P is the principal, r is the monthly rate (annual rate ÷ 12 ÷ 100) and n is the tenure in months. In Excel the same answer comes from =PMT(rate/12, months, -amount).
What decides your interest rate
- Down payment size: 20% or more usually earns a better rate and lower EMI.
- New versus used vehicle: used-car loans cost 1–3% more.
- Tenure: longer tenures mean a lower EMI but more total interest and a longer period of negative equity.
- Insurance and add-ons bundled into the loan raise the financed amount.
- On-time repayment of earlier auto loans improves your pricing.
Indicative interest rates
Indicative ranges compiled 28 October 2026. Rates change with the repo rate and your credit profile — always confirm with the lender before deciding.
| Lender | Indicative rate | Typical tenure |
|---|---|---|
| SBI | 8.75% – 10.35% | Up to 7 years |
| HDFC Bank | 9.00% – 11.00% | Up to 7 years |
| ICICI Bank | 9.10% – 11.25% | Up to 7 years |
| Axis Bank | 9.25% – 12.00% | Up to 7 years |
| Used car loans | 11.00% – 16.00% | Up to 5 years |
What an extra ₹2,000 a month would do
Same loan, same rate, one extra payment every month. This is the cheapest way to cut the total cost of any loan.
| Scenario | Monthly payment | Loan closes in | Total interest |
|---|
Floating-rate home loans to individuals carry no prepayment penalty in India. Personal and car loans often charge 2–5% of the outstanding amount — check before you prepay.
Year-wise amortisation schedule
How the loan actually unwinds: the interest share falls every year while the principal share rises.
Show the year-by-year break-up
| Year | Principal paid | Interest paid | Balance left |
|---|
Frequently asked questions
How much down payment should I make on a car loan?
At least 20% of the on-road price. Below that you risk owing more than the car is worth within the first two years, which becomes a problem if you need to sell.
Is a 7-year car loan a good idea?
It lowers the EMI but you pay interest for longer on an asset that is losing value every month. A 5-year term is usually the better balance for a new car.
Does the car loan cover insurance and registration?
Some lenders finance the insurance and accessories along with the ex-showroom price, which raises the loan and the EMI. Ask for the break-up before agreeing.
Can I transfer a car loan to another bank?
Yes, a balance transfer is possible, usually after 12 EMIs. It makes sense only if the new rate is at least 0.5–1% lower and the processing fee is small.
What happens to the EMI if I prepay?
Prepayment reduces the outstanding principal, so you can choose a lower EMI or a shorter tenure. Most lenders charge 2–5% on car loan foreclosure.
Is it cheaper to take a car loan or a personal loan?
A car loan is almost always cheaper because it is secured by the vehicle. Use a personal loan only for a small top-up where the paperwork is not worth it.
Related calculators
Before you apply
Get the sanction letter and check three things: whether the rate is fixed or floating, what the processing fee is, and whether part-prepayment carries a charge. Those three lines decide the real cost of the loan, more than the headline rate does.
This page is updated when rate ranges change. Last verified 28 October 2026.