How to use the car loan EMI calculator
Enter the on-road price of the car: the ex-showroom price plus registration, insurance and any other charges you pay at purchase. Then enter your down payment, as a percentage of the price or in rupees. The calculator takes it off the price to get your loan amount. If you switch between % and ₹, the number you typed stays the same, so check it after switching.
Next enter the interest rate and the tenure in years. Half years work too: 2.5 years means 30 EMIs. The calculator assumes a fixed rate and equal monthly EMIs.
Worked example: ₹10 lakh car
Say the car costs ₹10,00,000 on-road and you put down 20% (₹2,00,000). You borrow ₹8,00,000 at 9% for 5 years. Your EMI is ₹16,607. Over 5 years you pay ₹9,96,401 in EMIs, of which ₹1,96,401 is interest.
So the car really costs you ₹11,96,401: the ₹2,00,000 down payment plus all EMIs. That is the on-road price plus the interest. The calculator shows this as Total cost.
Car loans use the reducing-balance method. Each month you pay interest only on what you still owe, and the rest of the EMI reduces the loan. The formula is EMI = P × i × (1 + i)n ÷ [(1 + i)n − 1], where P is the loan, i is the yearly rate ÷ 12 ÷ 100, and n is the number of months.
How much down payment should you make?
A bigger down payment means a smaller loan, a lower EMI and less interest. For the same ₹10,00,000 car at 9% over 5 years:
10% down (₹1,00,000): EMI ₹18,683, interest ₹2,20,951.
20% down (₹2,00,000): EMI ₹16,607, interest ₹1,96,401.
30% down (₹3,00,000): EMI ₹14,531, interest ₹1,71,851.
Many buyers put down 10–20% of the on-road price. Aim for at least 20% if you can, but do not empty your savings to do it. Keep an emergency fund, and remember a new car brings its own costs: fuel, servicing and insurance every year.
5 years or 7 years?
A longer tenure lowers the EMI, but you pay interest for longer. On the ₹8,00,000 loan at 9%, stretching from 5 to 7 years cuts the EMI from ₹16,607 to ₹12,871. But total interest rises from ₹1,96,401 to ₹2,81,186. A car also loses value every year, so on a long loan you can end up owing more than the car is worth. If the 5-year EMI is a stretch, consider a bigger down payment or a cheaper car first.
Reading the yearly breakdown
The table splits your repayments into loan years of 12 EMIs each. Each row shows the principal paid, the interest paid and what you still owe at the end of the year. In the example, year 1 pays off ₹1,32,664 of the loan and ₹66,616 in interest. By year 5, interest is down to ₹9,384 and nearly all of the EMI goes to the loan. This is why prepaying early saves the most interest.
Want calendar years instead? Tick Label by calendar year and choose the month and year of your first EMI. If your first EMI is in October 2026, the 2026 row has just 3 EMIs (₹49,820), and the last row, 2031, has the remaining 9. These are January–December years, not April–March financial years. Changing the start month only changes the labels, not the EMI.
Before you sign
Check that the quoted rate is a reducing-balance rate. Some dealers quote a flat rate, where interest is charged on the full loan for the whole tenure. A 9% flat rate on ₹8,00,000 for 5 years means ₹3,60,000 in interest, against ₹1,96,401 at 9% reducing. That is a much more expensive loan that sounds the same.
This calculator does not include processing fees, loan insurance, prepayment charges or the cost of running the car. Ask for these in writing and add them to your budget.
To see how a processing fee raises the real cost of a loan, try the personal loan EMI calculator. If you are saving up for a bigger down payment, the FD calculator shows how much your savings could grow in the meantime.