Estimate your monthly car loan EMI, total interest, and full amortization schedule.
Rates as of Q2 2025 (example)
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A car loan calculator estimates your monthly EMI (Equated Monthly Instalment), total interest payable, and total repayment for a new or used car loan in India. Enter the car price, down payment, trade-in value, interest rate, and tenure to instantly see how much a car loan will cost per month and in total. With over 4 million cars sold annually in India, car loans are one of the most common retail loan products, available from banks, NBFCs, and manufacturer-linked captive finance companies. This calculator helps you compare different loan structures before visiting a dealership or bank.
Car loan EMIs in India use the standard monthly reducing balance formula. As each EMI is paid, the outstanding principal reduces, and the interest component in each subsequent EMI decreases.
Formula: Loan = Car Price − Down Payment − Trade-in. EMI = [P × R × (1 + R)N] ÷ [(1 + R)N − 1], where R = monthly interest rate, N = total months.
Example: ₹10,00,000 car, ₹1,50,000 down payment, loan ₹8,50,000 at 9% per annum (example rate — enter your sanctioned rate), 5-year tenure: Monthly EMI ≈ ₹17,636.42. Total interest ≈ ₹2,08,184.68. Total repayment ≈ ₹10,58,184.68. (Note: on-road price can be 10-15% higher than the ex-showroom price due to taxes and charges.)
Car loans in India are offered by public sector banks (SBI Car Loan, Bank of Baroda Car Loan), private sector banks (HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank), NBFCs (Tata Capital, Mahindra Finance, HDB Financial Services), and manufacturer captive finance arms (Maruti Finance/Suzuki Finance, Toyota Financial Services, Hyundai Motor Finance). Car loan interest rates are generally linked to the EBLR (External Benchmark Lending Rate) or bank-specific floating rates. For new cars, rates typically range from 8.5% to 12% for borrowers with strong credit profiles (CIBIL 750+). Used car loans attract higher rates (10-17%) due to higher asset risk. LTV for new car loans is typically up to 90% of the on-road price per RBI guidelines. Car loan tenures range from 1 to 7 years, with 5 years being the most common. Two important RBI mandates affect car loans: (1) the Loan-to-Value ratio is capped at 90% for new cars; (2) floating rate car loans cannot have prepayment charges for individual borrowers. A CIBIL score of 700+ is required for most car loan approvals, with 750+ needed for the best rates. Manufacturer-linked finance companies frequently offer zero-interest EMI schemes during festive seasons — these typically require a higher down payment and include insurance bundles, so compare the total cost carefully.
Car loan interest rates in India typically range from 8.5% to 12% per annum for new cars from public and private sector banks, for borrowers with good CIBIL scores (700+). Major banks and their current indicative ranges: SBI Car Loan starts from approximately 8.75%; HDFC Bank from 8.85%; Axis Bank from 9.25%; ICICI Bank from 9.1%. Manufacturer captive finance companies may offer promotional rates (sometimes 0%) for specific models during festive periods. Used car loans attract higher rates (12-17%). Always compare total cost (EMI × tenure) across lenders, not just the headline rate.
Per RBI guidelines, the maximum LTV (Loan-to-Value ratio) for new car loans is up to 90% of the on-road price, meaning a minimum down payment of 10% is required. For used car loans, LTV is typically lower — 70-80% of the assessed value, requiring 20-30% down payment. Some lenders set lower internal LTV limits based on the car model, borrower profile, or loan amount. A higher down payment reduces the loan amount, the EMI, and the total interest cost over the loan tenure.
For floating rate car loans (linked to EBLR/Repo Rate) from banks, prepayment and foreclosure are free for individual borrowers per RBI guidelines. Fixed rate car loans from banks may have prepayment charges (typically 2-5% of the outstanding amount). Car loans from NBFCs (not covered by RBI's bank-specific rules) may have prepayment charges even for floating rate products — check the loan agreement. Prepayment reduces the outstanding principal, which either shortens the remaining tenure or reduces the EMI (depending on how your lender processes it). For small-amount car loans, the interest saving from prepayment may be modest.
A trade-in (exchange) is when you give your existing car to the dealership as part-payment for the new car. The assessed trade-in value is deducted from the new car's on-road price, reducing the loan amount required. For example, if your new car costs ₹10,00,000 and the dealer values your old car at ₹2,00,000, and you also pay a ₹1,00,000 cash down payment, the loan required is only ₹7,00,000. Enter the trade-in value in this calculator to see its impact on your EMI. Always get independent valuations from 2-3 dealers or aggregator platforms (Cars24, Spinny) to ensure a fair trade-in value.
For personal (non-business) car loans, there are no income tax deductions on EMI or interest in India. For business car loans (where the car is used for business purposes), the interest paid is deductible as a business expense under Section 37(1) of the Income Tax Act, reducing taxable profit. Additionally, if the car is registered as a business asset, depreciation (20% per year on the written-down value for cars) can be claimed as a deduction. Salaried employees cannot claim deductions for personal car loan interest. Electric vehicle loans taken before March 31, 2023, were eligible for an additional ₹1.5 lakh interest deduction under Section 80EEB — check if this section has been extended for the current financial year.
Missing a car loan EMI triggers: (1) penal interest (typically 2% per month on the overdue amount); (2) a negative entry on your CIBIL score (30 days overdue starts the delinquency cycle); and (3) the lender may issue a demand notice after 90 days of non-payment (NPA classification). For secured loans, the lender has the right to repossess the vehicle after a legal process in case of continued default. If you anticipate difficulty paying, contact your lender immediately — they may offer a temporary moratorium, EMI restructuring, or partial payment arrangement. Proactive communication prevents CIBIL damage and potential repossession.
Disclaimer: This calculator provides illustrative car loan EMI estimates only. Actual rates depend on the lender, your CIBIL score, loan amount, car model, and tenure. On-road price varies by state (road tax differs significantly). Always verify current rates and terms with your bank, NBFC, or manufacturer finance company before finalising your car loan. Tax benefit information is based on current Income Tax Act provisions and may change.