Car Loan EMI Calculator
Calculate your car loan EMI with on-road price, down payment, and total cost of ownership.
Popular cars
Approx. mid-variant on-road prices (2026-27). Actual prices vary by city and variant.
Loan amount: ₹9.60 L
Monthly EMI
₹19,928
Loan Amount
₹9.60 L
Total Interest
₹2.36 L
Total Payment
₹11.96 L
Down Payment
₹2.40 L
Total cost of ownership (financing)
On-Road Price
₹12 L
Interest Paid
₹2.36 L
Total Cash Out
₹14.36 L
Car Loan EMI by Popular Car Model
About the Car Loan EMI Calculator
A car loan EMI calculator does more than compute a monthly number - it reveals the true cost of driving a car on credit. Most buyers negotiate hard on the ex-showroom price but forget that the actual financeable amount is the on-road price, which is 10-18% higher after adding RTO registration (7-12% of ex-showroom), comprehensive insurance (2-4%), accessories, and TCS. On a 15 lakh ex-showroom car, the on-road price can easily cross 18 lakh - and that is the number your bank finances.
The down payment decision is one of the most impactful financial choices in a car purchase. Putting 20% down versus 10% down on an 18 lakh car reduces your loan by 1.8 lakh. At 9% for 5 years, that 1.8 lakh difference saves over 45,000 in interest alone. Beyond interest, a higher down payment also prevents 'negative equity' - the situation where you owe more on the loan than the car is worth, which happens quickly given India's steep first-year depreciation of 15-20%.
Tenure choice is equally important. A 7-year tenure has the lowest EMI but costs 40-50% more in total interest compared to a 3-year tenure. Given that cars depreciate to 50-60% of their value in 3 years, a longer loan means you are paying interest on an asset that has already lost most of its value. This calculator shows you the total cost of ownership so you can compare options before you commit.
Car Loan EMI Formula
EMI = P x r x (1 + r)^n / ((1 + r)^n - 1)
P = Loan amount (on-road price minus down payment) | r = Monthly interest rate (annual rate / 12 / 100) | n = Loan tenure in months | Total interest = (EMI x n) - P
Worked Example
Maruti Swift: On-road price 10 lakh, 20% down (2 lakh), loan 8 lakh at 9% for 5 years
EMI: 16,607 | Total paid: 9,96,420 | Total interest: 1,96,420 | Total cost of car: 11,96,420 (loan repayment + down payment)
Tips & Insights
- 1
Always calculate EMI on the on-road price, not the ex-showroom price. RTO, insurance, and accessories add 10-18% - on a 15 lakh car that is 1.5-2.7 lakh extra.
- 2
A higher down payment saves on interest and prevents negative equity. Going from 10% to 25% down on a 15 lakh car saves roughly 60,000-70,000 in total interest over 5 years.
- 3
Compare rates from your bank before visiting the dealership. Dealer-arranged loans are often 0.5-1% higher than direct bank or NBFC rates, which adds up over a 5-year tenure.
- 4
Cars depreciate 15-20% in year 1 and 10-15% each subsequent year. If you finance 90% of the on-road price, you will owe more than the car is worth for at least the first 2-3 years.
- 5
Comprehensive insurance for a new car costs 25,000-60,000 in year 1 depending on the car's IDV. Factor this into your total cost of ownership alongside the EMI.
- 6
If you plan to sell or exchange the car within 3-4 years, choose the shortest tenure you can afford - it builds equity faster and leaves you less underwater at trade-in.
- 7
Prepaying a car loan in years 1-2 gives the maximum interest saving since outstanding principal is highest. Check the foreclosure fee (typically 1-3%) and compare it to projected interest savings.
- 8
The 7-year tenure looks attractive (lowest EMI) but you pay 40-50% more in total interest versus a 3-year tenure. The car will also need major maintenance by year 6-7, adding to total cost.
Why this matters for you
The true cost of a car is not what you pay at the showroom - it is the on-road price plus every rupee of interest over the loan tenure, plus insurance, maintenance, and fuel. For a 15 lakh car financed at 85% at 9% for 7 years, the total cash outflow over 7 years - loan repayment plus down payment plus insurance - can exceed 22-23 lakh. This calculator makes that total visible before you sign.
India's car market has shifted dramatically toward financing. Over 75% of new cars are now bought on loan, with average ticket sizes rising above 10 lakh. Yet most buyers negotiate on ex-showroom price while ignoring the interest cost, which for a 7-year loan at 9% is roughly 40% of the loan amount - effectively paying for the car 1.4 times. Seeing the total cost upfront changes how buyers think about model choice, tenure, and down payment.
The down payment versus investment trade-off is real: instead of putting 3 lakh down, some buyers prefer to invest it and take a higher loan. At 9% car loan rate, you need your investment to return over 9% after tax to come out ahead. That is possible with equity mutual funds over long periods but not guaranteed. For most buyers, a larger down payment is the risk-free, guaranteed-return choice.
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Frequently Asked Questions
How is car loan EMI different from home loan EMI?+
Car loan EMI is calculated the same way (P x r x (1+r)^n / ((1+r)^n - 1)) but car loans have shorter tenure (1-7 years) and higher interest rates (8-14%) compared to home loans (7-10%, 15-30 years). Car loans are unsecured - no property is mortgaged - which is why the bank charges a higher rate to compensate for the risk. Additionally, cars depreciate sharply (15-20% in year 1) while homes typically appreciate, making the long-term financial logic of car financing very different from home financing.
How much down payment should I make on a car loan?+
RBI mandates a minimum 15-25% LTV margin for car loans, meaning banks finance at most 75-85% of the on-road price. Practically, a 20-25% down payment is the market standard. A larger down payment (30%+) meaningfully reduces both your EMI and total interest. More importantly, it prevents 'negative equity' - the situation where your outstanding loan balance exceeds the car's current market value, which happens within months at 90% financing given India's steep first-year depreciation. Aim for at least 20-25% down unless cash flow is genuinely tight.
What is the on-road price of a car and why does it matter for EMI?+
On-road price is what you actually pay to drive the car home: ex-showroom price + RTO registration charges (7-12% of ex-showroom, varies by state) + comprehensive insurance (2-4%) + accessories + TCS (1% on cars priced above ₹10 lakh ex-showroom). For a 15 lakh ex-showroom car, the on-road price in a metro city can easily reach 17.5-18.5 lakh. Banks calculate your loan on the on-road price, not the ex-showroom price, so always enter the full on-road cost in this calculator.
Should I choose a shorter or longer car loan tenure?+
Car loans range from 12 to 84 months. A 3-year tenure costs 30-40% less in total interest versus a 7-year tenure - on a 10 lakh loan at 9%, that is a difference of roughly 80,000-90,000. However, the EMI is proportionally higher. For a car that depreciates 20% in year 1 and 10-15% in subsequent years, a very long tenure means you owe more than the car is worth (negative equity) for the first several years. The practical advice: choose the shortest tenure where the EMI stays below 10-15% of your monthly take-home pay.
Can I prepay or foreclose a car loan early?+
Yes, most banks and NBFCs allow full or partial prepayment after 6-12 months. Foreclosure fees vary: public sector banks often charge 0-1%, while private banks and NBFCs typically charge 1-3% of the outstanding balance. The math is simple - compare the foreclosure fee to the interest you would save by closing early. If you have a bonus or windfall, prepaying in year 1 or 2 saves the most because the outstanding principal is highest. After year 4-5, the interest component of each EMI is small and foreclosure makes less financial difference.
Is it better to take a car loan from a bank or from the car dealer?+
Dealer-arranged financing (from their in-house NBFC or partner banks) is often priced 0.5-1% higher than going directly to your own bank or credit union. Dealers earn a commission on loans, creating a conflict of interest. That said, dealers sometimes run subsidised rate schemes (0% or 1% for select models at launch) that are genuinely good deals - read the fine print carefully, as these often include a higher processing fee, mandatory insurance purchase, or accessory bundle. Best approach: get a pre-approval letter from your bank before visiting the showroom, then compare with what the dealer offers.
What are the hidden costs of a car loan that increase total cost of ownership?+
Total cost of car loan ownership extends well beyond the EMI. Key hidden or overlooked costs: Processing fee: 0.25 to 1% of loan amount, paid upfront (Rs. 1,000 to Rs. 10,000 on a Rs. 10 lakh loan). Comprehensive insurance is mandatory for financed cars and typically costs Rs. 15,000 to Rs. 50,000 in year 1 for new cars, declining each year. Vehicle registration and RTO charges: 7 to 12% of ex-showroom price depending on state. Accessories and extended warranty often added at dealership: Rs. 30,000 to Rs. 1,00,000 for packages pushed during booking. Annual road tax: included in registration for most states but is a one-time cost. Depreciation is the largest implicit cost - a Rs. 10 lakh car loses approximately Rs. 2 lakh in resale value in year 1 (20% depreciation). When you total EMI interest + processing fees + insurance + depreciation, the true cost of owning a car on loan for 5 years often exceeds the car's ex-showroom price.