Car loan EMI calculator
What does a car actually cost once it is financed?
The on-road price if you are buying — the down payment below comes off it.
Cash up front. Dealers usually want 10–20%.
Past five years the car depreciates faster than the loan shrinks.
₹10,379per month
- You borrow
- ₹5,00,000
- Total interest
- ₹1,22,740
- The car ends up costing
- ₹6,22,740
- Interest as % of what you borrow
- 24.5%
- Down payment₹0 · 0%
- Principal₹5,00,000 · 80%
- Interest₹1,22,740 · 20%
| Year | Paid up front | Principal repaid | Interest paid | Still owed |
|---|---|---|---|---|
| 1 | ₹0 | ₹82,912 | ₹41,636 | ₹4,17,088 |
| 2 | ₹0 | ₹1,73,601 | ₹75,495 | ₹3,26,399 |
| 3 | ₹0 | ₹2,72,799 | ₹1,00,845 | ₹2,27,201 |
| 4 | ₹0 | ₹3,81,302 | ₹1,16,890 | ₹1,18,698 |
| 5 | ₹0 | ₹5,00,000 | ₹1,22,740 | ₹0 |
A car loan quote arrives as one number — the EMI — and that is the number people compare. It is the wrong one. The EMI tells you what the month costs; it says nothing about what the car costs. This page adds the interest back on top of the price, so the figure you end up looking at is the amount of money that will leave your household before the car is yours.
A worked example
A hatchback at an on-road price of ₹9,50,000. You put ₹1,50,000 down, the bank lends the rest at 9.5% for 5 years. Those are the four numbers to type above.
The calculator finances ₹8,00,000 — price less the down payment — and returns an EMI of ₹16,801 a month. Over the 60 months that is ₹2,08,060 of interest, or 26% of what you borrowed. Add the interest back to the price and the car costs ₹11,58,060.
Read the first row of the table: in year one, ₹70,382 of your payments went to interest and only ₹1,31,230 came off the principal. Twelve EMIs in, you have paid ₹2,01,612 and still owe ₹6,68,770 of an ₹8,00,000 loan. That front-loading is why prepaying in year one or two buys back far more than prepaying in year four.
Total interest on ₹8,00,000 at 9.5%, from this page's own calculator. Stretching 5 years to 7 saves ₹3,726 a month and costs ₹90,240 more in interest.
What this number does not include
The EMI is the loan. It is not the car.
The on-road price you type in already carries GST and cess, road tax, registration and the first year’s insurance — that is what makes it “on-road” rather than ex-showroom, and it is the right number to use here. What sits outside the calculation entirely is everything the lender and the years add:
Processing and documentation fees
Charged up front or added to the loan, plus stamp and hypothecation charges. None of it is in the EMI. Ask for the total, in rupees, in the sanction letter.
Foreclosure charges
Car loans are usually fixed-rate, and the RBI's ban on foreclosure charges covers floating-rate loans to individual borrowers — so a fixed-rate car loan can carry a penalty for closing early, often as a percentage of the outstanding. Check the clause before you plan a prepayment.
Flat rate quotes
This page charges interest on the reducing balance. A flat rate charges it on the original amount for the whole tenure. The same headline number is a much dearer loan.
The cost of keeping it
Insurance renewed every year, servicing, tyres, fuel, parking, the loan-bundled add-ons some dealers insist on. Over five years these can rival the interest.
Two more things the arithmetic cannot see. Depreciation — the loan shrinks on a schedule, the car’s value falls on its own curve, and the two do not track each other; your insurer settles a total loss at the insured declared value it agreed to, not at what you still owe. And on a floating-rate car loan a rate change usually leaves the EMI where it is and adds months to the tenure instead, so the total interest moves even though the monthly figure on your statement never does. Ask your lender which one it adjusts.
Where to go next
- Loan prepayment — what a lump sum into this loan removes: how many EMIs go, and how much interest with them.
- Personal loan EMI — if you are topping up the down payment with an unsecured loan, price that separately; it counts the processing fee.
- Lumpsum — the other side of a bigger down payment: what the same cash could have grown to if you had invested it instead.
Is the EMI on a ₹10 lakh car loan the same at every bank?
No. Two lenders quoting the same headline rate can still hand you different EMIs, because the rate is only part of the price — the tenure they push, the processing fee, and whether the quote is a reducing-balance rate or a flat one all move the real cost. Put each lender's own rate and tenure into the calculator above and compare the "car ends up costing" figure, not the monthly instalment.
How much down payment should I make on a car?
Dealers usually want 10–20% of the on-road price, and lenders rarely fund the full amount. Beyond that minimum, every rupee of down payment removes a rupee of borrowing, and the interest on it, so paying more up front always lowers the total cost of the car. The question is whether the cash has a better job elsewhere — an emergency fund first, then compare against what the money would earn if invested.
Is a 7-year car loan a bad idea?
It cuts the EMI and raises the total cost, and it adds a risk a shorter loan does not have: a car depreciates fastest in its early years, so on a long tenure you can spend a stretch owing the lender more than the car would fetch. If you have to sell or if it is written off in that window, the insurance settlement is based on the insured value, and the shortfall is yours to pay while the loan continues.
Why is the dealer's rate lower than the bank's but the loan costs more?
Usually because the two are not the same kind of rate. This calculator uses reducing balance, where interest is charged on what you still owe. A flat rate charges it on the original amount for the whole tenure, so a flat quote of, say, 6% costs close to double what a 6% reducing-balance loan costs. Ask the dealer which one the number is, and ask for the total amount payable in writing.
Can I claim tax deduction on car loan interest?
Not for a car bought for personal use — the interest is simply a cost. If the vehicle is used for your business or profession, the interest and depreciation can be claimed as business expenses. Section 80EEB of the Income-tax Act allowed a deduction on interest for electric vehicle loans, but only for loans sanctioned inside the window Parliament set, so check whether that window covers your loan before you count on it.
This page starts from typical figures. In Hundo the same calculator opens on your own — the loan, the deposit, the salary already on the ledger — and says where each number came from.