Car Loan EMI Calculator
See the real cost of financing a car — your monthly EMI, total interest, and how depreciation, a bigger down payment, prepayment or a shorter tenure change the picture.
Plan your car loan
You pay ₹1.80 L upfront; a bigger down payment cuts EMI and interest.
Shorter tenure = higher EMI but far less interest.
Results update live — calculations run in your browser, no signup.
₹16.7K
With 15% down you borrow ₹10.20 L at 9.50% — and repay 1.37× that over 7 years (84 EMIs)
₹3.80 L of pure interest on a depreciating asset — 37% of what you borrowed. A bigger down payment or shorter tenure shrinks it.
Reducing-balance EMI on principal and interest only — processing fees, insurance and accessories are extra. Illustrative; confirm the exact rate and charges with your lender.
Every EMI splits between principal and interest — of the ₹14.00 L you repay in all, 27% is interest.
Where every ₹100 of EMI goes
As the balance falls, more goes to principal each year.
- Interest
- Principal
Year-by-year amortization
How each year's EMIs split between principal and interest, and the balance still owed.
| Year | Principal paid | Interest paid | Balance |
|---|---|---|---|
| Year 1 | ₹1.08 L | ₹92,288 | ₹9.12 L |
| Year 2 | ₹1.18 L | ₹81,593 | ₹7.94 L |
| Year 3 | ₹1.30 L | ₹69,836 | ₹6.64 L |
| Year 4 | ₹1.43 L | ₹56,913 | ₹5.20 L |
| Year 5 | ₹1.57 L | ₹42,707 | ₹3.63 L |
Year 2
₹7.94L
Year 4
₹5.20L
Year 5
₹3.63L
Year 7
₹0
Paydown milestones
25% of the car paid off
around 2y 3m in
50% of the car paid off
around 4y 1m in
75% of the car paid off
around 5y 8m in
Principal overtakes interest
from month 1 (1 mo)
A car depreciates fastest early on. Where you owe more than it's worth, you're "underwater".
New cars typically lose ~15% a year (more in year 1).
Car value at year 7
₹3.85 L
Lost to depreciation
₹8.15 L
Your 15% down payment keeps you above water from day one — the car is worth more than you owe throughout.
Prepay and save
Pay a little extra every month and watch the interest — and the timeline — shrink.
Add an extra ₹2,000–₹10,000 a month above the ₹16,671EMI to see how much interest you'd save and how many months you'd cut from the loan.
Compare loan tenures
The same ₹10.20 L loan at 9.50% over different tenures.
| Tenure | EMI | Total interest | Total cost |
|---|---|---|---|
| 3 years | ₹32.7K | ₹1.56 L | ₹11.76 L |
| 5 years | ₹21.4K | ₹2.65 L | ₹12.85 L |
| 7 yearsyours | ₹16.7K | ₹3.80 L | ₹14.00 L |
| 8 years | ₹15.2K | ₹4.40 L | ₹14.60 L |
Stretching 3y → 8y saves ₹17,465/mo on the EMI
…but costs ₹2.84 L more in interest over the loan. On a car, the shorter tenure is usually wiser.
Car price vs total cost of ownership
The sticker price plus the interest you finance is what the car really costs you.
Car price
₹12.00 L
on-road
Down payment
₹1.80 L
15% upfront
Loan repaid
₹14.00 L
incl. ₹3.80 L interest
Total ownership
₹15.80 L
down + loan repaid
All in, this ₹12.00 L car costs you ₹15.80 L to finance — ₹3.80 L more than the sticker, entirely interest. A bigger down payment or a shorter tenure shrinks it.
- EMI is 17% of your income — comfortable.
- Interest burden is moderate — 37% of the loan.
- Above water from day one — the car stays worth more than you owe.
Can you afford this EMI?
EMI as a share of your net monthly income.
Under ~25% of income for a single car EMI — comfortably carried alongside your other spending.
What this means
On a ₹12.00 L car with 15% down, you borrow ₹10.20 L and repay ₹14.00 L over 7 years — of which ₹3.80 L is interest, about 37% of the loan. Interest burden is moderate. Because the car loses value as you pay, a bigger down payment or a shorter tenure keeps both the interest and the underwater risk down.
Key takeaways
- Monthly EMI: ₹16,671
- Down payment: ₹1.80 L (15%)
- Loan amount: ₹10.20 L
- Total interest: ₹3.80 L (37% of loan)
- Total payment: ₹14.00 L over 7 years
Compare loan offers in minutes
Check your eligibility across lenders online — quick and paperless. Loan Hub, at no extra cost to you.
Your plan: ₹10.20 L over 7 years → about ₹16.7K/month.
Plan the rest of your car purchase
Sort the down payment, check what you can borrow, and see what prepaying saves.
A car is a depreciating asset — it loses value the moment you drive it out, and most of the drop happens in the first few years. A long tenure with a small down payment can leave you underwater, owing more than the car is worth. The depreciation figures use a simple declining-balance estimate and your actual resale value will vary by make, model and condition. EMI is computed on principal and interest only; processing fees, insurance and accessories are extra and not modelled here.
How the car loan EMI is calculated
EMI = P × i × (1 + i)ⁿ ÷ [ (1 + i)ⁿ − 1 ]
- P
- loan amount = on-road price − down payment
- i
- monthly rate = annual rate ÷ 12 ÷ 100
- n
- number of months = years × 12
Worked example
With your inputs — a ₹10.20 L loan at 9.50% p.a. over 7 years: the monthly rate is i = 0.7917% and n = 7 × 12 = 84 instalments. That gives an EMI of about ₹16,671, so you repay ₹14.00 L in all — of which ₹3.80 L is interest. This is the standard reducing-balance method (interest on the outstanding balance each month); it's an estimate covering principal and interest only — processing fees and insurance are extra.
Most asked car loan questions
EMI is computed on the loan amount — the on-road price minus your down payment — using the standard reducing-balance formula. Interest is charged on the outstanding balance, so early EMIs are interest-heavy and later ones chip away faster at the principal. It's the same math as any other loan; there's no car-specific twist.
Most lenders fund 80–90% of the on-road price, so a 10–20% down payment is typical. A larger down payment lowers both your EMI and the total interest, and — because a car depreciates fast — it also keeps you from owing more than the car is worth in the early years. Don't drain your emergency fund to do it, though.
A longer tenure means a smaller EMI but much more total interest, and you stay in debt on a falling asset for longer. A shorter tenure costs more each month but far less overall and clears the loan while the car still holds value. For a depreciating asset like a car, shorter is usually the wiser default if the EMI is affordable.
Yes. Because interest accrues on the outstanding balance, paying a little extra each month — or a one-time lump sum — directly reduces the balance, which cuts every future interest charge and finishes the loan early. The 'Prepay and save' section above shows exactly how much interest you'd save and how many months you'd shave off.
You're underwater (or have negative equity) when you owe more on the loan than the car is currently worth. Because a car loses value fastest in its first couple of years while your loan balance falls slowly, a long tenure with a small down payment can leave you underwater for years — risky if the car is totalled or you need to sell. The depreciation section above shows when your equity turns positive.
No. This models only principal and interest. Real car loans often add processing fees, and insurance plus accessories are usually paid separately or bundled into the on-road price you enter. Treat the result as the core financing cost and confirm the extras with your lender.
The complete guide to car loans
How a car loan EMI works
A car loan lets you spread the cost of a vehicle over several years, paying a fixed EMI each month. The EMI covers both principal and interest, with interest charged on the outstanding balance — so early payments are interest-heavy and later ones chip away faster at the principal. Most lenders finance 80–90% of the on-road price, leaving the rest as your down payment.
Why a car is different from a home
Unlike a home, a car loses value over time — often sharply in the first few years. Financing a depreciating asset for a long tenure means you can end up "underwater", owing more than the car is worth, especially with a small down payment. Keeping the tenure short and the down payment healthy avoids paying interest on a falling asset for longer than you need, and keeps your equity ahead of the depreciation curve.
Down payment and tenure are the two big levers
A larger down payment shrinks the loan, so both the EMI and the total interest fall. A shorter tenure raises the EMI but cuts total interest dramatically, because the balance — and the interest charged on it — is cleared faster. The trade-off is monthly affordability: pick the shortest tenure whose EMI you can comfortably carry alongside your other commitments, ideally under a quarter of your income.
Prepaying saves real money
Because interest accrues on the outstanding balance, any extra you pay — a few thousand each month or a one-time lump sum — goes straight at the principal and removes all the future interest that balance would have generated. The "Prepay and save" section above shows your exact interest saved and how many months you'd cut. Check whether your lender charges a foreclosure or part-payment fee on a fixed-rate car loan before you commit.
What this calculator does and doesn't include
This models only principal and interest using the standard reducing-balance formula — the same engine as the generic EMI tool. Processing fees, documentation charges, insurance and accessories are extra and often bundled into the on-road price or paid separately. The depreciation curve is a simple declining-balance estimate for context, not a resale quote.
Will I actually get the rate I enter?
Not necessarily. Your quoted rate depends on your credit score, the lender, the tenure, and whether the car is new or used. The rates here are illustrative — treat the result as an estimate and confirm the exact rate and all charges with your lender before booking.