Car Loan Details
Loan Amount
₹800,000
₹10K₹1Cr
Interest Rate
8.5% p.a.
5%36%
Loan Tenure
7 years
1 yr30 yrs
Monthly EMI
₹0
total interest: ₹0
Principal
₹0
Total Interest
₹0
Total Payment
₹0
Interest %
0%
A ₹10 lakh car at 8.5% for 7 years costs ₹15.7 lakhs total — ₹5.7 lakhs in interest alone. Know the full cost before you sign.
| Month | EMI (₹) | Principal (₹) | Interest (₹) | Balance (₹) |
|---|
A car loan EMI (Equated Monthly Instalment) is the fixed amount you pay every month to repay the loan principal plus interest. The formula used by all Indian banks and NBFCs is the same reducing balance method used for home loans.
Formula: EMI = P × R × (1+R)N / [(1+R)N - 1] where P is principal, R is monthly interest rate, and N is number of months.
If you buy a car priced at ₹10 lakhs with a ₹2 lakh down payment, your loan principal is ₹8 lakhs. At 9% annual interest over 5 years (60 months), your monthly interest rate R = 9/12/100 = 0.0075. Your EMI works out to ₹16,607/month and you pay ₹1,99,450 as total interest — meaning the actual cost of the car is ₹11,99,450.
New car loans from major banks typically range from 8.5% to 11% per annum. Used car loans carry higher rates — 13% to 18% — due to higher default risk and depreciating collateral. Banks like SBI, HDFC, ICICI and Axis offer new car loans starting at 8.7%, while NBFCs like Mahindra Finance specialize in used car financing at higher rates.
Your down payment percentage directly impacts EMI — putting down 30–40% instead of 20% reduces your principal and total interest significantly. Your credit score (CIBIL score above 750) qualifies you for the lowest rate. Loan tenure of 3 years costs less total interest than 7 years but has higher monthly EMI. Choosing a shorter tenure saves thousands in interest at the cost of higher monthly commitment.
Most Indian banks charge a processing fee of 0.5%–2% of the loan amount. Some waive it during festive offers. Always factor this into the true cost of borrowing. Pre-payment charges vary — some lenders allow unlimited pre-payment after 6 months with no penalty, while others charge 2–5% of the prepaid amount.
The most common questions we get about this calculator, answered in plain language without jargon. Understanding these answers will help you use the result in your actual financial decisions.
Results use the exact mathematical formulas prescribed by relevant Indian regulatory bodies — RBI for banking products, SEBI for market instruments, Income Tax Act for tax calculations, and EPFO for provident fund calculations. The calculated output matches what your bank or government portal would show for the same inputs. The caveat is that real-world outcomes depend on many factors not captured in a calculator — market returns vary, tax laws change, and personal circumstances differ.
Minor differences can arise from rounding methods and compounding frequency. Banks may use daily compounding for savings accounts, quarterly compounding for FD/RD (as per RBI mandate), and monthly reducing balance for EMI loans. This calculator uses the standard formula for each product type. If you see a significant difference, check the compounding frequency and whether the bank is including processing fees or insurance in the stated rate.
Use the output as a planning baseline, not a guarantee. For investment calculators, calculate at three return scenarios — conservative (8%), moderate (12%), and optimistic (15%) — and plan for the conservative case. For tax calculators, the result shows your liability before TDS credits. For loan calculators, the EMI shown is the mathematical minimum — your actual EMI may include insurance premium or processing fee EMI.
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