EMI Calculator For Car Loan
Calculate your monthly car loan EMI in seconds. Compare bank rates, view full amortization schedule & plan your car purchase smartly.
🚗 Enter Loan Details
Amortization Schedule
| Period | EMI (₹) | Principal (₹) | Interest (₹) | Balance (₹) |
|---|---|---|---|---|
| Enter details and click Calculate to view schedule | ||||
Car Loan Interest Rates – Top Indian Banks 2026
Compare current car loan interest rates from leading Indian banks and NBFCs. Click to use any bank's rate directly in the calculator above.
| Bank / NBFC | Interest Rate (p.a.) | Max Tenure | Max Financing | Processing Fee | Apply |
|---|---|---|---|---|---|
| 🏦 SBI (State Bank of India) | 9.00% – 9.70% | 7 years | Up to 90% | ₹0 – ₹5,000 | Use Rate ↗ |
| 🏦 HDFC Bank | 9.25% – 12.50% | 7 years | Up to 100%* | Up to 0.5% | Use Rate ↗ |
| 🏦 ICICI Bank | 9.10% – 11.75% | 7 years | Up to 90% | Up to 1% | Use Rate ↗ |
| 🏦 Axis Bank | 9.15% – 13.50% | 7 years | Up to 90% | Up to 1% | Use Rate ↗ |
| 🏦 Bank of Baroda | 8.70% – 10.70% | 7 years | Up to 90% | ₹0 (limited offer) | Use Rate ↗ |
| 🏦 Kotak Mahindra Bank | 10.49% – 14.50% | 5 years | Up to 90% | Up to 2% | Use Rate ↗ |
| 🏦 Punjab National Bank | 8.75% – 9.85% | 7 years | Up to 90% | Up to 0.5% | Use Rate ↗ |
| 💳 Mahindra Finance | 11.50% – 15.00% | 5 years | Up to 85% | Up to 2% | Use Rate ↗ |
* Rates are indicative and subject to change. Always verify directly with the bank before applying. *100% financing subject to income & credit profile.
How to Use This Car Loan EMI Calculator
📋 Step-by-Step Guide
- Enter Car Price: Put the on-road price of the car you want to buy.
- Set Down Payment: Enter the amount you'll pay upfront (typically 10–20%).
- Enter Interest Rate: Use the bank's rate from the comparison table above.
- Choose Tenure: Select the repayment period from 1 to 7 years.
- Click Calculate: Instantly see your EMI, total interest, and full schedule.
📐 Car Loan EMI Formula
Car Loan EMI is calculated using the standard reducing balance formula used by all RBI-regulated banks in India:
P = Principal (Loan Amount)
R = Monthly Interest Rate
= Annual Rate ÷ 12 ÷ 100
N = Tenure in Months
Example: ₹6,40,000 loan at 9% for 5 years
R = 9÷12÷100 = 0.0075 | N = 60 months
EMI ≈ ₹12,942 per month
Complete Car Loan Guide for India 2026
🏦 New Car Loan – Key Features
- Finance up to 80–100% of on-road price depending on lender
- Loan tenure up to 7 years (84 months)
- Interest rates start from 8.70% p.a. for salaried individuals
- Minimum CIBIL score: 700+ recommended for best rates
- Faster approval: pre-approved offers for existing bank customers
- Car hypothecated to lender until full repayment
🚙 Used Car Loan – What's Different?
- Slightly higher interest rates than new car loans (typically 10–18% p.a.)
- Finance up to 70–85% of market/assessed value
- Maximum car age restriction: usually 7–10 years old
- Shorter maximum tenure: typically 5 years
- Vehicle valuation report may be required from bank's approved agency
- RC transfer and insurance must be in buyer's name before disbursement
⚡ EV Car Loan – Special Benefits
- SBI Green Car Loan from 8.70% p.a. (25 bps lower than regular)
- Income Tax benefit under Section 80EEB – up to ₹1.5 lakh interest deduction
- State government subsidies under FAME-II scheme
- Longer tenure of up to 8 years with some lenders
- Finance up to 100% with select banks on-road
- Lower running cost offsets higher upfront EMI significantly
📄 Documents Required for Car Loan
- KYC: Aadhaar Card, PAN Card
- Address Proof: Utility bill, rent agreement, Voter ID
- Income Proof (Salaried): Salary slips (3 months) + Form 16
- Income Proof (Self-Employed): ITR of 2 years + P&L statement
- Bank Statements: Last 6 months
- Vehicle Documents: Proforma Invoice from dealer
- Employment Proof: Offer letter or Employee ID
5 Smart Tips to Reduce Your Car Loan EMI
Pay Higher Down Payment
Even 5% extra down payment reduces your loan principal significantly. On a ₹10L car, paying ₹2.5L instead of ₹2L saves ₹8,000+ in total interest over 5 years.
Improve Your CIBIL Score
A CIBIL score of 750+ can get you 0.5–1% lower interest rate. On ₹7L for 7 years, that's a saving of over ₹26,000 in total interest payments.
Compare Banks Before Applying
Never accept the first offer. Use the bank rate table above and our calculator to compare all options. Even 0.25% difference matters on large amounts.
Choose Optimal Tenure
Longer tenure = lower EMI but higher total cost. Use this calculator to find the balance point where the EMI is affordable but interest isn't excessive.
Avoid Zero Down Payment Traps
100% financing sounds attractive but results in higher loan amount, higher EMI, and significantly more interest. Always pay at least 10–15% down if possible.
Prepay Whenever Possible
Any extra lump-sum payment directly reduces principal. Prepaying even ₹50,000 in year 2 of a 5-year loan can save ₹20,000+ in future interest.
Frequently Asked Questions – Car Loan EMI
Car Loan EMI (Equated Monthly Instalment) is a fixed amount you pay every month to repay your car loan. It includes two components — the principal repayment and the interest charge.
Formula: EMI = [P × R × (1+R)^N] / [(1+R)^N – 1], where P = loan amount, R = monthly interest rate (annual rate ÷ 12 ÷ 100), N = tenure in months.
In the early months, most of your EMI goes toward interest. As the principal reduces, the interest component decreases and the principal component increases — this is called the reducing balance method, used by all RBI-regulated banks.
In 2026, car loan interest rates in India range from 8.70% to 15% p.a. for new cars. Key rates:
- SBI Car Loan: 9.00% – 9.70% p.a.
- Bank of Baroda: 8.70% – 10.70% p.a. (currently one of the lowest)
- HDFC Bank: 9.25% – 12.50% p.a.
- ICICI Bank: 9.10% – 11.75% p.a.
- Used car loans typically cost 1–3% more than new car loans.
Your rate depends on CIBIL score, income, loan amount, tenure, and the specific bank's policy.
Banks typically allow EMI up to 40–50% of net monthly income. Approximate eligibility:
- ₹30,000 salary: EMI up to ₹12,000–₹15,000 → Loan ≈ ₹5–6 lakhs (5 years @ 9%)
- ₹50,000 salary: EMI up to ₹20,000–₹25,000 → Loan ≈ ₹8–10 lakhs (5 years @ 9%)
- ₹1 lakh salary: EMI up to ₹40,000–₹50,000 → Loan ≈ ₹16–20 lakhs (5 years @ 9%)
These are estimates — use our calculator to find the exact EMI for any loan amount and check if it fits your budget comfortably.
Most Indian banks finance 80–90% of the on-road price for new cars, meaning the minimum down payment is 10–20% of the car's cost.
Example: For a ₹10 lakh car (on-road), you'll typically need ₹1–2 lakh upfront. However, some banks offer up to 100% financing for customers with excellent credit profiles and salary accounts.
A higher down payment is always financially smart — it reduces your loan amount, EMI, and total interest outgo.
Yes, you can prepay your car loan. As per RBI guidelines, banks cannot charge foreclosure penalty on floating rate car loans.
For fixed-rate car loans, lenders may charge a foreclosure fee of 1–5% of the outstanding principal, especially if you repay within the first 6–12 months (lock-in period).
Partial prepayment reduces your principal, which then reduces either your EMI (if you request the bank) or your remaining tenure — both save interest. Always check your loan agreement before prepaying.
Reducing balance is always better for the borrower — and that's what all RBI-regulated banks use for car loans in India.
Under the flat rate method, interest is calculated on the original loan amount throughout the tenure. Under reducing balance, interest is calculated on the outstanding principal each month — which keeps decreasing as you repay.
A flat rate of 9% is approximately equal to a reducing balance rate of 16–17%. Our calculator lets you compare both — always choose reducing balance when possible.
Read more: Flat Rate vs Reducing Rate Explained →
Your CIBIL score directly affects the interest rate you're offered, which directly changes your EMI:
- 750–900 (Excellent): Best rates, lowest EMI, instant approval
- 700–749 (Good): Competitive rates with minor premium
- 650–699 (Fair): Higher rates, may need co-applicant
- Below 650 (Poor): Likely rejection from banks; try NBFCs at much higher rates
On a ₹7L, 5-year loan: a 750+ score might get you 9% (EMI ₹14,527), while a 650 score gets 12% (EMI ₹15,571) — that's ₹62,640 more over 5 years!
Ex-showroom price is the manufacturer's listed price before taxes and registration. On-road price is the total amount you pay to drive the car home — it includes:
- Ex-showroom price
- GST (28% for cars above 4m + cess)
- Road Tax (varies by state, 4–20%)
- Registration charges
- Insurance (first year)
- Other dealer charges (Fastag, accessories, etc.)
Always use the on-road price for EMI calculation. Banks typically lend a percentage of the on-road price, not the ex-showroom price.