Car Loan EMI Calculator

How to use this calculator

1. Choose New or Used car. This changes the rate guards, LTV limits, and maximum tenure. Used cars attract higher rates (typically +1.5–2%) and are capped at 5-year tenure with a minimum 20% down payment.
2. Build your on-road price. Enter the ex-showroom price and adjust RTO %, insurance %, and accessories. The calculator derives the true on-road price — what the bank uses to compute your eligible loan amount.
3. Set down payment and loan parameters. Slide the down payment percentage. A higher down payment lowers your EMI and total interest. Enter your expected interest rate — use the "See indicative bank rates" link to compare 30+ lenders.
4. Check affordability. Enter your take-home salary to see your EMI-to-income ratio (aim for under 40%). Or use the Affordability tab to reverse-calculate the maximum car you can comfortably buy.
5. Model prepayment. Even a one-time lump sum in year 1 can save months of interest on a car loan. Use the Prepayment tab to see your exact saving.

On-road price: what you actually pay

The ex-showroom price is just the starting point. Your total outlay — and the amount the bank uses to calculate LTV — is the on-road price:

New car vs Used car: the numbers most people miss

A used car at the same ex-showroom price as a new car is not cheaper on financing. Here's what changes:

• Rate premium: Used car loans are typically priced 1.5–2% higher. On a ₹6L loan over 5 years, 1.5% extra rate adds roughly ₹28,000 in additional interest.
• Shorter tenure: New cars qualify for up to 7 years; used cars are capped at 5 years. A shorter tenure means a higher EMI for the same loan amount.
• Lower LTV: Most banks fund up to 90% of a new car's on-road price, but only 80% for a used car. You need a larger down payment.
• Age restrictions: Many lenders do not finance cars older than 5–7 years, or cap the loan so it's fully repaid before the car turns 10 years.

Use the New vs Used tab to compare the total outgo side-by-side at your specific numbers.

The 40% rule: how much car can you afford?

A widely used rule of thumb: your total EMI obligations (all loans combined) should not exceed 40% of your monthly take-home salary. A stricter rule used by some planners: the car EMI alone should not exceed 15–20% of take-home.

Example: ₹60,000/month take-home, existing home loan EMI of ₹15,000. Available budget for car EMI = 40% of ₹60,000 − ₹15,000 = ₹9,000. At 8.50% over 5 years, ₹9,000 EMI supports a loan of ₹4.4L — on-road price of ₹5.5L at 20% down payment. Modest, but honest.

The Affordability tab lets you enter your exact salary and existing EMIs to get your personalised numbers at 3, 5, and 7-year tenures.

Should you prepay a car loan?

Unlike home loans, car loans have no tax benefit. The interest you pay is entirely post-tax. This makes the case for prepayment straightforward: if you can safely deploy a lump sum to prepay your car loan, the guaranteed return is equal to your loan rate (typically 8–10%). If your best safe alternative (FD, debt MF) earns less than this, prepay.

Typical foreclosure charges: 3–5% of outstanding principal, allowed after 6–12 months. Even with a 3% charge, prepaying a 9% loan after 1 year still saves money versus holding for the remaining 4 years.

Car loan rates across 30+ banks — indicative comparison

Interest rates vary significantly across lenders — and within each lender by your CIBIL score, loan amount, tenure, and income. PSU banks generally offer lower rates (7.40–9.65%) but may have stricter eligibility. Private banks (8.15–15%) are faster and more flexible. NBFCs (8.50–18%) serve customers with thinner credit profiles.

Compare indicative car loan rates from 30+ banks and NBFCs →

Frequently asked questions

What CIBIL score do I need for a car loan?

Most banks require a minimum CIBIL score of 700 to approve a car loan. For the best rates (especially PSU banks starting at 7.40%), you need 750+. Below 650, you may only get offers from NBFCs at higher rates. You can check your CIBIL score free once a year at the CIBIL website.

Can I get a car loan for an electric vehicle?

Yes. Most banks now offer car loans for EVs. Several states (Delhi, Maharashtra, Gujarat) waive road tax on EVs, so the RTO component is lower. SBI, HDFC, and ICICI all have dedicated EV loan schemes. Rates are similar to petrol car loans; some PSU banks offer a 0.25% concession for EVs.

Is the hypothecation fee included in the on-road price?

The hypothecation endorsement fee (₹1,500) is paid to the RTO when the RC is issued showing the lender's name. Some dealers include it in their quotation; others don't. This calculator adds it separately so you have a complete picture.

Can I negotiate the car loan interest rate?

Yes. If you have a CIBIL score above 750, a stable salary, and an existing relationship with the bank, you can often negotiate 0.25–0.50% below the listed rate. PSU banks may have less flexibility; private banks and NBFCs typically have more. Getting pre-approved before visiting the dealership strengthens your negotiating position with both the lender and the dealer.

What happens if I miss a car loan EMI?

Missing one EMI typically attracts a late payment fee (₹200–₹500) and a penal interest charge (2–3% p.a. on the overdue amount). After 90 days of non-payment, the loan is classified as an NPA (Non-Performing Asset), which damages your CIBIL score severely. The lender can also repossess the vehicle after due legal notice.