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Car Loan Calculator
On-road price · EMI · Total interest · Amortization schedule · 2026 bank rates
On-road price builderDown payment %Total ownership costYear-by-year schedule
Step 1 - Build your on-road price
₹
₹2L₹1Cr
Insurance (1st year)
₹
RTO / road tax
₹
Other charges (TCS, accessories)
₹
Ex-showroom: ₹10.00 LInsurance: ₹30,000RTO: ₹80,000Other: ₹20,000
On-road price: ₹11.30 L
Step 2 - Loan details
%
10%80%
Down payment: ₹2.26 L · Loan amount: ₹9.04 L
%
7%18%
months
1284
= 5 years
Monthly EMI
₹18,766
per month
Total interest
₹2.22 L
extra you pay the bank
Total cost
₹13.52 L
35.2% above ex-showroom
Total cost of ownership breakdown
Ex-showroom price
₹10.00 LInsurance + RTO
₹1.30 LDown payment
₹2.26 LLoan interest paid
₹2.22 LTotal ownership cost₹13.52 L
Where every rupee goes
Ex-showroom: 74.0% (₹10.00 L)
On-road extras: 9.6% (₹1.30 L)
Loan interest: 16.4% (₹2.22 L)
Is your EMI affordable? - Salary affordability check
Rule of thumb: total EMIs should be below 40% of monthly take-home pay
| Monthly salary | EMI as % of salary | Status | Max car loan EMI (40%) |
|---|---|---|---|
| ₹30,000 | 62.6% | ✗ Too high | ₹12,000 |
| ₹50,000 | 37.5% | ✓ Affordable | ₹20,000 |
| ₹75,000 | 25.0% | ✓ Affordable | ₹30,000 |
| ₹1,00,000 | 18.8% | ✓ Affordable | ₹40,000 |
| ₹1,50,000 | 12.5% | ✓ Affordable | ₹60,000 |
Year-by-year EMI breakdown
PrincipalInterest
Yr 1Yr 2Yr 3Yr 4Yr 5
Amortization schedule
Showing first 12 months
| Month | Opening balance | EMI paid | Interest | Principal | Closing balance |
|---|---|---|---|---|---|
| 1 | ₹9,04,000 | ₹18,766 | ₹6,780 | ₹11,986 | ₹8,92,014 |
| 2 | ₹8,92,014 | ₹18,765 | ₹6,690 | ₹12,075 | ₹8,79,939 |
| 3 | ₹8,79,939 | ₹18,766 | ₹6,600 | ₹12,166 | ₹8,67,773 |
| 4 | ₹8,67,773 | ₹18,765 | ₹6,508 | ₹12,257 | ₹8,55,516 |
| 5 | ₹8,55,516 | ₹18,765 | ₹6,416 | ₹12,349 | ₹8,43,167 |
| 6 | ₹8,43,167 | ₹18,766 | ₹6,324 | ₹12,442 | ₹8,30,725 |
| 7 | ₹8,30,725 | ₹18,765 | ₹6,230 | ₹12,535 | ₹8,18,190 |
| 8 | ₹8,18,190 | ₹18,765 | ₹6,136 | ₹12,629 | ₹8,05,560 |
| 9 | ₹8,05,560 | ₹18,766 | ₹6,042 | ₹12,724 | ₹7,92,837 |
| 10 | ₹7,92,837 | ₹18,765 | ₹5,946 | ₹12,819 | ₹7,80,017 |
| 11 | ₹7,80,017 | ₹18,765 | ₹5,850 | ₹12,915 | ₹7,67,102 |
| 12 | ₹7,67,102 | ₹18,765 | ₹5,753 | ₹13,012 | ₹7,54,090 |
Car loan interest rates - Indian banks 2026
| Lender | Rate range | EMI on ₹8L, 5 yrs (min rate) | Note |
|---|---|---|---|
| SBI Car Loan | 8.85% – 9.85% | ₹16,549 | For salaried, up to 7 years |
| HDFC Bank | 9% – 9.75% | ₹16,607 | Up to 7 years, on-road price |
| ICICI Bank | 9% – 9.9% | ₹16,607 | Existing customers may get lower |
| Axis Bank | 8.75% – 11.5% | ₹16,510 | Depends on CIBIL score |
| Kotak Mahindra | 8.99% – 12.99% | ₹16,603 | Flexible tenure up to 7 years |
| Bank of Baroda | 8.75% – 11.5% | ₹16,510 | For new cars |
| Union Bank of India | 8.7% – 9.5% | ₹16,490 | Competitive for PSU bank |
| IDFC First Bank | 9% – 12% | ₹16,607 | Pre-approved for salary account |
| Bajaj Finance | 9.99% – 14.99% | ₹16,994 | NBFC, faster processing |
| Tata Capital | 9.5% – 13.5% | ₹16,801 | Manufacturer tie-ups available |
*Rates as of Jan 2026 and vary based on credit profile, income, and manufacturer tie-ups. Always negotiate - banks have discretion of 0.25–0.5%.
Car Loan Guide for Indian Buyers - Everything You Need to Know
Buying a car is the second-largest financial commitment for most Indians after a home. Unlike a home loan - where the asset (property) appreciates - a car depreciates the moment it leaves the showroom. Understanding the true cost of car financing helps you make a better decision: how much to put down, which loan tenure makes sense, and whether the EMI fits your budget without stretching your finances.
What goes into the on-road price?
| Component | Typical range | Who charges | Notes |
|---|---|---|---|
| Ex-showroom price | Base price | Manufacturer | Includes GST (28% + 1–22% cess depending on category) |
| RTO / Road tax | 1–18% of ex-showroom | State government | Varies widely - Delhi ~4%, Maharashtra ~11–13% |
| Comprehensive insurance | ₹15,000–₹80,000 | Insurance co. | Mandatory. 1st year includes 3-year TP insurance |
| TCS (Tax Collected at Source) | 1% above ₹10L | Dealer | Applicable on vehicles priced above ₹10 lakh |
| Accessories & fastag | ₹5,000–₹50,000 | Dealer | Seat covers, mats, dash cam, FASTag |
| Extended warranty | ₹10,000–₹40,000 | OEM/dealer | Usually optional, recommended for long-term ownership |
| Dealer handling charges | ₹2,000–₹15,000 | Dealer | Often negotiable - push back on this |
5 mistakes to avoid when taking a car loan
1
Choosing too long a tenure to lower EMI
A 7-year car loan at 9% on ₹8L costs ₹2.57L in interest. The same loan over 5 years costs ₹1.88L - ₹69,000 less. Worse, your car loses 60% of its value in 5 years while you still owe money. Keep tenure under 5 years for cars.
2
Putting less than 20% down payment
Banks finance up to 90% of on-road price, but financing more means more interest and the risk of being 'upside down' (owing more than the car is worth) if you need to sell early. Aim for at least 20–25% down payment.
3
Not negotiating the interest rate
The rate quoted is rarely the best rate. Your CIBIL score, existing banking relationship, and competing bank offers are leverage. A 0.5% reduction on ₹8L over 5 years saves ₹11,200 in interest. Always ask.
4
Buying add-ons at the dealership on EMI
Dealers love to add accessories, extended warranties, and insurance riders to your loan amount, increasing your total interest cost. Pay for accessories separately or negotiate them as freebies - don't borrow money to buy floor mats.
5
Ignoring the total ownership cost beyond EMI
The EMI is just one part of car ownership. Annual insurance renewal, servicing (₹8,000–₹20,000/year), fuel, tyres, and parking cost as much as the EMI over 5 years. Budget ₹1–1.5L/year beyond the EMI for a mid-segment car.
Compare EMI vs renting a car
Should you buy or subscribe / rent instead?
Frequently asked questions
What is the maximum car loan tenure in India?▼
Most banks offer car loans up to 7 years (84 months) for new cars and 5 years for used cars. Some NBFCs offer up to 8 years. However, longer tenure significantly increases total interest cost and leaves you 'upside down' on the loan (car worth less than outstanding loan) for most of the tenure. 5 years is the most balanced choice - reasonable EMI with manageable interest cost.
What CIBIL score do I need for the best car loan rate?▼
A CIBIL score of 750+ gets you the best rates - typically 0.25–0.5% lower than the base rate. Scores between 700–749 usually get standard rates. Below 700, you may still get a loan but at a higher rate or with a larger down payment requirement. Banks also check your income stability, existing EMIs (FOIR ratio), and employment type. Salaried employees at reputable companies typically get better rates than self-employed applicants.
What is the difference between a new car loan and a pre-owned car loan?▼
New car loans: up to 90% of on-road price, lower interest rates (8.75–11%), longer tenure up to 7 years. Used car loans: typically 70–85% of valuation (not purchase price), higher interest rates (12–18%), shorter tenure of 3–5 years, and the bank requires a vehicle inspection. For used cars, the total cost of a loan (including higher rate + shorter tenure) often makes cash purchase more attractive if the amount is manageable.
Can I prepay a car loan early?▼
Yes, but check the prepayment clause. Many banks charge a foreclosure fee of 2–5% on the outstanding principal if you close the loan before a certain period (typically 6–12 months). After this initial lock-in period, prepayment is usually free or charged at 1–2%. If you receive a windfall, compare: foreclosure charge + interest saved. If interest saved over remaining tenure > foreclosure charge, prepay. Generally worthwhile in the first 3 years of the loan.
Should I take a loan for the full on-road price or only ex-showroom?▼
Some banks offer financing on the on-road price (including insurance and RTO), while others finance only the ex-showroom price. Financing the full on-road price means a larger loan and more interest, but it reduces the upfront cash needed. If you can afford to pay insurance and RTO separately (typically ₹50,000–₹1,50,000), do so - these components depreciate to zero immediately, so you're borrowing money to pay for something with no residual value.