Car Loan EMI Calculator
Calculate your car loan EMI, total interest payable & year-wise repayment schedule instantly. Includes ex-showroom vs on-road price calculator.
| Year | Opening Balance | Principal Paid | Interest Paid | Closing Balance |
|---|
Always compare the on-road price — not the ex-showroom price — before calculating your loan. RTO registration, insurance, and handling charges typically add 8–12% to the ex-showroom price. On a ₹8 lakh car, the on-road price can easily be ₹9–9.5 lakh. A higher down payment significantly reduces your interest burden — even a 20% down payment can save ₹50,000+ over a 5-year term. Always compare lenders using the reducing balance rate, not the flat rate. Smart EMI Calculator →
Ex-Showroom vs On-Road Price — The Number That Actually Matters
The biggest mistake car buyers make is calculating their loan on the ex-showroom price. The car you actually drive home costs significantly more. Here is what gets added between the showroom tag and the actual price you pay:
On a ₹10 lakh car, the on-road price is typically ₹93,000 to ₹1,65,000 higher than the ex-showroom price. This is the number your loan should be based on — not the showroom sticker. Use the “On-Road Price + Down Payment” mode in the calculator above to get an accurate EMI estimate.
Car Loan Interest Rates in India — May 2026
Car loan rates in May 2026 have come down significantly from recent highs, with public sector banks now offering competitive rates starting from 7.45% for top-qualified borrowers. Here are the current starting rates:
| Bank | Interest Rate (p.a.) | Max Tenure | Max Financing | Processing Fee |
|---|---|---|---|---|
| SBI | 7.60% – 9.50% | 7 years | 90% of on-road price | ₹1,000 – ₹10,000 |
| HDFC Bank | 9.40% onwards | 7 years | 100% of ex-showroom | Up to ₹7,500 + GST |
| ICICI Bank | 9.10% onwards | 7 years | 100% of on-road price | Up to 2% + taxes |
| Axis Bank | 9.40% onwards | 7 years | 95% of on-road price | Up to 2% + GST |
| Canara Bank | 7.45% – 9.80% | 7 years | 90% of on-road price | 0.25% (min ₹1,000) |
| Kotak Bank | 8.99% onwards | 5 years | 90% of ex-showroom | Up to ₹5,000 |
Source: Bank websites and BankBazaar.com, May 2026. Rates are indicative and subject to change based on CIBIL score, income, and vehicle model.
How Down Payment Affects Your Total Car Loan Cost
Most people make the minimum down payment to preserve cash. This is usually the most expensive decision they make in the entire car buying process. Here is the real impact of down payment on a ₹10 lakh on-road price car at 9% interest over 5 years:
| Down Payment | Loan Amount | Monthly EMI | Total Interest | Total Cost of Car |
|---|---|---|---|---|
| 10% — ₹1,00,000 | ₹9,00,000 | ₹18,682 | ₹2,20,920 | ₹12,20,920 |
| 20% — ₹2,00,000 | ₹8,00,000 | ₹16,606 | ₹1,96,360 | ₹11,96,360 |
| 30% — ₹3,00,000 | ₹7,00,000 | ₹14,530 | ₹1,71,800 | ₹11,71,800 |
The difference between a 10% and 30% down payment is ₹49,120 in total interest saved — and an EMI that is ₹4,152 lower every month for 5 years. If you can make a higher down payment, the numbers almost always justify it.
Rahul visited a Maruti Suzuki showroom in Pune to buy a Brezza. The ex-showroom price was ₹12.5 lakhs. The dealer’s finance executive offered him a loan on the spot — ₹12.5 lakhs at “8% interest” for 7 years. Rahul agreed, relieved the EMI was manageable.
What he missed: the 8% was a flat rate, not reducing balance. The actual reducing balance rate was closer to 14.5%. His actual on-road cost was ₹14.1 lakhs — not ₹12.5 lakhs. And by the time he finished the 7-year loan, he had paid ₹5.8 lakhs in interest on a ₹14.1 lakh car.
A colleague who bought the same car, took a reducing balance loan from SBI at 8.5%, and paid 25% down saved ₹45,000 in total interest compared to Rahul — just by doing 30 minutes of research before walking into the showroom.
How to Use This Car Loan EMI Calculator
Loan Amount Directly: Use this if you already know exactly how much you are borrowing — for example, if your bank has pre-approved a specific amount.
On-Road Price + Down Payment: Use this if you are still planning your purchase. Enter the car’s on-road price (not ex-showroom), your planned down payment, and the calculator will derive the exact loan amount automatically.
Always use the reducing balance rate — not the flat rate. If the dealer or NBFC quotes a flat rate, multiply it by approximately 1.8 to get the rough reducing balance equivalent. For banks, the rate quoted is almost always reducing balance.
Car loans go up to 7 years. Longer tenure = lower EMI but more total interest. Unlike a home, a car depreciates rapidly — a 7-year loan on a car means you are still paying EMIs when the car is already significantly devalued. Most financial advisors recommend keeping car loan tenure to 3–5 years maximum.
The year-wise repayment schedule shows your opening balance, principal paid, interest paid, and closing balance for each year. This helps you see exactly when you build equity in the car — and when making a prepayment has the most impact.
5 Things to Do Before Taking a Car Loan
New Car vs Used Car Loan — Rate Difference in 2026
| Factor | New Car Loan | Used Car Loan |
|---|---|---|
| Interest Rate (2026) | 7.45% – 11.5% | 9.5% – 16% |
| Max Financing | 85–100% of on-road price | 70–85% of valuation |
| Max Tenure | 7 years | 5 years |
| Documentation | Standard KYC + income proof | RC, valuation report, additional checks |
| Depreciation risk | Moderate — new car | High — already depreciated |
Frequently Asked Questions
A car is one of the fastest-depreciating assets you will ever buy — which makes the car loan one of the most important financing decisions to get right. The difference between a well-researched car loan and a poorly chosen one is often ₹30,000–₹80,000 over the loan tenure.
Always calculate on the on-road price. Compare at least your bank and one PSU bank. Confirm the rate is reducing balance. Keep the tenure to 5 years maximum.
Run your numbers here before you walk into the showroom. The calculator is free. The savings are real.