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Car loan EMI calculator

Written and reviewed by Omm · Last reviewed · General information, not investment advice

Work out the EMI of a car loan from the amount, the interest rate and the number of years. If your lender quotes a flat rate, switch the rate type to see the real yearly rate you are paying and compare it with other offers.

Between 10000 and 1000000000

Interest rate is quoted as
%

Between 0 and 40

years

Between 1 and 10

Prepayment and fees
%

Between 0 and 10

Between 0 and 10000000

Between 0 and 1000000000

Between 1 and 120

Your EMI is ₹16,607 a month. Over the loan you pay ₹1,96,401 in interest, which is 24.55% of the amount you borrow.

Monthly EMI

₹16,607

Total interest

₹1,96,401

Total you pay (loan + interest + fee)

₹10,04,401

Interest as % of the loan

24.55%

Processing fee

₹8,000

Year 1Year 5
Balance leftInterest paid so far
Year-by-year breakdown
YearPrincipal paidInterest paidBalance left
1₹1,32,664₹66,616₹6,67,336
2₹1,45,109₹54,171₹5,22,227
3₹1,58,721₹40,559₹3,63,506
4₹1,73,610₹25,670₹1,89,896
5₹1,89,896₹9,384₹0

How it works

EMI = P × i × (1 + i)ⁿ ÷ ((1 + i)ⁿ − 1) where P = loan amount, i = yearly rate ÷ 12, n = months. Flat rate: EMI = (P + P × flat rate × years) ÷ months

A car loan on the reducing-balance method works like any other loan: interest each month is charged on what you still owe, so it falls as you repay. The EMI is fixed, and the calculator shows how much of each year’s payments is interest and how much repays the loan.

Some lenders quote a flat rate. A flat rate charges interest on the full original amount for the whole term, even though you repay part of it every month. The EMI is the amount plus all that interest, divided by the number of months. A flat rate therefore costs much more than the same number quoted on a reducing balance, roughly 1.8 times as much. Switch to Flat rate to see the equivalent reducing-balance rate that you can compare with other loans.

The processing fee is paid once and added to the total cost. Insurance, registration, other charges and any down payment are not included. Enter the loan amount after your down payment.

Example. A ₹8,00,000 car loan at 9% on a reducing balance for 5 years has an EMI of about ₹16,607 and costs about ₹1,96,401 in interest. The same loan quoted at an 8% flat rate has an EMI of ₹18,667, which is really a +14.13% yearly rate on a reducing balance.

Read the guide: How an EMI works: home, car and personal loans, flat vs reducing rate.

Frequently asked questions

How do I calculate a car loan EMI?

Use EMI = P × i × (1 + i)ⁿ ÷ ((1 + i)ⁿ − 1), where P is the loan, i is the yearly rate divided by 12 and n is the number of months. The calculator does this and shows each year’s breakdown.

What is the difference between a flat rate and a reducing-balance rate?

A flat rate charges interest on the full original loan for the whole tenure. A reducing-balance rate charges interest only on what you still owe. A flat rate of 8% is much more expensive than 8% reducing, and equals roughly 14% to 15% on a reducing balance for a typical 5-year loan.

Should I take a longer tenure to lower the EMI?

A longer tenure lowers the EMI but raises the total interest, and you owe money for longer on a car that loses value each year. Compare the total interest at different tenures before deciding.

What does the calculator leave out?

Down payment, insurance, registration, other charges and any change in rate. Enter the loan amount you will actually borrow.

Is the loan given on the on-road price or the ex-showroom price?

It depends on the lender. The on-road price is the ex-showroom price plus road tax, registration and insurance. Lenders finance a share of one or the other and you pay the rest as down payment. Enter only the amount you actually borrow.

How much down payment should I make?

A larger down payment means a smaller loan, a lower EMI and less interest. A car loses value as it ages, so borrowing less also lowers the chance of owing more than the car is worth.

What is the car loan EMI per ₹1 lakh?

For every ₹1,00,000 borrowed, the EMI is ₹2,076 at 9% for 5 years and ₹1,609 at 9% for 7 years.

Sources

Rules, rates and definitions on this page come from these official sources. Check the current position there before you decide.

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