Loans & EMI

    Car Loan Calculator

    Calculate car-loan EMI, total interest and payoff schedule. Adjust down-payment, tenure and rate to find the best fit.

    Inputs
    %
    years
    Result
    Monthly Car Loan EMI
    ₹16,801
    • Principal₹8,00,000
    • Total Interest₹2,08,089
    • Total Payment₹10,08,089
    • Tenure60 months
    • Interest Rate9.5%

    You will pay ₹16,801 every month for 60 months. Total interest cost: ₹2,08,089 (26.01% of principal).

    Principal vs Interest
    Step-by-step calculation
    1. Monthly rate r = 9.5 / 12 / 100 = 0.007917
    2. Number of months N = 5 × 12 = 60
    3. EMI = P·r·(1+r)^N / ((1+r)^N − 1) = ₹16,801
    4. Total payment = EMI × N = ₹10,08,089
    5. Total interest = Total − Principal = ₹2,08,089
    Detailed Breakdown
    YearPrincipal PaidInterest PaidBalance
    1₹1,31,234₹70,383₹6,68,766
    2₹1,44,259₹57,359₹5,24,506
    3₹1,58,576₹43,041₹3,65,930
    4₹1,74,315₹27,303₹1,91,615
    5₹1,91,615₹10,003₹0
    How this is calculated
    EMI = P × r × (1 + r)ᴺ / ((1 + r)ᴺ − 1)
    • P = principal, r = monthly interest rate, N = total months.
    • Uses the reducing-balance method used by all Indian banks and NBFCs.
    • Total interest = EMI × N − P.
    Written by Taxpex CA Team
    Chartered Accountants (ICAI) · Reviewed by Taxpex Editorial Board
    Last updated 10 Nov 2025
    When to use this

    Is this the right calculator for you?

    • Comparing dealer-financed 0% (with margin loading) vs bank rate offers.
    • Deciding new vs used car finance — used loans often 300–500 bps costlier.
    • Modelling prepayment or foreclosure impact.
    Overview

    Understanding the Car Loan

    Car loans in India are secured against the vehicle (hypothecation) and priced between 8.5% and 12% for new cars and 12–16% for used cars. Tenures typically run 3–7 years. This calculator returns EMI, total interest and amortization schedule for any car-loan configuration — helpful when comparing dealer finance vs bank offers.

    Unlike home loans, car loans have no direct tax benefit for salaried buyers. Self-employed / business owners registering the car in the firm's name can claim depreciation (15% WDV) and interest as business expense. For EVs bought before 31 March 2023, interest up to ₹1.5 lakh was deductible under Section 80EEB — verify current status.

    Worked examples

    Real-world scenarios, step-by-step

    ₹10 L new-car loan @ 9.25% for 5 years

    Buying a mid-segment sedan with 20% down.

    • EMI ≈ ₹20,890 | Total ≈ ₹12.53 L | Interest ≈ ₹2.53 L
    EMI ≈ ₹20,890/month.
    Rates & reference

    Typical car-loan rates (2025)

    SegmentBank rateNBFC rate
    New — salaried, 800+ CIBIL8.5–9.5%9.5–11%
    New — self-employed9.5–11%10–12%
    Used (up to 3 yrs)12–14%13–16%
    Electric vehicle8.5–10%9–11%
    Pro tips

    Common mistakes to avoid

    Believing dealer's 0% EMI — hidden in ex-showroom vs on-road pricing.

    Ignoring insurance (~4% of ex-showroom) loading into loan.

    Extending tenure to 7 years — vehicle depreciates far faster than loan amortises.

    Need a CA to review your numbers? Book a free consult — we'll double-check within 24 hours.

    CA insights

    Expert tips from senior CAs

    • Register commercial-use cars in the business name for depreciation benefit.

    • Get an insurance quote separately — bundled dealer insurance is 20–30% costlier.

    Frequently asked questions

    How is a car loan EMI calculated?+

    EMI is computed using the standard reducing-balance formula: EMI = P × r × (1+r)^N / ((1+r)^N − 1), where P is the principal, r the monthly interest rate and N the tenure in months.

    Does this include processing fees or GST?+

    No. Processing fees, insurance, GST on fees and stamp duty are excluded and vary per lender. Add them separately to arrive at the true cost of the loan.

    Can prepayment reduce my interest?+

    Yes. Any principal prepayment reduces the outstanding balance and therefore future interest. Prepaying earlier in the tenure saves the most interest.

    Keep exploring

    People also ask

    How is a car loan EMI calculated?+

    EMI is computed using the standard reducing-balance formula: EMI = P × r × (1+r)^N / ((1+r)^N − 1), where P is the principal, r the monthly interest rate and N the tenure in months.

    via Car Loan Calculator
    How is this loan EMI calculated?+

    EMI is computed using the standard reducing-balance formula: EMI = P × r × (1+r)^N / ((1+r)^N − 1), where P is the principal, r the monthly interest rate and N the tenure in months.

    via EMI Calculator
    Does this include processing fees or GST?+

    No. Processing fees, insurance, GST on fees and stamp duty are excluded and vary per lender. Add them separately to arrive at the true cost of the loan.

    via EMI Calculator
    How is a personal loan EMI calculated?+

    EMI is computed using the standard reducing-balance formula: EMI = P × r × (1+r)^N / ((1+r)^N − 1), where P is the principal, r the monthly interest rate and N the tenure in months.

    via Personal Loan Calculator
    Does this include processing fees or GST?+

    No. Processing fees, insurance, GST on fees and stamp duty are excluded and vary per lender. Add them separately to arrive at the true cost of the loan.

    via Personal Loan Calculator

    Cite this page

    This dataset is free to reference in articles, research and reports. Attribution to Taxpex Consultancy is all we ask. Data last verified 31 July 2026.

    Citation (APA)
    Taxpex Consultancy. (2026). Car Loan Calculator — Taxpex. Retrieved from https://taxpex.com/tools/loans-emi/car-loan-calculator
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