Car Loan EMI Calculator India

EMI = P × r × (1+r)^n ÷ ((1+r)^n − 1), where P is the loan principal (car price minus down payment), r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the loan tenure in months. This is the standard reducing-balance EMI formula used by all Indian banks.

Car loan interest rates in India typically range from 7.5% to 14% per annum depending on the lender, borrower credit score, and car type. As of 2025: SBI offers rates from 8.75%, HDFC Bank from 8.65%, ICICI Bank from 8.9%, and Axis Bank from 8.7%. New car loans are cheaper than used car loans. A CIBIL score above 750 helps you get the best rates.

A higher down payment reduces your loan principal, resulting in lower EMI and less total interest paid. Banks typically finance up to 80–85% of the on-road price. Putting down 20–30% is generally recommended to keep EMI manageable and reduce total interest burden. For example, on a ₹10L car, putting down ₹2.5L instead of ₹1L saves roughly ₹12,000 in interest over 5 years.

Most banks offer car loan tenures of 1 to 7 years. Longer tenure means lower EMI but significantly higher total interest. A 7-year loan on ₹8L at 9% costs ₹58,000 more in interest than a 5-year loan. Unless affordability is a strict constraint, 3–5 years is the sweet spot for most buyers.

RBI guidelines prohibit banks from charging prepayment penalties on floating-rate car loans. However, fixed-rate car loans may have a prepayment charge of 1–3% of the outstanding amount. Check your loan agreement before making a lump-sum prepayment. Partial prepayment reduces either your EMI or tenure — ask the bank which option they offer.

Typically: identity proof (Aadhaar, PAN), address proof, latest 3–6 months bank statements, salary slips (last 3 months for salaried), ITR for 2–3 years (self-employed), and the car invoice/proforma from the dealer. The entire loan process, including e-KYC, can often be completed within 24–48 hours for pre-approved customers.