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What this India car loan EMI calculator gives you
Indian car loans are simple-interest, fixed-rate loans typically running 3–7 years. Banks finance up to 90–100% of the on-road price for new cars and 70–80% for used cars. This car loan EMI calculator uses the same amortization formula required by every RBI-regulated lender — SBI, HDFC, ICICI, Axis, Kotak, Bank of Baroda, Mahindra Finance, Bajaj Finance, Tata Capital — and formats numbers in INR with proper lakh/crore notation.
How to use this calculator
- Start with the on-road price (ex-showroom + RTO + insurance + extras).
- Subtract your down payment (15–25% recommended) to get the loan amount.
- Use a real rate from a sanction letter or pre-approval, not the dealer's verbal quote.
- Pick a tenure. 5 years is most common; longer tenures cost more interest.
- Try the quick chips to see how amount, rate, and tenure shift the EMI.
Worked example: ₹8 lakh new car loan at 9.5% for 5 years
- Principal
P = ₹8,00,000; rate 9.5%; tenure 60 months - EMI ≈ ₹16,801
- Total interest ≈ ₹2,08,066
- Total repayment ≈ ₹10,08,066
On a 5-year horizon you'll pay roughly ₹2 lakh in interest on an asset that's likely worth ₹4–5 lakh by year five. Indian cars typically lose 15–20% of value in year one and 60–65% over five years. Combined with the interest cost, that's why aggressive down payments and shorter tenures matter.
Tenure comparison: 3, 5, and 7 years
| Tenure | EMI | Total interest | Total repayment |
|---|---|---|---|
| 3 years @ 9.50% | ₹25,650 | ~₹1,23,394 | ~₹9,23,394 |
| 5 years @ 9.50% | ₹16,801 | ~₹2,08,066 | ~₹10,08,066 |
| 7 years @ 9.75% | ₹13,289 | ~₹3,16,283 | ~₹11,16,283 |
New vs used car loan rates in India
New car loan rates in India typically range 8.75–10.5% for prime borrowers. Used car loan rates are 2–5 percentage points higher (12–16%) because lenders price in the higher default risk and faster depreciation of the collateral. NBFCs like Mahindra Finance and Bajaj Finance dominate the used car loan space, especially in semi-urban and rural India.
Indicative car loan rates by Indian lender (2026)
| Lender | New car | Used car | Notes |
|---|---|---|---|
| SBI Car Loan | 8.85–9.75% | 11.50–13.00% | Lowest among PSU banks; women borrowers get a small concession |
| HDFC Bank | 9.10–10.10% | 12.25–14.50% | Fast digital sanction |
| ICICI Bank | 9.10–10.25% | 12.50–14.75% | Pre-approved offers for existing customers |
| Axis Bank | 9.20–10.40% | 12.50–15.00% | Branch & online |
| Mahindra Finance | 9.50–11.50% | 13.00–17.00% | Strong rural/semi-urban presence |
| Bajaj Finance | 9.75–11.75% | 13.00–17.50% | Used car focus, fast disbursal |
Prepayment, GST & processing fee
- Processing fee: 0.4–1% + GST. Negotiable for prime borrowers.
- Prepayment fee: 2–4% on part- or full-prepayment in many banks; some waive it on full closure after 12 months.
- Lock-in: some lenders disallow prepayment for the first 6–12 months.
- GST: 18% applies to processing fees (not on the loan itself).
Common Indian car loan mistakes
- Choosing the lowest EMI by stretching to 7 years. Total interest can grow ~50%.
- Accepting dealer financing without comparing. Banks & NBFCs often beat the rate.
- Skipping the down payment to get 100% financing. Higher EMI and higher total interest.
- Ignoring CIBIL. A score under 700 can cost ₹50–70K extra interest on an ₹8 lakh loan.
- Not negotiating processing fee. Banks frequently waive 50–100% for premium customers.
Compare buying vs leasing
Should you finance the car or take a long-term lease? Run a side-by-side total cost.
Frequently asked questions
How is car loan EMI calculated in India?
EMI = P × r × (1+r)n / ((1+r)n − 1) — the same formula used by every RBI-regulated lender.
What is the typical car loan rate in India in 2026?
New car loans: 8.75–10.5% for prime borrowers. Used car loans: 12–16%.
What car loan tenure should I choose?
Aim for 3–5 years if cash flow allows. 7-year tenures cost ~50% more in lifetime interest.
Can I get a 100% car loan in India?
Many banks offer up to 90–100% LTV on new cars, but a 15–20% down payment is strongly recommended.
Is dealer car finance cheaper than a bank loan in India?
Rarely. Get a bank pre-approval first; dealers typically earn a 1–2% spread.
Can I prepay my car loan in India?
Most banks allow it after 6–12 months with a 2–4% fee. Some waive the fee on full closure.
Does this calculator include road tax, insurance, or registration?
No. EMI covers principal and interest only.
How does CIBIL score affect car loan EMI?
CIBIL 750+ unlocks the lowest rates. Sub-700 can cost 1.5–3% more in rate.
Difference between SBI, HDFC, ICICI car loan rates?
PSU banks (SBI, BoB) typically lead on rate; private banks (HDFC, ICICI) on speed and digital experience.
How accurate is this car loan EMI calculator for Indian banks?
Math is exact. Real EMIs may differ by ₹50–150 due to rounding or processing fees. Always confirm with the sanction letter.
Sources & further reading. Reserve Bank of India (RBI) · CIBIL · Internal: India home loan EMI calculator, India personal loan EMI calculator, How to calculate loan EMI.