Car loans in India typically run 1–7 years at 8.5%–12%, and the showroom's finance desk earns commission on the loan it sells you — so walking in with your own numbers is the strongest negotiating move you have. This car loan EMI calculator computes the exact monthly instalment for the car's on-road price minus your down payment, at any rate and tenure, and shows total interest so you can see what the car truly costs. Compare a 3-year, 5-year and 7-year loan side by side: the 7-year EMI looks friendlier, but you will pay far more interest on a depreciating asset — and risk owing more than the car is worth in the early years.
How car loan EMI works
Indian car loans use monthly reducing-balance interest with the standard EMI formula. The amount financed is the on-road price (ex-showroom + RTO + insurance) minus down payment; some buyers also roll in accessories, which just raises the interest bill.
Example
₹10,00,000 on-road, ₹2,00,000 down, 9% for 5 years. Loan: ₹8,00,000. EMI ≈ ₹16,607. Total interest ≈ ₹1,96,400. At 7 years the EMI drops to ~₹12,856 but interest rises to ~₹2,79,900.
Getting a better deal
Get pre-approved quotes from your bank before visiting the dealer, then let the dealer try to beat it. A bigger down payment (20%+) keeps you from going underwater, and shorter tenures almost always win on total cost. Watch for processing fees (0.5–1%) and foreclosure charges (2–5%) in the fine print.
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Frequently asked questions
What is the car loan interest rate in India?
Typically 8.5%–12% for new cars from major banks, higher for used cars and weaker credit profiles. Public sector banks are often cheapest.
What is the maximum car loan tenure in India?
Up to 7 years (84 months) for new cars at most banks; used-car loans are usually capped at 3–5 years.
Is it better to take a car loan or pay cash?
If the loan rate is well below what your money earns elsewhere, financing can make sense. Otherwise cash avoids interest entirely — but never empty your emergency fund for it.