Car Loan EMI
Key takeaways
- Every ₹100 borrowed costs ₹126.01 to repay over 5 years — ₹100 of principal plus ₹26.01 of interest at 9.5%.
- Interest makes up 20.64% of the ₹10.08 L you pay in all.
- At 9% instead of 9.5%, total interest would be ₹11,688 lower — ₹1.96 L in all.
Payment schedule
| Year | Principal | Interest | Balance |
|---|---|---|---|
| 1 | ₹1.31 L | ₹70,383 | ₹6.69 L |
| 2 | ₹1.44 L | ₹57,359 | ₹5.25 L |
| 3 | ₹1.59 L | ₹43,041 | ₹3.66 L |
| 4 | ₹1.74 L | ₹27,303 | ₹1.92 L |
| 5 | ₹1.92 L | ₹10,003 | ₹0 |
About the Car Loan EMI
A car loan EMI is the fixed monthly amount that repays a vehicle loan over its tenure, made up of interest and principal. Car loans usually run for shorter tenures than home loans, so the EMI is higher relative to the amount but the total interest is smaller.
This calculator shows the EMI and total interest for your loan amount, interest rate and tenure.
Frequently asked questions
How is car loan EMI calculated?
Using the reducing-balance formula: EMI = P × i × (1 + i)ⁿ ÷ [(1 + i)ⁿ − 1], where P is the loan amount, i the monthly rate (annual ÷ 1200) and n the months. Interest is charged on the reducing balance.
How much of a car's price can I finance?
Lenders typically finance 80–90% of the on-road price, so you pay the rest as a down payment. A larger down payment means a smaller loan, a lower EMI and less total interest.
Does a car loan have any tax benefit?
Not for a salaried individual buying a personal car. Self-employed people and businesses can claim the interest (and depreciation) as a business expense if the car is used for the business.
Is a shorter or longer car loan tenure better?
A shorter tenure means a higher EMI but less total interest and you own the car sooner; a longer tenure eases the monthly outflow but costs more overall. A car also loses value over the same period, so the loan can outlast a large part of what it bought.
Can I prepay or foreclose a car loan?
Usually yes. Lenders may charge a foreclosure fee on fixed-rate loans, so check the terms. Prepaying reduces the outstanding principal and the remaining interest.
Disclaimer: This calculator is for information and education only. It is not investment advice and not a recommendation, and it is not a loan offer. The lender decides the actual interest rate, EMI, fees and eligibility, and whether insurance cover is required, and a floating rate can change during the loan. Charges you did not enter are not included. Every figure is computed solely by applying the formula and assumptions stated on this page to the inputs you entered.