Calculate your car loan EMI with real numbers, not a sales pitch.
Tell us the loan amount, rate, and tenure. We'll show you the EMI, the full amortization schedule, and the total interest you'll pay over the loan's life. No dealer markup, no insurance bundled in, just the math.
What this loan really looks like
The lifetime split is only part of the story. These show how the principal/interest mix shifts year by year, how slowly the balance falls, and the month your payment finally tips toward principal.
Amortization schedule
See how each payment splits between principal and interest, and how your balance reduces over time.
| Year | Principal paid | Interest paid | Total payment | Balance |
|---|
About car loan EMIs
Car loans are simpler than home loans but have their own gotchas — short tenure, higher rates, and dealer-bundled extras that bloat the actual cost.
Keep it under 5 years
Cars depreciate fast. A 7-year car loan often means you owe more than the car is worth for the first 4 years. Aim for 3-5 years if possible.
Loan vs on-road price
Dealers bundle insurance, accessories, and extended warranties into the loan. Ask for the ex-showroom price and finance only that part. Add-ons should be cash or separately financed.
Personal use only
Unlike home loans, there's no income tax deduction on car loan EMI or interest for personal use. (Business-use vehicles get depreciation benefits, separate calculation.)
No penalty on floating-rate
RBI banned prepayment penalties on individual floating-rate loans. You can prepay your car loan partially or fully without extra charges.
EMI alone is misleading
A car loan EMI of ₹15,000 sounds fine. But if the loan includes 4 years of insurance, extended warranty, and accessories, you're paying interest on items that lose value immediately. Strip those out.
But sometimes worth it
Car loans are short, so refinancing rarely saves enough to be worth the paperwork. Exception: when rates have fallen 1.5%+ and you have 3+ years remaining.
Frequently asked questions
As of 2026, new car loan rates from major Indian banks range from 8.5% to 11% per annum. Used car loan rates are higher — typically 11% to 14%. The exact rate depends on your CIBIL score, the lender, the car's age, and whether you're a salaried or self-employed applicant.
Banks usually offer better rates to salaried applicants with a CIBIL score above 750 and a relationship with the bank (salary account, existing loan, etc.). Manufacturer-tied loan schemes (through NBFCs like Maruti Finance, Tata Capital) sometimes have promotional rates but watch for processing fees that offset the savings.
The longer the tenure, the lower the EMI, but also: (a) more total interest paid, (b) longer period of paying for a depreciating asset, (c) higher risk of being "underwater" (owing more than the car is worth).
For a ₹7 lakh car loan at 9.5%:
- 3 years: EMI ₹22,440, total interest ₹1.08L
- 5 years: EMI ₹14,701, total interest ₹1.82L
- 7 years: EMI ₹11,438, total interest ₹2.61L
A 5-year loan is the sweet spot for most buyers. Avoid 7-year unless absolutely necessary — by year 5 you'll likely be ready to upgrade and still owe ₹2 lakh on the old car.
For personal use, no. Car loan EMI and interest are not deductible from your salary income under the Income Tax Act.
For business use, yes — vehicles used for business purposes can be claimed as a business expense, with depreciation under Section 32. Self-employed professionals, freelancers, and small business owners can claim the depreciation (15% for passenger vehicles, 30% for commercial). Talk to a CA to set this up correctly.
Pre-approved offers from your bank are sometimes good — fast disbursal, less paperwork, possibly slightly lower rate. But always compare:
- The pre-approved rate vs. competing banks' rates
- Processing fees (sometimes higher on pre-approved offers)
- Whether the rate is fixed or floating
- Whether the offer requires you to buy car insurance from a tied insurer (often expensive)
A pre-approved loan that's 0.3% cheaper than the next-best offer but adds ₹15,000 in processing fees and ₹40,000 of bundled insurance is not a good deal.
Yes, and you should if you can afford it. The RBI prohibits prepayment penalties on floating-rate retail loans, including car loans, for individual borrowers. Fixed-rate loans may have a foreclosure charge — typically 2-5% of outstanding principal.
Prepaying a car loan in year 2 or 3 (when interest is still front-loaded in your EMI) saves significant money. A ₹7 lakh loan at 9.5%/5 years prepaid fully at the end of year 2 saves around ₹70,000-80,000 in interest compared to running it to term.