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Car Loan EMI Calculator India (2026)

Calculate car loan EMI, compare bank rates, view amortisation schedule & prepayment savings.

₹8L at 9.5% for 5 yrs → ₹16,801/month EMI

Loan Details

Loan Type
₹8.0 L
₹1,00,000₹50,00,000
9.50%
7%18%
Tenure
5 years
1 yrs8 yrs
0%
0%40%

Your rate depends on credit score & bank

Monthly EMI₹16,801
Total Interest₹2,08,060
Total Payment₹10,08,060
Loan Payoff DateMay 2031
Interest % of Principal26.0% of principal

Principal vs Interest Split

₹16,801per month

Principal

₹8,00,000

Interest

₹2,08,060

Year-wise Amortisation Schedule

YearOpening BalanceEMI PaidPrincipalInterestClosing Balance
Year 1₹8,00,000₹2,01,612₹1,31,228₹70,384₹6,68,772
Year 2₹6,68,772₹2,01,612₹1,44,252₹57,360₹5,24,519
Year 3₹5,24,519₹2,01,612₹1,58,569₹43,043₹3,65,950
Year 4₹3,65,950₹2,01,612₹1,74,307₹27,305₹1,91,644
Year 5₹1,91,644₹2,01,612₹1,91,606₹10,006₹37

Showing schedule for ₹8.0 L at 9.50% for 5 years.

Prepayment Simulator — How Much Can You Save?

See how a lump-sum prepayment reduces your total interest

₹1.0 L
₹10,000₹8,00,000
12 months
1 months59 months
Reduce
Interest Saved₹34,408
Months Saved8 months
New Payoff DateSeptember 2030

EMI Formula

EMI = P × r × (1+r)n / ((1+r)n - 1)
P
Principal
r
Monthly rate
n
Months
⚠️

Important Disclaimer

Car loan calculations are based on inputs provided. Actual EMI may vary based on bank policies, processing fees, and insurance. Verify rates on bank websites before applying.

Car Loan Interest Rates — May 2026

Updated: May 2026
BankNew CarUsed CarProcessing FeeForeclosure
SBI Car Loan8.75%–10.85%10.75%–12.85%Nil (limited period)Nil
HDFC Bank9.10%–10.75%11.00%–13.50%₹3,500–₹6,500Nil (floating)
ICICI Bank9.10%–10.90%11.00%–14.00%₹3,500 onwardsNil (floating)
Axis Bank9.15%–10.80%11.25%–13.75%₹3,500–₹5,500Nil
Kotak Mahindra9.25%–12.00%12.00%–14.50%₹5,0005% (within 1yr)
Bank of Baroda8.80%–10.65%11.00%–13.00%₹1,500–₹5,000Nil
Federal Bank9.30%–11.00%12.00%–15.00%1% of loan2%
IndusInd Bank9.50%–13.00%12.50%–16.00%₹3,500–₹7,5005%

Rates are indicative. Final rate depends on credit score, income, and vehicle type. Verify on official bank websites before applying. Rates updated May 2026.

Car Loan EMI Per ₹1 Lakh — Quick Reference

Tip: For ₹10 lakh loan, multiply all values by 10.

Rate3 Years5 Years7 Years
8.75%₹3,165₹2,063₹1,580
9.00%₹3,180₹2,076₹1,609
9.50%₹3,195₹2,100₹1,622
10.00%₹3,227₹2,125₹1,650
10.50%₹3,250₹2,149₹1,678
11.00%₹3,274₹2,174₹1,706
12.00%₹3,321₹2,225₹1,765

Worked Example — How Car Loan EMI is Calculated

Rahul, a 32-year-old IT professional in Pune, wants to buy a Maruti Suzuki Swift at ₹10,00,000 on-road price. He pays ₹2,00,000 as down payment and takes a loan of ₹8,00,000 from HDFC Bank at 9.10% for 5 years.

EMI = P × r × (1+r)^n / ((1+r)^n - 1)

P = ₹8,00,000 | r = 9.10%/12 = 0.7583% | n = 60 months

EMI = ₹8,00,000 × 0.007583 × (1.007583)^60 / ((1.007583)^60 - 1)

= ₹16,660/month

  • Total paid₹16,660 × 60 = ₹9,99,600
  • Total interest₹1,99,600 (24.9% of loan)
  • Monthly cost as % of ₹75,000 salary22.2% — within safe limit
💡 Tip: Most banks recommend your car EMI should not exceed 15–20% of monthly take-home salary. At ₹75,000 salary, max advisable EMI = ₹11,250–₹15,000.

New Car Loan vs Used Car Loan — Key Differences

FactorNew Car LoanUsed Car Loan
Interest rate8.75%–12%10.75%–16%
Max loan tenure7–8 years3–5 years
LTV (Loan-to-Value)Up to 90%Up to 80%
Processing feeLower (₹0–₹5,000)Higher (₹3,000–₹10,000)
DocumentationSimplerMore complex (RC, insurance)
Resale riskLowerHigher
Best forBudget planning, tax savingsLower upfront cost, older models

For cars older than 3 years, some banks limit tenure to 3 years maximum. Cars older than 7 years may not be eligible for financing at most banks.

Car Loan Eligibility — What Banks Actually Check

✅ Credit Score

  • CIBIL 750+ → best rates (8.75%–9.50%)
  • CIBIL 700–749 → standard rates (+0.5% to +1%)
  • CIBIL 650–699 → higher rates or rejection
  • Below 650 → most banks reject; NBFCs may offer at 14–18%

✅ Income Requirement

  • Salaried: min ₹2–3 lakh annual income
  • Self-employed: min ₹2.5–4 lakh annual ITR
  • Min 1 year employment / 2 years in business

✅ Age

Minimum 21 years | Maximum 65–70 years at loan maturity

✅ LTV (Loan-to-Value)

  • New car: banks finance up to 85–90% of on-road price
  • Used car: banks finance up to 70–80% of car valuation

✅ Safe EMI Rule

Total EMIs (car + home + personal) should not exceed 40–50% of monthly take-home salary.

Example: Salary ₹60,000/month → max total EMI = ₹24,000–₹30,000

5 Ways to Reduce Your Car Loan Cost

1. Improve your CIBIL score before applying

A score of 750+ vs 700 can save 0.5%–1% on rate. On ₹8L for 5 years, 1% lower rate = ₹20,000+ saved in total interest.

2. Make a larger down payment

20% down instead of 10% reduces loan from ₹9L to ₹8L on a ₹10L car. Saves ₹12,500+ in total interest at 9.5%.

3. Choose shorter tenure if EMI is affordable

₹8L at 9.5%: 7-year tenure = ₹3,82,640 total interest. 5-year tenure = ₹2,07,394 total interest. Saves ₹1,75,246.

4. Prepay when you get annual bonus

₹1 lakh prepayment after year 1 on a 5-year ₹8L loan saves approximately ₹42,000 in interest.

5. Negotiate the processing fee

Many banks waive processing fees for salaried employees with salary accounts. SBI regularly runs zero-processing-fee campaigns. Ask explicitly.

Frequently Asked Questions — Car Loan Calculator

What is the car loan interest rate in India in 2026?
Car loan interest rates in India range from 8.75% to 12.00% depending on the bank and your credit profile. SBI offers from 8.75%, HDFC from 9.10%, ICICI from 9.10%, Axis from 9.15%, and Kotak from 9.25%. Used car loans are typically 1–2% higher than new car loans.
What is the EMI for a ₹8 lakh car loan for 7 years?
For a ₹8 lakh car loan at 9.5% interest for 7 years, the EMI is approximately ₹13,102/month. Total interest paid = ₹2,99,568. Total amount paid = ₹10,99,568. Use the calculator above to get exact figures for your loan amount and tenure.
Which bank gives the lowest car loan interest rate in India?
SBI currently offers the lowest new car loan rate starting at 8.75% for salaried employees with a good credit score. Bank of Baroda also offers competitive rates from 8.80%. Rates vary based on credit score, employment type, loan amount, and vehicle category. Always compare the final on-road loan offer from multiple lenders.
What is the maximum tenure for a car loan in India?
Most banks offer car loan tenures from 1 to 7 years (12 to 84 months). Some lenders like HDFC and ICICI offer up to 8 years for select models. Longer tenure means lower EMI but higher total interest paid. A 7-year loan on ₹10 lakh at 9.5% costs ₹4.73 lakh more in interest than a 5-year loan.
Can I prepay my car loan without penalty?
Most banks allow car loan prepayment after 6–12 EMIs. RBI guidelines prohibit foreclosure charges on floating rate loans. Fixed rate car loans may have a prepayment penalty of 2–5% of the outstanding amount. SBI, HDFC, and ICICI charge nil foreclosure on floating rate car loans. Always check your loan agreement for specific terms.
What is the minimum down payment for a car loan?
Most banks finance up to 85–90% of the car's on-road price, meaning a minimum down payment of 10–15% is required. For a ₹10 lakh car, you need ₹1–1.5 lakh as down payment. Some banks offer 100% financing for select models to existing customers with excellent credit. A higher down payment reduces your EMI and total interest.
Does a car loan affect my credit score?
Yes. Taking a car loan creates a hard inquiry which may temporarily lower your CIBIL score by 5–10 points. However, making all EMIs on time consistently improves your credit score over time. Missing even one EMI can reduce your score by 50–100 points and negatively impact future loan eligibility.
Is car loan interest tax deductible in India?
For personal use vehicles, car loan interest is NOT tax deductible in India. However, if the vehicle is used for business purposes, you can claim the interest paid as a business expense under Section 37(1) of the Income Tax Act. Self-employed individuals and business owners can thus deduct car loan interest from their taxable income.

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Content by Satyapal Khakhal, Founder, gpaisa.in | Updated: May 2026

Rates verified from official bank websites — May 2026 | Next update: June 2026