Car Loan EMI Calculator
Enter your car loan amount, annual interest rate, and repayment tenure to calculate your Equated Monthly Instalment (EMI). You also get the total interest payable, a year-by-year amortization schedule, and a breakdown of how much of your repayment goes toward the principal versus interest. Add an optional processing fee to see the true cost of the loan.
Formula
Worked example
A car loan of INR 6,00,000 at 9.5% p.a. for 60 months: monthly rate r = 9.5/(100x12) = 0.007917. EMI = 6,00,000 x 0.007917 x (1.007917)^60 / ((1.007917)^60 - 1) = approximately 12,606. Total payable = 12,606 x 60 = 7,56,360. Total interest = 7,56,360 - 6,00,000 = 1,56,360.
What is a car loan EMI?
EMI stands for Equated Monthly Instalment, the fixed amount you pay to your lender every month until the loan is fully repaid. Each EMI blends two components: a portion that reduces the outstanding principal and a portion that covers the interest for that month. Because the outstanding balance falls with every payment, the share going to interest gradually shrinks while the share going to principal grows. This structure is called amortization, and it ensures the loan is completely paid off by the final payment.
How to use this calculator
Enter the loan amount (the amount you are borrowing, not the on-road price of the car), the annual interest rate your lender has quoted, and the repayment tenure in months or years. If your lender charges a processing fee, enter it as a percentage of the loan amount to see the additional up-front cost. Your monthly EMI, total interest, and total payable update immediately. Scroll down to see the year-by-year amortization schedule showing exactly how the balance reduces over time, and the donut chart showing the split between principal and interest. Try adjusting the tenure to see the trade-off: a shorter tenure means a higher EMI but far less total interest; a longer tenure eases the monthly burden but increases the overall cost of the loan.
The EMI formula and worked example
The standard amortization formula is: EMI = P x r x (1+r)^n / ((1+r)^n - 1), where P is the principal (loan amount), r is the monthly interest rate (annual rate divided by 12 then by 100), and n is the total number of monthly payments. For example, a loan of INR 6,00,000 at 9.5% p.a. for 60 months gives a monthly rate of 0.007917. Substituting: EMI = 6,00,000 x 0.007917 x (1.007917)^60 / ((1.007917)^60 - 1) = approximately 12,606. Over 60 months you pay 7,56,360 in total, meaning the interest cost is 1,56,360 (about 26% of the principal).
Key factors that affect your EMI
Four variables control what you pay each month. The principal is the most direct lever: a bigger down payment reduces the amount financed and therefore both the EMI and total interest. The interest rate is determined by your credit score, the lender you choose, whether the rate is fixed or floating, and the age and make of the vehicle. The tenure is within your control: stretching the loan cuts the monthly payment but raises the lifetime interest cost significantly. Finally, the processing fee is a one-time cost that increases the effective cost of borrowing even though it does not appear in the EMI figure itself. Always factor it into your comparison when choosing between lenders.
Fixed vs. floating rate car loans
Most car loans in India are offered at a fixed rate, meaning the EMI stays the same throughout the tenure regardless of changes to benchmark rates such as the RBI repo rate. This makes budgeting predictable. Some lenders offer floating-rate car loans linked to the repo rate or MCLR; these can benefit borrowers when rates fall but expose them to higher EMIs if rates rise. This calculator uses a fixed-rate model, which reflects the majority of retail car loans.
Typical car loan interest rates in India (2026)
| Lender type | Rate range (p.a.) | Tenure range |
|---|---|---|
| Public sector banks (SBI, PNB, BOB) | 8.75% - 10.50% | 12 - 84 months |
| Private banks (HDFC, ICICI, Axis) | 9.00% - 11.50% | 12 - 84 months |
| NBFCs (Bajaj Finance, Tata Capital) | 10.00% - 14.00% | 12 - 60 months |
| Manufacturer financiers (Maruti, Hyundai) | 7.99% - 9.99% | 12 - 60 months |
Indicative ranges from major lenders. Actual rates depend on credit score, income, and vehicle type.
Frequently asked questions
What does EMI stand for and how is it calculated?
EMI stands for Equated Monthly Instalment. It is calculated using the formula EMI = P x r x (1+r)^n / ((1+r)^n - 1), where P is the loan principal, r is the monthly interest rate (annual rate divided by 1,200), and n is the number of monthly payments. Each payment is identical, but the split between interest and principal changes every month.
Does a higher tenure always mean a lower EMI?
Yes, a longer tenure always produces a lower EMI for the same principal and rate. However, you pay significantly more total interest over a longer period. For example, a 6,00,000 loan at 9.5% p.a. over 48 months gives an EMI of about 15,120 and total interest of about 72,800, while the same loan over 84 months gives an EMI of about 9,890 but total interest of about 2,30,700.
What is the processing fee and does it affect my EMI?
The processing fee is a one-time charge (usually 0.5% to 2% of the loan amount) that the lender deducts at the time of disbursal or collects up front. It does not change the EMI amount but it does increase the effective cost of borrowing. This calculator shows it as a separate output so you can factor it into your total-cost comparison between lenders.
Can I reduce my EMI after the loan is disbursed?
Most lenders allow a partial prepayment, which reduces the outstanding principal. After a prepayment, you can either keep the EMI the same and shorten the tenure (saving more interest overall) or reduce the EMI while keeping the original tenure. Check with your lender about prepayment charges: some car loans carry a 2% to 5% fee on the prepaid amount, though many now allow part-prepayment free of charge.
How much car loan can I get on my salary?
Most banks in India limit the EMI to 40% to 50% of your net monthly take-home salary. For example, if your take-home is INR 50,000, lenders typically allow an EMI up to about 20,000 to 25,000. Combine that with the rate and your desired tenure in this calculator to find the maximum loan amount that fits within your salary limit.
What is the difference between on-road price and loan amount?
The on-road price includes the ex-showroom price plus registration charges, road tax, insurance, and optional accessories. Banks typically finance between 80% and 90% of the ex-showroom price or on-road price (depending on the lender), not the full on-road cost. Enter only the amount you intend to borrow into this calculator, not the full on-road price.