Car loan EMI calculator
Work out the monthly instalment on a vehicle loan and what the interest adds to the price.
The interest is a real part of the price
Eight lakh over five years at 9.5% is an instalment of about ₹16,800 and roughly ₹2.08 lakh of interest. That is a quarter added to the price of the car, and it belongs in the comparison when you are deciding between two models or between a loan and paying outright.
Down payment beats tenure
A car loan is short enough that stretching the tenure does not help as much as people hope, and it interacts badly with something a home loan does not have: depreciation. A new car loses value fastest in its first two or three years, while a seven-year loan is still mostly unpaid. Being underwater — owing more than the car is worth — is uncomfortable if it is written off or you need to sell.
Increasing the down payment reduces the principal directly, and every rupee of principal removed is a rupee that never accrues interest. Try it: drop the loan amount by a lakh and watch both the instalment and the total interest fall together, which is not what happens when you extend the tenure.
Watch out for a flat rate
This is the most expensive misunderstanding in vehicle finance. A reducing balance rate — what this calculator uses, and what a bank quotes — charges interest on what you still owe, which falls every month. A flat rate, still quoted by some dealers and NBFCs, charges interest on the original amount for the whole term, no matter how much you have repaid.
They are not comparable. A flat 6% is roughly an 11% reducing-balance rate over five years — nearly double. If an offer quotes a suspiciously low rate, ask which one it is before you compare it with anything here.
Zero per cent schemes
Genuine 0% financing exists on vehicles, usually as a manufacturer subsidy, and this handles it properly — at 0% the instalment is simply the amount divided by the number of months. Check whether the scheme replaces a cash discount you would otherwise have received, because a 0% loan that costs you a ₹60,000 discount is not free.
The rest of the cost
Insurance, registration, road tax, extended warranty and processing fees are frequently rolled into the loan. If they are, include them in the amount you type here — they are being borrowed and they accrue interest exactly like the rest of it.
Common questions
What is EMI?
An equated monthly instalment — a fixed payment covering both interest and principal, sized so the loan is fully repaid by the end of the term. The payment stays the same; what changes is how much of it is interest.
Why is so much of my early payment interest?
Interest is charged on the outstanding balance, and at the start that balance is the whole loan. As the balance falls the interest portion falls with it, so the principal portion grows every month.
Does it work for a 0% instalment plan?
Yes. The standard formula divides by zero there, so this handles it explicitly: the instalment is simply the amount divided by the number of months.
Will my bank quote exactly this figure?
The instalment should match to the rupee. The total may differ slightly because lenders add processing fees, insurance or a part-month of interest at disbursal, none of which are part of the loan maths.
How do I model a part-prepayment?
The extra-payment field applies the same additional amount every month, which is the common case. For a single lump sum, run the numbers again from the reduced balance and the remaining tenure.
Can I get the full schedule?
Yes — the copy and download buttons give you every month as CSV: payment, interest, principal and closing balance.