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Guide · Calculators & Tools

Car Loan EMI Calculator —
EMI, Interest & Schedule

Calculate your exact monthly EMI, total interest payable and full year-wise repayment schedule. Adjust the loan amount, rate and tenure to compare new and used car loan options instantly.

TaxClue Editorial Desk Updated 18 August 2026 3 min read 13 FAQs answered
Free & instant FY 2025-26 rates New & used car loans
Quick Answer

This car loan EMI calculator instantly computes your monthly EMI, total interest payable and a year-wise repayment schedule. Enter the loan amount (₹1L–₹50L), interest rate and tenure (1–7 years) and the result updates live. Car loan rates in India currently range from 8.75%–10.5% for new cars, higher for used ones.

New car rate 8.75%–10.5%
Used car rate 10.5%–14%
Max LTV 90%
Max tenure 7 yr
Interactive tool

Car Loan EMI Calculator

₹8,00,000
₹1L₹50L
9.5%
6%20%
5 Years
1 yr7 yrs
Monthly EMI
₹16,765
Total Interest
₹2.06L
Total Amount
₹10.06L
The formula

How Car Loan EMI Is Calculated

EMI is calculated using the standard reducing-balance formula: EMI = P × r × (1+r)n / [(1+r)n − 1], where P is the principal (loan amount), r is the monthly interest rate (annual rate ÷ 12 ÷ 100) and n is the tenure in months.

Example: a ₹8,00,000 loan at 9.5% for 5 years (60 months) gives a monthly rate of 0.00792, an EMI of ₹16,765, total repayment of ₹10.06 lakh and total interest of ₹2.06 lakh.

Keep EMI under 15–20% of net income

A shorter tenure means a higher EMI but far less total interest. A ₹10L loan at 9% costs ₹1.45L interest over 3 years but ₹3.31L over 7 years — you pay 2.3× more interest on the 7-year plan. Choose the shortest tenure your cash flow allows.

At a glance

Car Loan EMI — Quick Reference (at 9.5%)

Loan Amount3 Yr EMI5 Yr EMI7 Yr EMITotal Interest (5 yr)
₹3 lakh₹9,600₹6,287₹4,943₹77,220
₹5 lakh₹16,000₹10,479₹8,236₹1.29L
₹8 lakh₹25,600₹16,765₹13,177₹2.06L
₹10 lakh₹32,000₹20,956₹16,472₹2.57L
₹15 lakh₹48,000₹31,435₹24,707₹3.86L
₹20 lakh₹64,000₹41,913₹32,943₹5.15L

Indicative figures at 9.5% p.a. Use the calculator above for your exact amount, rate and tenure.

FY 2025-26

Car Loan Interest Rates — Top Banks

Bank / NBFCInterest RateMax TenureMax LTV
SBI Car Loan8.85% – 9.35%7 years90% on-road
HDFC Bank9.0% – 9.75%7 years90%
ICICI Bank9.1% – 10.1%7 years90%
Axis Bank9.25% – 10.0%7 years85%
Kotak Mahindra8.75% – 9.5%7 years90%
Bank of Baroda8.75% – 9.5%7 years90%
Union Bank8.8% – 9.4%7 years85%
Used car (avg)10.5% – 14%5 years80%

Rates depend on your CIBIL score (750+ gets best rates), income and whether the car is new or used. Verify the current rate with the lender before applying.

Is car loan interest tax-deductible?

For a personal-use car, car loan interest is not deductible. Only when the vehicle is used exclusively for business can the interest (and 15% WDV depreciation) be claimed as a business expense. Salaried individuals get no deduction on a personal car loan.

Government sourcesIncome tax rules: incometax.gov.in · Lender rates: individual bank websites (SBI, HDFC, ICICI, Axis, Kotak, BoB) · EMI formula: standard reducing-balance amortization
People also ask

Frequently Asked Questions

EMI basics
How is car loan EMI calculated?
Car loan EMI = P × r × (1+r)^n / [(1+r)^n − 1], where P = loan amount, r = monthly interest rate (annual rate ÷ 12 ÷ 100) and n = tenure in months. Example: ₹8 lakh at 9.5% for 5 years (60 months): monthly rate = 0.00792; EMI = ₹16,765/month. Total paid = ₹10.06 lakh; total interest = ₹2.06 lakh.
What does this calculator show?
It shows three things live as you move the sliders: your monthly EMI, the total interest you will pay over the tenure, and the total amount (principal + interest). Click "Show Amortization Schedule" to see the year-wise breakup of principal paid, interest paid and outstanding balance.
Does a longer tenure reduce my total cost?
No — it only reduces the monthly EMI. A longer tenure means you pay interest for more months, so total interest rises sharply. For a ₹10L loan at 9%: 3 years = ₹1.45L interest, 5 years = ₹2.45L, 7 years = ₹3.31L. The 7-year plan costs 2.3× more interest than 3 years.
Rates
What is the current car loan interest rate in India (2025-26)?
As of FY 2025-26: SBI 8.85%–9.35%; HDFC 9.0%–9.75%; ICICI 9.1%–10.1%; Axis 9.25%–10.0%; Kotak 8.75%–9.5%; Bank of Baroda 8.75%–9.5%. Rates depend on your credit score (750+ gets best rates), employment type, loan-to-value ratio and whether the car is new or used. Used car loans carry 0.5%–2% higher rates.
What is a good car loan tenure?
Tenure usually ranges from 1–7 years. Shorter tenure = higher EMI but much lower total interest. Keep the EMI below 15–20% of your net monthly income. For a ₹10L loan at 9%: 3 years EMI = ₹31,800 (₹1.45L interest); 5 years = ₹20,758 (₹2.45L); 7 years = ₹15,840 (₹3.31L). Avoid 7 years unless cash-flow constrained.
How can I get the lowest car loan rate?
Maintain a CIBIL score of 750+, make a larger down payment (lower LTV), keep a stable income and low existing EMIs, and compare offers across banks. Salaried applicants at banks where they hold a salary account, and those buying a new car, generally get the best rates.
Eligibility
What is the maximum car loan amount a bank will give?
Banks typically finance 80–90% of the on-road price of a new car; you pay the remaining 10–20% as down payment. The maximum also depends on income — your EMI should not exceed 40–50% of net monthly income. Example: net income ₹60,000/month → max EMI ~₹24,000 → max loan ~₹13.5 lakh at 9% for 7 years.
What documents are needed for a car loan?
Typically: PAN and Aadhaar, address proof, income proof (salary slips or ITR for self-employed), bank statements for the last 6 months, and Form 16 for salaried applicants. A CIBIL score above 700 is generally required, and 750+ gets the best rates.
What is loan-to-value (LTV) ratio?
LTV is the portion of the car price the bank finances. Most banks offer up to 85–90% of the on-road price for new cars and around 80% for used cars. A lower LTV (bigger down payment) reduces your loan amount, EMI and total interest, and often earns a better rate.
Tax
Is car loan interest tax deductible?
For a personal-use car, no. The interest is deductible only if the car is used exclusively for business, where it can be claimed as a business expense under "Profits and Gains from Business or Profession." Self-employed persons and businesses can also claim 15% WDV depreciation on a business car. Salaried employees get no deduction on a personal car loan.
Can I claim a car loan for an electric vehicle under Section 80EEB?
Section 80EEB allowed a deduction of up to ₹1.5 lakh on interest for loans taken to buy an electric vehicle, but only for loans sanctioned between 1 April 2019 and 31 March 2023. Loans sanctioned after that window do not qualify. Confirm your loan sanction date and eligibility on incometax.gov.in.
Prepayment
Can I prepay or foreclose my car loan?
Yes. Most banks allow part-prepayment or full foreclosure after a few EMIs. Foreclosure charges are typically 2–5% of the outstanding on fixed-rate loans (often nil on floating-rate loans for individuals). Prepaying early saves the most interest because more of your early EMIs go toward interest.
Should I prepay my car loan or invest the money?
If your car loan rate (say 9.5%) is higher than the after-tax return you can reliably earn on an investment, prepaying is usually the better financial choice as it is a guaranteed saving. If you can earn more elsewhere and have an emergency buffer, investing may win. Prepaying early in the tenure saves the most interest.
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