Auto Loan Calculator
Calculate monthly car loan payments and total interest before visiting the dealership.
🚗 What is an Auto Loan?
An auto loan (also called a vehicle loan or car loan) is a secured financing product that lets you purchase a car by borrowing money from a bank or financial institution and repaying it in fixed monthly instalments (EMIs) over an agreed period. The vehicle itself serves as collateral - the lender holds a hypothecation charge on the vehicle's Registration Certificate (RC) until the loan is fully repaid.
Auto loans are among the most widely used retail credit products in India. With car prices ranging from ₹4 lakh for entry-level hatchbacks to ₹1 crore+ for premium SUVs, financing through a loan has become the default purchase method for most buyers. The Indian auto loan market is dominated by banks like SBI, HDFC, ICICI, Axis, and Kotak, as well as Non-Banking Financial Companies (NBFCs) like Mahindra Finance, Tata Capital, and Bajaj Finance.
Unlike home loans, auto loans have shorter tenures (1-7 years), higher interest rates (reflecting the depreciating nature of the asset), and smaller loan amounts. New car loans typically finance up to 85-90% of the on-road price. Used car loans generally finance up to 70-80% of the car's market value at the time of purchase. The on-road price includes ex-showroom price, road tax, registration charges, and insurance - all of which can add 15-20% to the ex-showroom price.
This auto loan calculator uses the standard reducing-balance EMI formula to compute your exact monthly payment, total interest cost, and full repayment amount - giving you all the information you need before signing any loan agreement.
📐 Auto Loan EMI Formula
Car loan EMIs are calculated using the same reducing-balance formula used for all amortizing loans:
For example, if you buy a car priced at ₹10 lakhs with a 20% down payment (₹2 lakhs), the loan amount P = ₹8 lakhs. At 9.5% annual interest for 5 years: R = 9.5/12/100 = 0.007917, N = 60 months. The monthly EMI works out to approximately ₹16,758, and you will pay ₹2,05,480 in total interest over the 5-year period.
📖 How to Use This Calculator
Steps to Calculate Your Car Loan
💡 Example Calculations
Example 1 - Mid-Range Sedan
Car Price: ₹12 lakhs | Down Payment: 20% | Rate: 9.5% | Tenure: 5 years
Example 2 - Premium SUV
Car Price: ₹35 lakhs | Down Payment: 30% | Rate: 8.75% | Tenure: 4 years
❓ Frequently Asked Questions
🔗 Related Calculators
What is a good interest rate for a car loan in India?
As of June 2026, car loan rates from major banks typically range from 8.5%–10.5% p.a. depending on the vehicle type, loan tenure, and credit profile. Used car loans carry higher rates of 11%–15%. Borrowers with CIBIL scores above 750 qualify for the best rates. Always verify the current rate directly on your lender's website or app before applying.
Should I get a car loan from a bank or the dealership?
Banks typically offer lower interest rates than dealership financing. Dealership loans (through captive finance companies like Maruti Finance or Hyundai Finance) are convenient but often carry rates 1-2% higher than bank loans. Always check your bank's rate first, get pre-approval, and then use that as a benchmark when the dealership offers financing.
What is the maximum tenure for a car loan?
Most lenders offer car loan tenures from 1 to 7 years. Longer tenures reduce the monthly EMI but increase total interest paid significantly. On an ₹8 lakh loan at 9.5%, extending from 5 years to 7 years saves ₹2,847 per month but costs an additional ₹1.09 lakh in total interest. Whenever possible, choose a 3-5 year tenure.
Can I get a car loan with a low CIBIL score?
Some lenders offer car loans to borrowers with CIBIL scores below 700, but you will face higher interest rates (often 2-4% above standard rates), stricter conditions, and may need a co-applicant or guarantor. Improving your credit score before applying - by paying off existing debt and ensuring no missed EMIs for 6-12 months - will secure you significantly better terms.
What happens to my car loan if I sell the vehicle before the loan is repaid?
You cannot legally transfer ownership of a hypothecated (loan-financed) vehicle without the lender's consent. To sell the car before the loan is repaid, you must either fully repay the outstanding loan amount to get a No Objection Certificate (NOC) from the lender, or the buyer pays the lender directly and takes over the loan (loan transfer, subject to lender approval and buyer's creditworthiness).
What is a good interest rate for a car loan in 2026?
As of June 2026, car loan rates from major banks typically range from 8.5%–10.5% p.a. depending on the vehicle type, loan tenure, and credit profile. NBFCs tend to charge 1–3% more than banks. A CIBIL score above 750 generally qualifies for the lowest available rate. For used cars, expect rates 1–3% higher than new car loans. Always compare the total interest payable - not just the monthly EMI - when choosing between loan offers.
Should I make a larger down payment on a car loan?
A larger down payment reduces the loan principal, which lowers both your EMI and total interest paid. It also means you are less likely to be 'underwater' (owing more than the car's value) - a common issue in the first 2–3 years when depreciation is steepest. As a rule of thumb, aim for 20%+ down payment. If you can pay 30–40% upfront, the total cost of ownership drops significantly. Avoid the trap of a 0-down, long-tenure loan - the total interest can approach the car's value itself.
Is it better to take a longer tenure auto loan to lower my EMI?
A longer tenure reduces EMI but significantly increases total interest paid. A Rs 10 lakh car loan at 9% for 3 years has EMI ~Rs 31,800 with total interest ~Rs 1.45 lakh. At 7 years, EMI ~Rs 16,200 but total interest ~Rs 3.6 lakh - 2.5x more. Stick to the shortest tenure your budget allows. Most financial planners recommend not financing a car beyond 4-5 years.