Car Loan EMI Calculator — New & Used
See your car loan EMI, total interest, and 5-year cost of ownership. Works for both new and used cars at the rates Indian banks actually offer. Run the math before you walk into the showroom.
Open the Full Interactive Calculator →Adjust loan amount, rate, tenure, simulate prepaymentsSample EMI — ₹10 Lakh Car Loan
8.5% is the typical new-car rate, 10% mid-tier, 12% used-car territory.
| Rate / Tenure | 3 years | 5 years | 7 years |
|---|---|---|---|
| 8.5% | ₹31,568 | ₹20,517 | ₹15,836 |
| 10% | ₹32,267 | ₹21,247 | ₹16,601 |
| 12% | ₹33,214 | ₹22,244 | ₹17,653 |
New Car vs Used Car: The Math
A 2-year-old car typically costs 30–40% less than its new counterpart and comes with most of the depreciation already absorbed by the previous owner. The trade-off: used car loan rates are 2–3% higher, and banks sanction shorter tenures. For a buyer with ₹3 lakh down payment looking at a ₹10 lakh new car vs a ₹6.5 lakh used car of the same model, the used car often saves ₹2.5–3 lakh in absolute terms even after the rate premium. Use this calculator with both scenarios to see the exact difference.
Don't Stretch the Tenure
Auto dealers often push 7-year tenures because they make the EMI look affordable. The math is brutal: on a ₹10 lakh loan at 10%, going from 5-year to 7-year tenure drops your EMI by ₹2,500/month but adds nearly ₹70,000 to your total interest. Worse, a 7-year tenure means the car is depreciating faster than the loan amortizes — by year 4, you owe more on the loan than the car is worth. Stick to 5 years max for new cars, 3 years max for used.
Down Payment Sweet Spot: 25%+
Banks finance up to 90% of the on-road price for new cars, but a 25%+ down payment hits the sweet spot of low EMI burden, low total interest, and no risk of being underwater on the loan. It also gives you better negotiating leverage with the bank and dealer.
Frequently Asked Questions
- What is the typical car loan interest rate in India in 2026?
- New car loans from major banks (SBI, HDFC, ICICI) range from 8.5% to 10% for prime borrowers. Used car loan rates are higher — typically 11% to 14% — because the collateral depreciates faster. Top-end cars (luxury segment) sometimes get sub-8.5% rates due to higher loan amounts and customer profile.
- How much down payment should I make on a car loan?
- Most banks finance 80–90% of the on-road price for new cars, requiring a 10–20% down payment. For used cars, the financing typically caps at 70–80% of the valuation. A higher down payment reduces your EMI burden, total interest paid, and risk of going underwater (loan amount exceeding car's depreciated value). For a ₹10 lakh car, a 25% down payment instead of 10% saves you roughly ₹40,000–₹70,000 over the loan tenure depending on rate.
- Can I prepay my car loan without penalty?
- RBI's prepayment-penalty waiver applies only to floating-rate home loans. For car loans, most banks charge a 2–5% prepayment penalty on the outstanding amount, especially in the first 1–2 years. Always read your sanction letter — some private banks waive prepayment for accounts older than 12 months, and some offer zero-penalty floating-rate auto loans.
- What's the ideal car loan tenure?
- Most financial advisors recommend 3–5 years for new cars and 3 years max for used cars. Extending tenure to 7 years lowers EMI but inflates total interest dramatically — for a ₹10 lakh car at 10%, going from 5 years to 7 years adds ~₹70,000 in interest. Cars depreciate faster than the loan amortizes on long tenures, leaving you owning more on the loan than the car is worth.
- Is it better to buy a new or used car?
- Used cars (1–3 year old, with verified service records) typically offer 30–40% savings over new in absolute price terms. The downside: higher loan rates (~3% more) and shorter sanctioned tenure. For most middle-income Indian buyers, a 2-year-old used car with 70% loan and 30% down payment is the math-optimal choice. Use this EMI calculator to model both scenarios side-by-side.