Car Loan EMI Calculator

About Car Loan EMI Calculator

A car loan (also called auto loan or vehicle loan) is a secured loan provided by banks, NBFCs, and car manufacturers to purchase a new or used car. The loan is repaid through Equated Monthly Installments (EMIs) over a period of 1 to 7 years.

On-Road Price Calculation

On-Road Price = Ex-Showroom + RTO + Insurance + Other Charges

• Ex-Showroom Price — Base price of the car at the dealership
• RTO Charges — Road Tax + Registration (8-12% of ex-showroom price)
• Insurance — Comprehensive insurance (mandatory first year)
• Other Charges — Accessories, extended warranty, handling fees

Car Loan Components

• Down Payment — Your upfront contribution (10-25% recommended)
• Loan Amount — On-Road Price − Down Payment
• Interest Rate — 7.5% to 14% p.a. depending on lender and credit score
• Tenure — 1 to 7 years (most common: 3-5 years)

Tips to Get Best Car Loan

• Compare interest rates from banks, NBFCs, and manufacturer financing.
• Maintain credit score above 750 for lower interest rates.
• Pay at least 20% down payment to reduce EMI burden.
• Choose shorter tenure (3-4 years) if possible — saves interest.
• Check for hidden charges: processing fee, prepayment penalty, foreclosure.
• Avoid taking loan for full on-road price — increases EMI significantly.
• Consider used car loan rates (usually 1-2% higher than new car).

Eligibility Criteria

• Age: 21-65 years
• Minimum monthly income: ₹20,000 (salaried), ₹2L annual (self-employed)
• Credit Score: 650+ acceptable, 750+ for best rates
• Employment: Min 1 year in current organization (salaried)
• Max EMI: Should not exceed 50% of monthly income

Tax Benefits

Important: Unlike home loans, car loans do NOT offer any tax deductions on principal or interest under current Income Tax Act. However, if the car is used for business purposes, interest may be claimed as business expense under Section 37.