How is car loan EMI calculated?

EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the financed amount, r is the monthly interest rate and n is the number of monthly instalments. Interest is charged on the reducing balance.

How does a down payment change my car loan EMI?

A down payment reduces the principal directly. Because EMI and interest are both proportional to the principal, paying 20% upfront instead of 10% reduces both the EMI and the total interest by roughly the same proportion.

Is a longer car loan tenure a good idea?

It lowers the EMI but raises total interest, and a car loses value while you are still repaying. Many buyers keep vehicle loans to five years or less for that reason.

What is the difference between a flat rate and a reducing-balance rate?

A flat rate charges interest on the original amount for the whole tenure, while reducing balance charges it only on what is still outstanding. For the same quoted percentage, a flat rate is significantly more expensive. This calculator uses reducing balance.

Does the calculator include insurance and registration?

No. Enter only the amount you are financing. If your lender folds insurance or accessories into the loan, add them to the loan amount.

Can I use this for a used-car or two-wheeler loan?

Yes. The maths is the same reducing-balance formula — just enter the relevant loan amount, rate and tenure.

Car Loan Calculator

Calculate car loan EMI, total interest and total repayment after your down payment, with a year-wise amortisation schedule.

Under 20 seconds

Updated 26 Aug 2026

12,450people used this

Monthly EMI

₹16,801

Fixed instalment for 60 months at 9.5% p.a.

Total interest

₹2,08,089

20.6% of everything you repay.

Principal amount

₹8,00,000

The amount you borrow.

Total amount payable

₹10,08,089

Principal plus interest over the full tenure.

A car loan calculator works out the monthly EMI on a vehicle loan using the reducing-balance method. Enter the loan amount — the on-road price minus your down payment — along with the interest rate and tenure to see the EMI, total interest and total repayment.

Visual breakdown

A visual view of your calculation.

Interactive charts arrive here soon.

Repayment schedule

Year-by-year split of principal and interest on a reducing balance.

Year-by-year split of principal and interest on a reducing balance.
Year	Opening balance	Principal paid	Interest paid	Closing balance
1	₹8,00,000	₹1,31,234	₹70,383	₹6,68,766
2	₹6,68,766	₹1,44,259	₹57,359	₹5,24,506
3	₹5,24,506	₹1,58,576	₹43,041	₹3,65,930
4	₹3,65,930	₹1,74,315	₹27,303	₹1,91,615
5	₹1,91,615	₹1,91,615	₹10,003	₹0

Smart Insights

Generated from the numbers you entered — no guesswork.

A ₹8,00,000 car loan at 9.5% for 5 years costs ₹2,08,089 in interest.
Interest is 20.6% of your total repayment of ₹10,08,089, or ₹26 for every ₹100 borrowed.
Repaying in 4 years instead raises the EMI to ₹20,099 but saves about ₹43,361 of interest.
Increasing your down payment by ₹80,000 would cut the loan by the same amount and reduce interest in proportion.
Actual lender terms differ — processing fees, insurance and documentation charges are not included in this estimate.

How does the Car Loan Calculator work?

Each step the calculator runs, in plain language.

1
Start from the on-road price
On-road price includes ex-showroom price, registration, road tax and insurance. Lenders normally fund a percentage of it, not all of it.
2
Subtract your down payment
The loan amount is what is left after your down payment and any trade-in value. This is the number to enter above.
3
Apply the reducing-balance formula
Interest is charged monthly on the outstanding balance, so the interest share of each fixed EMI falls over time.
4
Compare tenures before you sign
The schedule and totals make it easy to see how much a longer tenure adds to the cost of the car.

Car Loan Calculator formula

The exact maths behind every number on this page.

EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)

P: Principal — on-road price minus down payment
r: Monthly interest rate (annual rate ÷ 12 ÷ 100)
n: Total monthly instalments (years × 12)

Car loans are normally fixed-rate and reducing-balance. A flat-rate quote is not the same thing and works out more expensive for the same headline number.

Car Loan Calculator calculation example

A ₹10,00,000 car with a ₹2,00,000 down payment, so ₹8,00,000 financed at 9.5% for 5 years.

1Principal (P)₹8,00,000
2Monthly rate (r)9.5 ÷ 12 ÷ 100 = 0.0079167
3Instalments (n)5 × 12 = 60
4EMI₹16,801 (approx.)

You repay about ₹10.08 lakh in total, of which roughly ₹2.08 lakh is interest.

Important assumptions

What this calculation includes, and what it leaves out.

The interest rate stays fixed for the whole tenure, which is standard for vehicle loans.
Interest is charged on the reducing monthly balance and every EMI is paid on time.
Processing fees, insurance, extended warranty, accessories and hypothecation charges are excluded.
No car prices or model data are used — you enter the loan amount yourself.

Benefits

Why people use this calculator before signing a loan.

Set your down payment with data
See instantly how a bigger down payment changes both EMI and total interest.
Budget the real monthly cost
Add fuel, insurance renewal and servicing to the EMI to get your true running cost.
Spot expensive dealer financing
Compare a dealer offer against a bank quote using total interest, not just the EMI.

Financial tips

Practical guidance to act on your result.

Every rupee of extra down payment reduces the financed amount and the interest on it.
Ask whether the quoted rate is reducing-balance or flat — a flat rate costs more than it looks.
Insurance, extended warranty and accessories added into the loan increase EMI as well.
A car is a depreciating asset, so a shorter tenure keeps you from owing more than the car is worth.

Frequently asked questions

Short, direct answers to the questions we hear most.

Guides that explain how to use this calculation in a real decision.

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Disclaimer

CalPaisa calculators are for general information and planning only. Results are estimates based on the values you enter and standard formulas, and may differ from the figures your bank, employer, or tax authority applies. Nothing here is investment, tax, or legal advice. Please confirm important decisions with a qualified professional. Read our financial disclaimer, learn how CalPaisa works, or tell us about a calculation you think is wrong.

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