Car Loan EMI Calculator – Calculate Monthly Auto EMI, Interest & Down Payment

Car loan interest rates in India typically range from 8.70% to 11.50% per annum for new cars (SBI, HDFC, ICICI, Bank of Baroda) and 12% to 16% for used cars, depending on your credit score and down payment.

Car Loan EMI is calculated using the reducing balance method: EMI = [P × r × (1 + r)^n] / [(1 + r)^n - 1], where P is Net Loan Amount (On-Road Price minus Down Payment), r is monthly interest rate, and n is tenure in months.

Financial experts recommend following the 20/4/10 Rule: Make at least a 20% down payment, take a loan tenure of no more than 4 years, and ensure your monthly EMI + fuel/insurance costs do not exceed 10% of your gross monthly income.

Most major Indian banks offer car loan tenures ranging from 1 year (12 months) up to 7 years (84 months). Opting for a shorter tenure reduces your total interest burden significantly.

Yes! Under RBI guidelines, banks cannot charge foreclosure or prepayment penalties on floating-rate individual retail car loans. On fixed-rate loans, a nominal 2%-5% charge may apply.

Salaried employees cannot claim tax deductions on car loans. However, self-employed professionals and business owners can claim car loan interest and vehicle depreciation (15% p.a.) as legitimate business expenses under Section 37 of the Income Tax Act.