Car Loan EMI Calculator India 2026
Work out your car loan EMI before you visit the showroom. New car loans run 8.4%–10.5% p.a. as of October 2026; used car loans are typically 2–4% higher.
How car loan EMI is calculated
Car loans use the same reducing-balance method as home loans. Each EMI first covers the month's interest on the outstanding principal; the remainder reduces the principal.
P = loan amount r = annual rate ÷ 12 ÷ 100 n = months
Example: ₹8 lakh car loan at 9.25% — tenure comparison
| Tenure | Monthly EMI | Total interest | Total payment |
|---|---|---|---|
| 3 years | ₹25,533 | ₹1,19,187 | ₹9,19,187 |
| 5 years | ₹16,704 | ₹2,02,235 | ₹10,02,235 |
| 7 years | ₹12,973 | ₹2,89,731 | ₹10,89,731 |
₹8 lakh over 5 years at different rates
| Interest rate | Monthly EMI | Total interest |
|---|---|---|
| 8.50% (best new-car rate) | ₹16,413 | ₹1,84,794 |
| 9.25% | ₹16,704 | ₹2,02,235 |
| 10.50% | ₹17,195 | ₹2,31,707 |
| 12.50% (typical used-car rate) | ₹17,998 | ₹2,79,901 |
Car loan rates in India (October 2026)
With the RBI repo rate raised 25 bps to 5.50% in the October 2026 MPC meeting (lenders are resetting floating rates ~0.25% higher):
| Loan type | Typical rate range |
|---|---|
| New car loan | 8.4% – 10.5% (SBI 8.40–9.35%) |
| Used car loan | +2% – 4% over new-car rates |
Your CIBIL score, the car model and your relationship with the bank all move the final rate within these bands. A 750+ score typically gets the advertised floor rate.
Frequently asked questions
What is the EMI on an 8 lakh car loan?
At 9.25% p.a. for 5 years, the EMI on a ₹8 lakh car loan is ₹16,704, with total interest of ₹2,02,235. Over 3 years the EMI rises to ₹25,533 but total interest drops to ₹1,19,187.
What are car loan interest rates in India in October 2026?
New car loans at major banks range roughly 8.4%–10.5% p.a. as of October 2026 (SBI 8.40–9.35%); the RBI repo rate was raised to 5.50% in the October 2026 MPC, so floating rates are edging up. Used car loans are typically priced 2–4% higher than new car loans.
Why are used car loan rates higher?
Lenders charge 2–4% more on used cars because the vehicle's resale value — their collateral — is lower and harder to assess. A stronger credit score and a larger down payment help narrow this premium.
Should I pick a 3, 5 or 7 year car loan tenure?
Shorter is cheaper: a ₹8 lakh loan at 9.25% costs ₹1,19,187 in interest over 3 years, ₹2,02,235 over 5 years and ₹2,89,731 over 7 years. Pick the shortest tenure whose EMI comfortably fits your budget.
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