How to interpret your result
Monthly EMI is your fixed monthly payment; Total Interest is the true cost of borrowing over the full tenure; Total Repayment (principal + interest) is what you'll pay back in all. A longer tenure lowers your EMI but raises total interest — don't choose a tenure on EMI affordability alone without checking what it does to the total cost.
Unlike a home loan, a car depreciates while the loan is outstanding — a longer tenure that lowers your EMI also means you'll owe more than the car is worth for longer. Most lenders cap EMI at 40–50% of net take-home income, so check that constraint alongside the total-interest figure before choosing a tenure.
This calculator assumes a standard reducing-balance EMI schedule. If your lender quotes a flat-rate loan instead, your actual interest cost will run noticeably higher than the reducing-balance figure shown here for the same headline rate — always ask which method applies before comparing offers.
Car Loan Interest Rates — Major Banks (2026)
Before using the calculator, enter a realistic interest rate for your profile — see current rates across major lenders above.
Rates as of May 2026. Your actual rate depends on your CIBIL score, income stability, loan amount, and the car model. Higher CIBIL scores (750+) attract the lowest rates.
How Much Does Tenure Affect Your EMI?
On a ₹8 lakh car loan at 9.5% interest:
| Tenure | Monthly EMI | Total Interest Paid | Total Amount Paid |
|---|---|---|---|
| 3 years | ₹25,637 | ₹1,22,932 | ₹9,22,932 |
| 5 years | ₹16,747 | ₹2,04,820 | ₹10,04,820 |
| 7 years | ₹12,874 | ₹2,81,416 | ₹10,81,416 |
A 7-year tenure cuts your EMI by 50% compared to 3 years — but you pay ₹1.58 lakh more in interest. Use the calculator to find your own trade-off.
Car Loan Eligibility — What Lenders Check
Most banks evaluate these factors:
- CIBIL score — 750+ gets the best rates; below 650 may face rejection or higher rates
- Income — minimum ₹20,000–₹25,000/month net take-home for most banks; self-employed need 2+ years of profitable ITR
- Employment stability — salaried in a stable job for 1+ year preferred; self-employed with business vintage 3+ years
- Existing EMIs — your total EMI burden (existing + proposed) should not exceed 50%–60% of take-home income
- Age — typically 21–65 years; loan must be repaid before age 65–70
New Car vs Used Car Loans
| Factor | New Car Loan | Used Car Loan |
|---|---|---|
| Interest rate | 8.75% – 13% | 11% – 18% |
| Maximum tenure | 7 years | 5 years |
| LTV (Loan-to-value) | Up to 90% of ex-showroom price | 70%–80% of valuation |
| Processing | Simpler, dealer tie-ups | Requires inspection/valuation |
For used cars, banks typically finance vehicles not older than 5–8 years and capping the total age at loan maturity to 15 years.
Tips to Get a Lower Interest Rate
- Check your CIBIL score before applying — dispute any errors; even a 30-point improvement can save ₹10,000+ in interest
- Compare before you commit — use this calculator with the exact rates from 2–3 banks before visiting the showroom
- Negotiate with your salary account bank — existing customers often get 0.25%–0.50% lower rates
- Avoid dealer financing — dealers earn commissions on financed deals; go directly to a bank for better rates
- Opt for a shorter tenure if affordable — lower total interest cost even if the rate is the same
- Time it with year-end offers — March (financial year-end) and October–November (festive season) see rate concessions and waived processing fees