Whether you are buying a new car or a second hand car, knowing your exact monthly EMI before visiting the dealership puts you in full control. This car loan EMI calculator estimates your monthly outgo, total interest cost, and complete amortisation schedule for both new and used car loans — so you can compare bank offers, decide on a down payment, and avoid dealer finance markups.
What Is a Car Loan EMI Calculator?
A car loan EMI calculator estimates your monthly car loan payment based on the loan amount, interest rate, and tenure.
It shows total interest payable and an amortisation schedule — the month-by-month split of principal vs interest.
Use it before visiting any dealership: knowing your EMI gives you a firm negotiating position and helps you avoid being locked into dealer-arranged finance at higher rates.
Second Hand Car EMI Calculator — Used Car Loan Rates
Used car loans have different terms from new car loans — higher rates, shorter tenures, and lower LTV (banks finance less of the car's value).
Current second hand car loan rates (July 2026, approximate): SBI Used Car Loan: 9.45–10.95% p.a.
HDFC Bank Used Car Loan: 13.75–16.00% p.a.
ICICI Bank Used Car Loan: 10.75–12.00% p.a.
PNB Used Car Loan: 9.90–11.25% p.a.
Union Bank: 9.80% p.a.
(select models) Mahindra Finance: 12–16% p.a.
EMI example — Second hand car at ₹5 lakh, 12% p.a., 4 years: EMI = ₹13,157/month.Total interest = ₹1,31,536.
Same amount at 9.5% for 4 years: EMI = ₹12,557/month — saving ₹600/month and ₹28,800 over tenure.Banks typically finance 70–80% of the car's assessed market value for used cars (vs 85–90% for new).
Maximum tenure for used cars: 5–7 years depending on vehicle age.
New Car Loan EMI — Current Rates July 2026
New car loan rates (July 2026 — verify with lender before finalising): SBI Car Loan: 8.85–10.50% p.a.
HDFC Bank: 9.40–9.90% p.a.
ICICI Bank: 9.10–9.85% p.a.
PNB Car Loan: 8.90–9.90% p.a.
Bank of Baroda: 8.80–10.05% p.a.
Kotak Mahindra: 9.25% p.a.
onwards Tata Capital: 10.75% p.a.
onwards
EMI example — ₹8 lakh new car loan at 9% for 5 years: EMI = ₹16,602/month.Total interest = ₹1,96,120.
Manufacturer financing (Maruti, Hyundai, Tata Motors) sometimes offers 0% interest schemes for 12–24 months during festive seasons — but check total cost including processing fees and insurance bundled separately.
How Is Car Loan EMI Calculated?
Car loans use the reducing balance method: EMI = [P × r × (1+r)^n] / [(1+r)^n − 1], where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the tenure in months.Example: ₹8,00,000 at 10% for 5 years — r = 0.00833, n = 60 — EMI = ₹17,005/month.Total interest = ₹2,20,300.
Reducing tenure to 4 years: EMI rises to ₹20,281 but total interest falls to ₹1,73,488 — saving ₹46,812.
On-Road Price vs Ex-Showroom — What Banks Finance
Ex-showroom price is the base vehicle price.
On-road price includes: GST (28% + cess for most cars), road tax (varies by state, typically 3–12%), registration charges (₹5,000–₹1,00,000 depending on state and car value), insurance (₹15,000–₹75,000/year), accessories, and handling charges.
On-road is typically 10–20% higher than ex-showroom.
Banks finance 80–85% of the on-road price for new cars.
For a ₹10 lakh ex-showroom car with ₹12 lakh on-road: bank finances ₹10.2 lakh (85%) — you need ₹1.8 lakh as down payment minimum.
Second Hand Car Loan vs New Car Loan — Key Differences
Interest rate: Used car loans are 1–5% higher than new car loans due to higher default risk and depreciating collateral value.
LTV: Banks finance 70–80% of used car value vs 85–90% for new.
Tenure: Used car max tenure is 5–7 years (vehicle age + tenure typically capped at 10–12 years).
Documentation: Used cars require RC, insurance transfer, valuation certificate, and no-objection from previous owner if hypothecated.
Depreciation risk: A used car already lost 15–40% of its new value.
If you default in year 3, the bank's security (the car) may be worth less than the outstanding loan — leading banks to charge higher rates.
Down Payment Strategy
A higher down payment directly reduces your loan amount, EMI, and total interest.
For a ₹10 lakh car: 20% down = ₹8 lakh loan; 40% down = ₹6 lakh loan — reducing EMI by approximately ₹4,000/month at 9%.For used cars especially, a higher down payment is advisable because the car depreciates faster than the loan reduces.
A ₹6 lakh used car with 30% down (₹1.8 lakh down) means a ₹4.2 lakh loan — keeping you in positive equity throughout the loan period.
Tips for Getting the Best Car Loan
- Get pre-approved by your bank before visiting the dealership — this gives you a competitive rate to benchmark dealer finance against and avoids dealer markup.
- Check PSU banks (SBI, PNB, BOB) first — they consistently offer the lowest new car loan rates.
- For used cars, ICICI and SBI offer relatively competitive rates vs NBFCs.
- Avoid extending new car tenure beyond 5 years — you risk negative equity (loan > car value) in years 4–5 as depreciation accelerates.
- Compare total cost (EMI × months + processing fee), not just the interest rate headline.
Frequently Asked Questions
What is the EMI for a second hand car loan of ₹5 lakh?
At 12% for 4 years: EMI = ₹13,157/month, total interest = ₹1,31,536. At 10% for 4 years: EMI = ₹12,688/month, total interest = ₹1,09,024. At 9.5% for 3 years: EMI = ₹15,981/month, total interest = ₹75,316. Shorter tenure saves significantly more interest than a lower rate on a used car loan. Use the calculator above with your exact quoted rate.
Is this the same as CarDekho's car loan EMI calculator?
The reducing-balance EMI formula is standard across every car loan calculator, including CarDekho's — the math doesn't change by platform. What differs is coverage: this calculator includes current SBI, HDFC, PNB, and ICICI rate ranges for both new and used cars, plus on-road price and down payment breakdowns in one place, so you don't need to cross-reference multiple sites before a dealership visit.
Can I get a car loan for a second hand car?
Yes. Most banks (SBI, HDFC, ICICI, Kotak, PNB) and NBFCs offer used car loans for vehicles up to 7–10 years old, with maximum tenure capped so the car is not older than 10–15 years at loan end. Banks finance 70–80% of the assessed market value (not the purchase price). You'll need: RC book, insurance, valuation by bank's empanelled surveyor, seller NOC if previously hypothecated.
What is the difference between ex-showroom and on-road price?
Ex-showroom is the base car price before state taxes. On-road includes GST (28%+ for cars), state road tax (3–12%), registration, insurance, extended warranty, accessories — typically 10–20% more than ex-showroom. Banks finance based on on-road price. Always calculate EMI on the on-road price, not ex-showroom.
Is car loan interest tax-deductible?
For personal use: no deduction. For business use (car purchased in the name of a business or sole proprietor): interest is a fully deductible business expense. If you are self-employed and use the car for business, depreciation is also claimable. Keep mileage logs if you plan to claim partial business use.
Should I take a longer or shorter car loan tenure?
Shorter tenure (3–4 years) saves significantly on interest and keeps you in positive equity (car worth more than loan). A longer tenure (6–7 years) risks negative equity — your car depreciates faster than the loan reduces, leaving you owing more than the car's value. Most financial advisors recommend capping car loan tenure at 5 years maximum.
What is the difference between car loan from bank vs dealer finance?
Dealer finance (from the manufacturer's captive NBFC or tied bank) is convenient but typically 0.5–2% more expensive than getting your own bank loan. Dealers earn commission on finance arranged through them. Exception: manufacturer's 0% or low-interest festive schemes — verify that the car's price isn't inflated to compensate. Always compare your bank's pre-approved rate vs dealer quote before deciding.
Can I foreclose my car loan early?
Yes. Most banks allow foreclosure after 6–12 EMIs with a charge of 2–5% on the outstanding principal. RBI has mandated no foreclosure charges on floating-rate loans — but car loans are typically fixed-rate, so charges apply. HDFC car loans: 6% in year 1, 5% in year 2, 3% thereafter. Calculate whether interest savings outweigh the foreclosure charge before prepaying.