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ICICI Car Loan EMI Calculator

Also try: Home Loan EMI CalculatorLoan EMI Calculator
₹16,704
₹
%
Yr

What does the car actually cost?

EMI is the financing cost. Add road tax, registration, insurance, and FASTag to see the real on-road price.

Open On-Road Price Calculator →

Monthly EMI

₹16,704

₹2.02 L interest paid over 5 years

Principal paid Interest paid

Loan Amount

₹8 L

Total Interest

₹2.02 L

Total Payable

₹10.02 L

EMI at different rates

Year-by-year amortization · 5 years @ 9.25% p.a.

Year

Principal Paid (₹)

Interest Paid (₹)

Outstanding (₹)

2027

1.32 Lakhs

68,499

6.68 Lakhs

2028

1.45 Lakhs

55,763

5.23 Lakhs

2029

1.59 Lakhs

41,797

3.65 Lakhs

2030

1.74 Lakhs

26,484

1.91 Lakhs

2031

1.91 Lakhs

9,692

0

What is a Car Loan EMI?

A car loan is a secured loan offered by banks and NBFCs to finance a new or used vehicle. The car itself is hypothecated to the lender — the registration certificate is endorsed in favour of the bank until the loan is fully repaid. In exchange for that security, car loan rates are noticeably lower than personal loan rates: typically 7.6–9.5% for new cars at PSU banks and 8.5–11% at private banks (used cars run 1.5–3% higher). See the car loan interest rates guide for the live bank-by-bank comparison and the PSU-vs-private foreclosure split (PSU 0% on floating, private 3–6% on fixed).

The EMI is the fixed monthly payment that retires both principal and interest over the agreed tenure. Each month a slice of the EMI pays interest on the outstanding balance, and the rest goes to reducing the principal. Early EMIs are interest-heavy; later ones principal-heavy.

How this car loan EMI calculator works

You enter three things: the car loan amount (i.e. on-road price minus your down payment), the annual interest rate, and the tenure in years. The calculator runs the standard EMI formula:

EMI = P × r × (1 + r)n / ((1 + r)n − 1)

Where P is the loan principal, r is the monthly rate (annual ÷ 12 ÷ 100), and n is total monthly instalments (years × 12). The year-by-year amortization table below tracks how much principal vs interest you pay each year and the outstanding balance.

A worked example: ₹8 lakh car loan @ 9.5% for 5 years

Suppose you buy a ₹10 lakh car with a 20% down payment, financing the remaining ₹8,00,000 at 9.5% annual interest for 5 years — a common configuration for a salaried first-time buyer.

  • Monthly EMI: approximately ₹16,801
  • Total amount paid over 5 years: approximately ₹10,08,083
  • Total interest cost: approximately ₹2,08,083 — about a quarter of the loan amount.

Cut tenure to 3 years and the EMI climbs to ₹25,656 but total interest drops to ₹1,23,628 — a saving of ₹84,000+ for accepting a steeper monthly outflow. Always run both before signing.

Down payment — how much should you put in?

Indian lenders typically fund up to 80–90% of the on-road price for new cars and 70–80% for used cars. The rest is your down payment. Two perspectives matter:

  • Affordability — a 20% down payment + 5-year tenure typically keeps the EMI within 10–15% of monthly net income, which lenders treat as comfortable.
  • Total interest — every additional ₹1 lakh of down payment cuts about ₹26,000 of interest over a 5-year tenure at 9.5%. Pay more up front if you can without raiding your emergency fund.

Do not let "100% financing" festive offers push the loan size beyond what comfortably fits your FOIR ceiling — banks happily lend up to the limit; you have to live with the EMI.

New car vs used car loan

Used car loans are typically priced 1.5–3% above new car rates because the depreciating collateral is weaker. Three other differences worth knowing:

  • LTV is lower — lenders typically fund only 70–80% of the used vehicle's assessed value, not its asking price.
  • Tenure is shorter — most lenders require the loan to be fully repaid before the vehicle turns 10–12 years old, so a 7-year-old car can only be financed over 3–5 years.
  • Documentation is heavier — vehicle valuation report, RC transfer, NOC from the previous owner's lender (if any), and insurance assignment all add 5–10 working days to the process.

Tax — is car loan interest deductible?

Generally no, for personal use. Car loans are not covered under any personal income-tax deduction section in India (unlike home loan interest under 24(b) or education loan interest under 80E). Plan the loan on its pre-tax cost — there is no shield to offset interest.

Exception: if the car is registered in a business's name and used for business purposes, the interest is a deductible business expense, and depreciation on the vehicle is also claimable. For salaried personal-use buyers, no tax benefit applies.

Car loan vs other loans — when to pick which

  • Car loan (this calculator) — almost always the cheapest way to finance a vehicle because it's secured by the car.
  • Personal loan — unsecured, 2–4% higher rate. Only consider it if no lender will write a car loan against the specific vehicle (very old or unbranded).
  • Top-up home loan — if you have an existing home loan with unutilised eligibility, a top-up can be 0.5–1% above your home loan rate (so ~9.5–11%). Comparable to a car loan and tax-friendlier if your home loan interest is already maxed under 24(b).
  • Loan against FD / mutual funds — 8–9% rate, 70–80% LTV of the underlying. Effectively a self-collateralised loan; cheapest of all but uses up your own corpus as collateral.

FAQs

EMI (Equated Monthly Instalment) is the fixed amount you pay your lender every month to repay a car loan over its agreed tenure. Each payment splits between principal repayment and interest on the outstanding balance — early EMIs are interest-heavy, later ones principal-heavy. A car loan is a secured loan: the vehicle is hypothecated to the lender until the loan is fully repaid.

Using the standard EMI formula EMI = P × r × (1+r)^n / ((1+r)^n − 1), where P is the on-road loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the total monthly instalments (years × 12). This calculator runs that exact formula and produces the year-by-year amortization split.

Three: car loan amount, annual interest rate, and tenure in years. Indian new-car loans typically run 1–7 years at 8.5–11% p.a. for salaried buyers with good credit, and 9.5–13% for used-car loans. Bank-specific car loan landing pages on this site pre-fill the rate with a typical published rate for that bank.

Most lenders fund 80–90% of the on-road price for new cars (so 10–20% comes from your pocket as down payment), and 70–80% for used cars (20–30% down). Higher down payment reduces the loan amount and total interest you pay over the tenure — a useful lever even when the EMI on the larger loan looks affordable.

Most Indian lenders cap new-car loan tenures at 7 years; some allow 8 years for premium / luxury vehicles. Used-car loan tenures cap at 5 years, often shorter for older vehicles (lenders typically require the loan to be fully repaid before the car turns 10–12 years old). Longer tenure means lower EMI but meaningfully higher total interest cost.

Most Indian car loans are fixed-rate from origination — what you sign up for is what you pay for the full tenure. A few lenders offer floating-rate car loans linked to MCLR or repo, but they're uncommon. This calculator assumes a constant rate, which exactly matches the fixed-rate norm.

Used car loans are typically priced 1.5–3% above new car loan rates because the lender's collateral (the depreciating vehicle) is weaker. A new car loan at 9% might be a used car loan at 11–12% for the same buyer. Tenure caps are also tighter for used cars. Check both options before deciding — sometimes the lower rate on a new car offsets the higher sticker price.

Almost always the car loan. Car loans are secured by the vehicle so rates are 8.5–11%; personal loans are unsecured and run 10.5–18%. For a ₹10 lakh car over 5 years, the difference is roughly ₹40,000–₹80,000 in total interest cost. The only reason to use a personal loan is if the car is so old or the dealer so obscure that no lender will write a vehicle loan against it.

No, not for personal use. Car loan interest is not deductible under any personal income-tax section. Exception: if the car is registered in a business's name and used for business purposes, the interest is a business expense deductible against business income. For salaried personal-use buyers, no tax benefit applies — factor the gross interest cost into the affordability math.

Yes. Floating-rate car loans to individuals have zero prepayment penalty per RBI norms; fixed-rate car loans (the majority) typically carry a 2–5% foreclosure fee on the outstanding amount, often only after the first 6–12 months. Even with the fee, prepayment usually wins when 24+ months remain and the loan rate is above your alternative-investment after-tax return.

Typically 0.5–1% of the loan amount + GST, deducted from the disbursal. Some lenders waive it during festive offers (Diwali, year-end). Check the sanction letter line-by-line — bundled insurance premiums and "convenience charges" can inflate the effective cost meaningfully above the headline rate.

Standard set: PAN card, Aadhaar, address proof, last 3 months' salary slips (or 2 years' ITR for self-employed), last 6 months' bank statements, and the proforma invoice from the dealer. Sanction usually takes 1–3 working days for salaried applicants with clean CIBIL. The dealer often coordinates the bank paperwork as part of the sale.

CIBIL 750+ usually gets you the best published rate. Scores between 700 and 750 are typically approved at a 0.5–1% premium. Below 700, expect rejection from most banks; NBFCs may approve at 13%+. Check your score on the free CIBIL portal once a year, ideally before applying — multiple applications in a short window themselves dent the score.

A late-payment penalty (typically 2% per month on the unpaid amount) plus a 30-day-overdue note to the credit bureau that dents your CIBIL score for years. Three consecutive missed EMIs flag the loan as NPA — at which point the lender can repossess the vehicle under SARFAESI provisions and sell it at auction to recover the dues. Always inform the lender in advance of any cash-flow stress.

Yes — this is called a "loan against car" (LAC). Lenders fund 50–80% of the vehicle's current market value at 12–15% p.a. for 1–3 years. The car is hypothecated to the lender until repayment. Useful for short-term liquidity, but expensive vs other options — compare against a top-up home loan or a tax-saver FD loan if you have either.