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Car Loan EMI Calculator for All Banks

Car Loan Calculator India 2020

Last Updated 02nd Dec 2020

  • Car loan interest rates starts @ 9.25%.
  • Lowest EMI per lakh on car loan is ₹ 1,622 for a loan tenure of 7 years.
  • Get car loan upto 100% value of the car.
Loan Amount2 Year Loan4 Year loan7 Year loan
₹ 5 Lakh₹ 22,900₹ 12,502₹ 8,108
₹ 10 Lakh₹ 45,800₹ 25,004₹ 16,216
₹ 15 Lakh₹ 68,699₹ 37,506₹ 24,324
Car Loan
Lowest Interest Rate

Lowest Car Loan EMI, Car EMI per lakh Dec 2020

Bank Car Loan EMI per lakh, New Car Car Loan EMI per lakh, Used Car
HDFC Bank Car Loan ₹ 1,564 for 7 years ₹ 1,351 for 7 years
SBI Car Loan ₹ 1,559 for 7 years ₹ 1,082 for 5 years
ICICI Bank Car Loan ₹ 1,624 for 7 years ₹ 819 for 5 years
Axis Bank Car Loan ₹ 1,622 for 7 years
IndusInd Bank Car Loan ₹ 2,157 for 5 years
Kotak Bank ₹ 2,199 for 5 years ₹ 729 for 5 years
PNB ₹ 1,596 for 7 years ₹ 973 for 5 years
Union Bank of India ₹ 1,589 for 7 years ₹ 948 for 5 years
Central Bank of India ₹ 1,609 for 7 years ₹ 1,065 for 5 years
Andhra Bank ₹ 1,629 for 7 years ₹ 933 for 5 years
IDBI Bank ₹ 1,624 for 7 years
Federal Bank ₹ 1,617 for 7 years ₹ 976 for 5 years
Bank of India ₹ 1,634 for 7 years ₹ 1,068 for 3 years
Bank of Maharashtra ₹ 1,622 for 7 years ₹ 1,113 for 5 years
Corporation Bank ₹ 1,637 for 7 years
Indian Bank ₹ 1,642 for 7 years ₹ 911 for 5 years
OBC ₹ 1,611 for 7 years ₹ 897 for 3 years
Bank of Baroda ₹ 1,604 for 7 years ₹ 930 for 3 years
United Bank of India ₹ 1,614 for 7 years

Car Loan Calculator

As per the current rate of 9.25% for new car, Axis Bank, Bank of Maharashtra offers the lowest EMI car loan of ₹ 1,622 for 7 years on per lakh loan amount. The EMI can vary depending upon the interest rate, loan amount and loan tenure. Higher the loan amount, higher will be the EMI.

EMI Calculator for Car Loan

  • The monthly amount calculated by car loan EMI calculator is the fixed money you pay to the bank towards payment of principal and interest.
  • For a car loan per lakh loan amount at 9.25% interest rate, the EMI is as below:
Loan Tenure 2 years 3 years 5 years
EMI amount for loan amount ₹ 1 Lakh at 9.25% ₹ 4,580 ₹ 3,192 ₹ 2,088
Total amount you pay back to the bank including principal and interest ₹ 1,09,919 ₹ 1,14,898 ₹ 1,25,279
Interest you have to pay over loan tenure ₹ 9,919 ₹ 14,898 ₹ 25,279

At the lowest car loan rates of 9.25% the lowest car loan EMI per lakh for a tenure of 5 years is ₹ 2,088. In this case you have to pay an interest of ₹ 25,279 on your loan amount of ₹ 1 Lakh over a period of 5 years.

If you decide to take loan for 2 years only, for the same rate of interest you will pay a higher per lakh EMI for car loan of ₹ 4,580. In this scenario you pay a total interest of ₹ 9,919 on your loan amount of ₹ 1 Lakh over a period of 2 years, which is less than half of what you paid for a 5 years loan.

Amortization Schedule

An amortization schedule refers to a complete table of periodic loan payments presenting the principal and interest amount that comprise each payment until the loan is repaid. In simple terms, it provides a roadmap of spreading out a credit option like car loan into a series of fixed payments. While each monthly payment remains the same, the payment is made up of parts that vary over time. It assists banks and financial institutes to keep a track of what they owe and when, as well as forecast the outstanding balance or interest at any point of the repayment schedule.

Car Loan Amortization Calculator

An amortization schedule is a table of periodic loan payments that shows the amount of principal and the amount of interest that comprise each payment until the loan is paid off at the end of its term.

In the Amortization schedule, your Car Loan monthly EMI will be equal, but the component of EMI, which consists of interest payment and principal payment will not remain the same every month, it keeps on changing.

Illustration: How to read an amortization schedule

Suppose if you take a Car Loan of ₹ 2 Lakh for 2 years at an interest rate of 9.25%. EMI calculated for this loan amount is ₹ 9,160 and the total annual EMIs to be paid annually is ₹ 1,09,919. The EMI schedule of loan for 2 years is explained below in the table –

Amortization Schedule for a Car Loan of ₹ 2 Lakh over the 2 years

Year Interest paid during the year Principal repaid during the year Total amount paid during the year (Interest + Principal) Outstanding Principal
2020 ₹ 1,542 ₹ 7,618 ₹ 9,160 ₹ 1,92,382
2021 ₹ 13,788 ₹ 96,131 ₹ 1,09,919 ₹ 96,250
2022 ₹ 4,509 ₹ 96,250 ₹ 1,00,759 ₹ 0

Each Car Loan EMI consists of both amounts of interest as well as the principal repaid. The interest component of EMI goes down while the principal component goes up in both cases while doing the calculation.

In the above illustration, on a Car Loan of ₹ 2 Lakh, taken at the lowest interest rate of 9.25%, EMI paid is ₹ 9,160 and an annual total of EMIs is ₹ 1,09,919, the interest component is ₹ 14,523 while the principal component is ₹ 95,396 in year 1 of loan disbursement. You repay only 47.7% of the total principal after paying 12 EMIs during the first year.

In year 2, the interest component of EMI is around 4.84%, while the principal component is around 95.16%. Upto 2 years, you have cumulatively repaid 100% of your total Car Loan.

Car Loan EMI Calculator Formula

Apart from online car loan calculator, you can also calculate your monthly EMI with a mathematical formula.
You can calculate the monthly payment (EMI) yourself using the following equation

E= P. r. (1+r)^n/[(1+r)^n -1]

Where,

  • P represents the principal amount that you want to apply for
  • r is the rate of interest per month which is calculated as rate of annual income/ (12*100)
  • n is the tenure of loan in months
  • E represents the monthly payment or EMI

Car EMI Calculator Benefits

EMI calculator calculates your car loan EMI and has multiple benefits, which are listed below -

  • Saves time: EMI calculator saves your time by calculating EMI in seconds and does not waste your time in doing tedious and time consuming calculations. You'll get the output immediately as you'll enter the loan related details.
  • Accurate results: Manual calculations can sometimes lead to wrong results which can change your loan EMI and make you change your decision while taking vehicle loan. That's why, it is well-advised to use online EMI calculator to get correct results.
  • Plan your finances: Vehicle loan EMI calculator tells you about EMI and also let you know that you would be able to pay that amount back or not. Always go for the amount that won't affect your budget and also not affect your credit score if you are default in payments.
  • Allows evaluating multiple schedules: EMI calculator also allows you to view the amortization schedules and EMIs for various combinations of loan tenures and interest rates, thus allowing you to choose the EMI that suit your repayment or servicing capabilities.

Car Loan Interest Calculator – Impact on EMI

Flat Rate method, Reducing Balance method and Zero Interest Scheme Illustrations:

Your loan EMI will be higher in case of loan on flat rate while EMI will be lower with reducing rate.

Flat interest rate: Here the interest is calculated on the original principal amount for the entire period. So, if you opt for a vehicle loan of ₹ 5 Lakhs at 10% flat rate of interest for a period of 5 years, the EMI will be ₹ 12,500. Here, the total interest per year will be 500,000* (10/100) = 50,000. Thus, total interest in 5 years = 50,000 * 5 = 250,000. This interest along with principal amount is distributed over the entire loan period to arrive at monthly EMI. Here the impact of repayment of capital is not considered. Before you decide your bank and rates, you must do complete market research to get the cheapest car loan rates.

Reducing balance method: In this method, the interest rate is charged only on the outstanding amount of the loan. Generally in this case the interest rate is higher than the flat rate but actually it may turn out to be cheaper as the interest is paid only on the remaining principal amount. Every month some part of EMI goes towards principal amount, thus the interest is charged on the remaining amount. Hence there will be a gradual reduction of the principal amount and as a result of the same, interest will be applicable on the lesser amount. So, if you opt for a vehicle loan of ₹ 5 Lakhs at 10% rate of interest for a period of 5 years, the EMI will be ₹ 10,624.

Zero interest schemes (also called 0% finance scheme): This is one of those free lunches that actually doesn’t exist. So, beware of schemes that claim to offer zero interest. It is likely that the car company is offering a subvention scheme whereby the interest is paid by it to the bank upfront. Now, you could always ask the car dealer for the same amount as a cash discount. It’s like padding up the price of the car for the interest amount and marketing it under a nice name.

Vehicle Loan Prepayment

Part prepayment is a huge amount that you pay before the due date of your EMI when you have surplus money with yourself. When you part prepay your loan, bank gives you two options

  • To reduce your EMI and keep the tenure same
  • To keep the EMI same and reduce your repayment tenure

The choice between the two options depends on your choice which is also a function of your repayment capacity on a monthly basis.

Car Loan EMI - Modes of Payment

  • The most convenient way of paying a vehicle loan EMI is by way of ECS mandate in favor of the bank from which the vehicle loan has been availed.
  • Note that it is not necessary to hold a bank account with the same bank. One can issue an ECS mandate from one’s salary account or normal bank account.
  • Key benefit of paying EMI through ECS is that there is no risk of cheque bouncing due to signature mismatch or any technical issue.
  • Other modes can include post dated cheques and payments by demand drafts, though these are rarely used nowadays.
Car Loan Repayment Tenure

Most of the banks offer car loan for a maximum period of 7 years. If you apply for longer repayment tenure, your EMI for car loan will be less. However, longer loan tenure increases the amount of interest payment which makes your car loan costly.

Monthly EMI

Monthly EMI depends upon your income and expenses. Generally, banks advise you to limit your EMI to 35% to 45% of your net income so that you can pay your EMI without any burden or difficulty. You can calculate your EMI online which will help you to know your repayment capacity.

Other Loan Calculators

FAQs

What is the lowest EMI offered on car loan?

Based on the comparison of longest tenure of 7 years and lowest rate of 9.25%, lowest car loan EMI per lakh loan amount is ₹ 1,622. Higher the loan amount, higher will be the EMI.

What if I miss EMI payment or there is an ECS bounce?

If you miss your EMI payment or if there is an ECS bounce then bank may charge a penalty. In addition, it will also be reflected in your CIBIL report and your CIBIL score may get impacted.

What if I get delay in paying the vehicle loan EMI?

Banks charges penalty for delaying EMI payment. The amount of penalty varies from bank to bank.

Why it is necessary to calculate EMI beforehand?

It is important to calculate your EMI in advance to maintain stability in future payments. When you avail car loan, you promise the bank to pay a fixed amount at fixed date every month. So, before availing the loan you should consider the stability of your income, monthly expenses and the existing loan obligations to avoid any discrepancies in future payments.

Does the loan tenure affect my EMI for car loan?

Car loan can be availed for maximum tenure of 7 years. Tenure affects your monthly EMI. Longer the tenure of car loan, lower will be your EMI.

How MyLoanCare EMI calculator helps in calculating EMI?

Car Loan EMI calculator of MyLoanCare calculates the EMIs of different banks as per the details entered by you. You can easily compare the EMIs and opt for the best option. You also get to know about the interest charged on loan amount entered.

What are two methods of paying car loan EMI? Which one is better?

Car loan EMI can be paid under two schemes:

  • EMI in arrears scheme – this is the standard method of paying EMI where the interest for a month (and principal repayment) is payable at or after the end of the month.
  • Advance EMI scheme – you pay interest and EMI at the beginning of the month. So, each month, you pay interest on amount that you have already repaid to the bank at the beginning of the month.

Note - In case your bank charges EMI in advance, the EMI amount should be about 1% lower than that in case of EMI in arrears. For those interested in more precise figures, EMI per Rs. one lakh loan amount on a 60 month car loan at 10% rate of interest as per EMI in arrears method comes to ₹ 2,125 while that as per EMI in advance method comes to ₹ 2,107

Is the car loan EMI fixed or can it change in future?

Here are some situations in which your EMI can change:

  • In case the floating rate of interest on your car loan increases, your bank will typically keep the EMI constant but increase the loan tenure. So, you will pay the same EMI but for a longer duration. However, in case the interest rates increase to an extent that the revised loan tenure is more than the maximum permissible by your bank, the bank may increase your EMI amount.
  • For partly disbursed loans availed under tranched EMI scheme, your loan EMI will increase with each disbursement.
  • When you make a prepayment of your loan, you can opt to either reduce the EMI and keep the loan tenure unchanged or keep the EMI unchanged and reduce the loan tenure. It is more beneficial to keep the EMI same and reduce the loan tenure.
    However, you may opt to reduce the EMI in case you desire so.
  • Any other situations as per terms and conditions of the loan agreement.

Car Loan Reviews 4.3/5  by 29 customers
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Car Loan News - Dec 2020
  • 2020-12-02 : PNB launched loan management solution to speed up delivery
    Punjab National Bank launched a tech-based loan management solution called LenS-The Lending Solution. It is aimed at speeding up and maintaining accuracy in online loan processing and sanctioning of credit proposals. It will be implemented in a phased manner for all kinds of loans including MSME, agriculture, retail and other credit.
  • 2020-11-27 : DHFL posts net loss of ₹2,122.65 crore
    DHFL reported a consolidated net loss of ₹2,122.65 crores in the second quarter of the fiscal against a net loss of ₹6,640.62 crores in the same period a year ago. DHFL reported a total income of ₹2,205.90 crores backed by retail loans like home, personal, car, two-wheeler and gold loans along with mudra and business loan.
  • 2020-11-27 : ESAF Bank opens 500th branch in Ahmadabad
    ESAF Bank opens 500th branch in Ahmadabad. The bank is aiming to offers equal opportunity for the whole society through universal access. It offers retail loans like home, personal, car, two-wheeler and gold loans along with mudra and business loan.
  • 2020-11-26 : Credit growth slows to 5.8% in the September quarter
    RBI reported that the credit growth which includes retail loans like home, personal, gold, two-wheeler and car loan along with business and mudra loan decelerated to 5.8% in the September quarter from 8.9% in the year-ago period. Further, deposits which include FD and RD increased by11% year-on-year in the July-September period as compared to 10.1% growth a year ago. The share of current account and saving account (CASA) in total deposits stood at 42.3% in September 2020 compared to 41.2% a year ago.
  • 2020-11-11 : Bank credit increases by 5.06%, deposits rise by 10.12%
    RBI reported that Bank credit which includes retail loans like home, personal, gold, car, two-wheeler, education and gold loans along with business and mudra loans by grew by 5.06% to Rs 103.39 lakh crore. Deposits which include Fixed and recurring deposits rose by 10.12% to Rs 142.92 lakh crore in the fortnight ended October 23.
*Terms and conditions apply. Credit at sole discretion of lender subject to credit appraisal, eligibility check, rates, charges and terms. Information displayed is indicative and from collected from public sources. Read More
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