Car loan EMI calculator
Free, no sign-up · Facts checked 18 Oct 2026
Car loan EMI from the on-road price, the car's value vs what you owe, true cost.
1₹8 lakh car · 20% down · 9% · 5 years
Monthly EMI₹15,843- On-road price
- ₹9,54,000
- Loan amount
- ₹7,63,200
Work it out
Monthly EMI
₹15,843
for 5 years · ₹9.54 lakh on the road
A car of ₹8,00,000 costs ₹9,54,000 on the road; with ₹1,90,800 down, the loan of ₹7,63,200 at 9% for 5 years has an EMI of ₹15,843.
- On-road price
- ₹9,54,000
- Loan amount
- ₹7,63,200
- Total interest
- ₹1,87,367
- Down payment
- ₹1,90,800
Road tax, insurance and extras add ₹1.54 lakh to the showroom price, and they lose all their value on day one.
What you owe vs what the car is worth
Where the loan line is above the car’s value, you owe more than the car would sell for.
What the on-road price is made of
Point at a part to see it on its own.
- Ex-showroom
- Road tax
- Insurance
- Registration and extras
From your numbers
Worked out from what you entered. Try one.
- 4 years instead of 5 years: EMI ₹18,992, and ₹38,938 less interest.
- One extra EMI a year saves ₹15,146 and ends 4 months sooner.
Milestones
When the loan crosses each mark.
- Half repaidyear 3
- Loan-freeyear 5
Shorter or longer
Total interest for the same loan over 3, 5 and 7 years.
A longer loan lowers the EMI but keeps you in the gap longer.
Year by year
Always open. Point at a row to find it on the chart.
| Year | Paid | Interest | Still owed | Car’s value |
|---|---|---|---|---|
| Year 1 | ₹1,90,113 | ₹63,552 | ₹6,36,639 | ₹6,80,000 |
| Year 2 | ₹1,90,113 | ₹51,680 | ₹4,98,205 | ₹6,12,000 |
| Year 3 | ₹1,90,113 | ₹38,693 | ₹3,46,785 | ₹5,50,800 |
| Year 4 | ₹1,90,113 | ₹24,489 | ₹1,81,161 | ₹4,95,720 |
| Year 5 | ₹1,90,113 | ₹8,953 | ₹0 | ₹4,46,148 |
Full breakdown
- On-road price
- ₹9,54,000
- Loan amount
- ₹7,63,200
- Total interest
- ₹1,87,367
- Down payment
- ₹1,90,800
- Road tax
- ₹1,04,000
Guide
Start from the on-road price
The price in the showroom ad is the ex-showroom price, GST included. What you pay to drive out is the on-road price: ex-showroom plus the one-time road tax, the first insurance and registration, number plates, FASTag and any accessories or extended warranty. Banks lend on the on-road price, so this calculator builds it for you: type the ex-showroom price, your down payment, the rate and the years. It assumes a new car with Tamil Nadu road tax and typical insurance and extras; turn on On-road price to change those or pick a used car.
In Tamil Nadu, road tax on a new car depends on its price: 12% under ₹5 lakh, 13% up to ₹10 lakh, 18% up to ₹20 lakh and 20% above (rates in force since 9 November 2023; check your RTO). Other states charge their own rates: turn on On-road price, pick My state % and type yours. A used car pays no new road tax, only a transfer fee.
Shankaran Pillai's first car
Shankaran Pillai runs a medical shop in Kallakurichi and wants an ₹8 lakh car. He pays 20% down and takes a 9% loan for 5 years.
| Part of the cost | Amount |
|---|---|
| Ex-showroom price | ₹8,00,000 |
| Road tax at 13% | ₹1,04,000 |
| Insurance, registration and extras | ₹50,000 |
| On-road price | ₹9,54,000 |
| Down payment (20%) | ₹1,90,800 |
| Loan and EMI | ₹7,63,200 at ₹15,843 a month |
| Total interest over 5 years | about ₹1.87 lakh |
With 20% down, his loan stays below the car's value from the first year. If he had paid 10% down over 7 years, he would owe more than the car is worth for the first years: turn the numbers yourself and watch the chart.
What the car is worth
A new car loses about 15% of its value in the first year and around 10% a year after that (a common rule of thumb; real resale depends on the model and its condition). Only the ex-showroom part holds value; the road tax and insurance are spent on day one. The chart puts the car's value beside what you still owe. Where the loan line is higher, you are in the gap: selling the car would not clear the loan.
The 20/4/10 rule of thumb
A popular guide for buying a car within your means: put down at least 20%, borrow for at most 4 years, and keep the car EMI (and ideally fuel) within 10% of your take-home pay. It is a rule of thumb, not a bank rule; banks often lend more. Pick My income to see the car this rule allows.
The true monthly cost
The EMI is only part of owning a car. Turn on Running costs to add fuel, service and insurance renewal and see what the car really costs every month.
Dealer flat rates
Dealers sometimes quote a flat rate: interest on the full loan for the whole term, even as you repay it. A flat 5% over 5 years is about 9.15% on a reducing balance, the way banks quote. Turn on Dealer's flat rate to convert any quote.
Paying early
Paying one extra EMI a year can shorten a car loan by months. Many car loans are fixed-rate; RBI rules bar prepayment charges on floating-rate loans to individuals, but fixed-rate loans may carry one, so ask your lender before you pay early.
Common mistakes
- Comparing ex-showroom prices only. Two cars a few thousand apart in the showroom can differ much more on the road because of the tax slab.
- Stretching to 7 years. The EMI looks small, but you stay in the gap longer and pay more interest.
- Forgetting running costs. Fuel and service can add half the EMI again every month.
- Accepting a flat rate as it is. Always convert it before comparing with a bank.
A short checklist
- Ask the dealer for an itemised on-road quote.
- Compare a bank loan with dealer finance on the real rate.
- Put down at least 20% if you can, and keep the term short.
- Check the prepayment terms before you sign.
Taxes, rates and dealer charges change; check the current figures with the dealer, your bank and the RTO. This is a guide, not advice.
Sources
Facts checked 18 Oct 2026TSTamil Nadu implements fresh life tax rates for vehicles from November 9, 2023 · Taxscan (secondary: no official Transport Department page with the slabs)2023
Secondary: Tamil Nadu road (life) tax on new cars is 12% under ₹5 lakh, 13% up to ₹10 lakh, 18% up to ₹20 lakh and 20% above, from 9 November 2023. 10 Nov 2023
RBIReserve Bank of India (Pre-payment Charges on Loans) Directions, 2025 (RBI/2025-26/64) · Reserve Bank of India2025
No pre-payment charge on floating-rate loans to individuals for non-business use from 1 January 2026; fixed-rate loans are not covered by that rule. 2 Jul 2025
RBIKey Facts Statement (KFS) for Loans & Advances (RBI/2024-25/18) · Reserve Bank of India2024
Lenders must state the APR, the all-in yearly cost, in the Key Facts Statement, which is how a dealer's flat rate can be compared. 15 Apr 2024
Questions
Is a car loan given on the ex-showroom or on-road price?
Most banks lend on the on-road price, up to about 80–90% of it for a new car. This calculator works on the on-road price.
How is road tax worked out in Tamil Nadu?
As a one-time percentage of the price: 12% under ₹5 lakh, 13% up to ₹10 lakh, 18% up to ₹20 lakh and 20% above, in force since 9 November 2023. Check your RTO for the current rate.
What is the 20/4/10 rule for buying a car?
At least 20% down, a loan of at most 4 years, and the car EMI within 10% of your take-home pay. It is a rule of thumb for staying comfortable, not a lender's rule.
Why do I owe more than my car is worth?
A new car loses value fastest in the first years, while a loan with a small down payment shrinks slowly at first. A bigger down payment or a shorter loan closes the gap.
Can I prepay a car loan without a charge?
Floating-rate loans to individuals cannot carry a prepayment charge under RBI rules, but many car loans are fixed-rate. Check your loan agreement.
What does a flat rate of 5% really mean?
On a 5-year loan it equals about 9.15% a year on a reducing balance, because interest is charged on the full loan for the whole term.
Reviewed by S. Anand Kumar · Updated 22 Oct 2026