About the Car Loan Calculator
A car loan is usually arranged quickly, often at the dealership, which is exactly why it pays to check the numbers yourself before you sign. This calculator works out your monthly EMI, total interest and full cost for a new or used car loan, on either a reducing-balance or flat-rate basis, so you can see the real cost behind a dealer-quoted rate.
Who should use this calculator
Anyone buying a new or used car on finance, anyone comparing a dealer's in-house finance offer against a bank or NBFC loan, and anyone deciding how much down payment to put in to keep the EMI comfortable.
Car loan interest rates in India
Car loan rates in India typically range from about 8.5% to 15% per year, depending on whether the car is new or used, your credit score and the lender. New-car loans are usually at the lower end of that range; used-car loans run higher because the vehicle is worth less as security. A word of caution: some used-car and dealer-arranged finance is quoted as a flat rate rather than a reducing-balance rate. A 10% flat rate costs about the same as a 17% reducing-balance rate, so always ask which basis you are being quoted and use the calculator above to check it.
Documents required for a car loan
- PAN card and a valid identity and address proof
- Income documents, salary slips or ITR
- Bank statements for the last three to six months
- Vehicle quotation or proforma invoice from the dealer
- A valid driving licence
Tips to get your car loan approved faster
- Put in a larger down payment. It lowers both your EMI and your total interest, and improves approval odds.
- Compare the reducing-balance rate, not the EMI alone. Two loans with the same EMI can cost very different amounts in total interest.
- Check what is bundled into the loan, insurance, extended warranty and accessories are sometimes financed too, quietly increasing the amount you borrow.
- Ask about foreclosure charges before you sign, in case you want to prepay later.
Want a second opinion on a dealer's finance offer before you sign? A Kaithi Finance loan expert can check the real cost for you on WhatsApp, free of charge.
Car loan interest rates in India (September 2026)
A car loan is secured by hypothecation of the vehicle, so rates sit well below personal-loan territory. Used-car finance is priced several points higher than new-car finance, and dealer -arranged loans are frequently quoted on a flat-rate basis that hides the true cost.
| Lender type | Typical rate (p.a.) | Typical max tenure | Best suited to |
|---|---|---|---|
| Public sector banks | 8.50% – 9.75% | 7 years | New cars, salaried borrowers |
| Private banks | 9.00% – 11.50% | 7 years | Faster approval at the dealership |
| NBFCs | 11.00% – 15.00% | 5–7 years | Used cars, self-employed |
| Used-car specialists | 13.00% – 18.00% | 5 years | Older vehicles banks decline |
Indicative ranges as of September 2026, compiled from publicly advertised lender pricing. Rates are personalised to your credit score, income and loan-to-value, and change without notice. Always confirm the current rate, spread and reset frequency in your lender's Key Fact Statement before signing.
Car loan EMI per ₹1 lakh
Multiply the figure below by your loan amount in lakhs to get a quick EMI estimate, a ₹25 lakh loan is simply 25 × the per-lakh EMI. Use the calculator above for the exact figure including processing fees.
| Rate (p.a.) | 3 yr | 5 yr | 7 yr |
|---|---|---|---|
| 9% | ₹3,180 | ₹2,076 | ₹1,609 |
| 10% | ₹3,227 | ₹2,125 | ₹1,660 |
| 11% | ₹3,274 | ₹2,174 | ₹1,712 |
| 12% | ₹3,321 | ₹2,224 | ₹1,765 |
| 13% | ₹3,369 | ₹2,275 | ₹1,819 |
Before you apply, worth checking
- our car loan guide, how to tell a flat rate from a reducing-balance quote at the dealership.
- what you can comfortably afford, before you commit to a variant at the showroom.
- the two-wheeler loan calculator, for a bike or scooter instead.
Frequently asked questions
What is a good interest rate for a car loan in India?
Car loan rates in India typically range from about 8.5% to 15% per year. New-car loans from banks are usually at the lower end; used-car and dealer-arranged finance tends to be higher.
Is a car loan quoted at a flat rate more expensive?
Yes. A flat rate is charged on the full original amount for the whole tenure, so it costs far more than the same percentage on a reducing balance. A 10% flat rate costs about the same as a 17% reducing-balance rate, use the calculator above to check any quote.
Can I get help comparing car loan offers?
Yes. Message Kaithi Finance on WhatsApp with the offers you have received and we will help you work out which one is genuinely cheapest.
What is the EMI for a ₹10 lakh car loan for 5 years?
At 10% per annum over 5 years, a ₹10,00,000 car loan has an EMI of about ₹21,247 and total interest of roughly ₹2,74,800. Stretching the same loan to 7 years cuts the EMI but adds substantially to total interest.
Should I take the dealer's finance or arrange my own?
Dealer-arranged finance is convenient but rarely the cheapest, and it is often quoted on a flat-rate basis that makes the rate look about half its true reducing-balance equivalent. Get at least one bank quote before signing at the showroom, and compare on EMI and total interest, never on the quoted rate alone.
What is the difference between flat rate and reducing balance on a car loan?
A flat rate charges interest on the full original amount for the whole tenure; a reducing-balance rate charges only on the outstanding balance. A 7% flat rate is roughly equivalent to 13% reducing balance. This calculator handles both, switch the method to see the same loan priced each way.
How much down payment do I need for a car loan?
Most lenders finance 80–90% of the on-road price for a new car and 70–80% for a used one, so plan for a 10–20% down payment. A larger down payment reduces both the EMI and the total interest, and sometimes earns a better rate.
Is a used car loan more expensive?
Yes, typically 2–5 percentage points higher than new-car finance, with shorter maximum tenures, because the collateral depreciates faster and is harder to value. Vehicles older than 7–8 years are often declined by banks entirely.