About this calculator
A larger down payment or shorter tenure cuts the interest. A common rule is to keep the car EMI within about 15% of your monthly take-home pay.
How to use it
- Enter the on-road price and down payment.
- Enter the interest rate and tenure.
- Read the EMI and the total cost.
The formula
- P
- loan amount
- r
- monthly interest rate: yearly rate ÷ 12 ÷ 100
- n
- number of monthly instalments
Worked example
₹10 lakh car, ₹2 lakh down, 9% for 5 years
- Loan = ₹8 lakh; EMI = ₹16,607.
- Interest = ₹1.96 lakh, so the car costs ₹11.96 lakh in all.
What the result means
A car loses value every year, so a 7-year loan can leave you owing more than the car is worth for a while.
Assumptions
- A fixed interest rate on the reducing balance.
Limitations
- Insurance renewals, fuel and maintenance are not included.
Frequently asked questions
How much down payment should I make?
At least 20% is a good target. Lenders may fund up to 90% or even 100% of the on-road price, at a higher cost to you.
What tenure is best?
Three to five years suits most buyers. Longer tenures lower the EMI but raise the interest.
What is the 20/4/10 rule?
20% down, a loan of 4 years or less, and total car costs within 10% of income. It is a cautious guide, not a rule.
For information only. This calculator gives estimates based on the figures you enter and the assumptions listed above. It is not financial advice. Actual amounts depend on the lender’s or institution’s terms, fees, rounding and rate changes. Please confirm with them before you decide.
Last reviewed on 7 October 2026. Found a mistake? Tell us.

