Car Loan Calculator
Securing a car loan in India requires careful planning. By understanding how your down payment and processing fees impact your monthly EMI (Equated Monthly Instalment), you make a smarter financial decision.
Car Loan Calculator
Calculate your monthly costs and early exit penalties.
Plan an Early Exit?
Monthly EMI
Early Exit Summary
The Breakdown
Strategies for Better Financing
1
Increase Your Deposit
Lower the initial loan amount to reduce total interest. A 20-30% down payment often secures more competitive interest rates from lenders.
2
Shorten the Term
While a 7-year loan offers a lower EMI, you pay significantly more in interest. Aim for a 3 to 5-year term to keep total costs down.
3
Review Credit Health
Check your credit report for errors. Improving your score by even 50 points can save you thousands in interest charges over time.
Don't Forget the Hidden Costs
The car price and loan EMI are only part of the story. Factor in these recurring expenses to understand your true monthly commitment.
Annual Insurance:
Maintenance & Servicing:
Depreciation
A new car loses roughly 15-20% of its value the moment you drive it away. This matters if you plan to sell within 3 years.
Essential Car Loan FAQ
What is a Processing Fee?
Banks charge this one-time fee to cover the administrative costs of handling your loan application. Note that GST (usually 18%) often applies to this fee, which this calculator includes automatically.
How does 'Foreclosure' work?
Foreclosure involves paying off the entire remaining loan amount before the agreed term ends. While this saves you from future interest, banks often charge an exit penalty (0.4-5%) on the outstanding principal to recoup some lost profits.
Does my credit score affect the rate?
Yes. Lenders use your credit history to determine risk. A higher score typically secures lower interest rates, while a lower score might result in higher rates or even application rejection.
Should I choose a longer term?
A longer loan term (e.g., 7 years) reduces your monthly EMI, making it easier on your wallet today. However, you will end up paying significantly more in total interest over the life of the loan.
Can I reduce my total interest?
Increasing your down payment or choosing a shorter loan term are the most effective ways to lower the total interest paid to the bank.
Fixed vs. Floating Interest Rates?
Fixed rates stay the same throughout the loan, offering predictable payments. Floating rates change based on market conditions, meaning your EMI could rise or fall in the future.