A car loan EMI depends on the amount financed after the down payment, the interest rate and the tenure, typically three to seven years. Enter those three figures to see the monthly instalment, the total interest and the schedule. Vehicle loans are cheaper than personal loans because the car is security, but a long tenure on a depreciating asset means you can owe more than the car is worth for years.
Compare offers on total interest, and check whether the quoted rate is flat or reducing: a flat 8% is closer to 14.5% on a reducing basis.
Loan and EMI Calculator
A fixed-rate loan is repaid in equal monthly instalments, called EMIs in many markets. Each payment covers that month's interest first and puts the remainder toward the balance, so early payments are mostly interest and late payments are mostly principal. The loan calculator shows the monthly payment, the total interest over the life of the loan, the payoff date and a year-by-year schedule; switch to the monthly view to see every payment.
Borrowing $25,000 over five years at 7.5% costs about $501 a month and roughly $5,057 in interest. Add an extra $100 a month and the calculator recomputes the schedule: the loan is paid off about eleven months sooner and the interest bill falls by around $1,000. The figures assume monthly compounding and no fees; your lender's quote may differ slightly because of rounding, fees or a different day-count convention.
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Frequently Asked Questions
What tenure should I choose?
The shortest you can afford. Cars lose value quickly; a five-year loan keeps the balance below the car's value for most of the term, a seven-year loan often does not.
Is the dealer rate flat or reducing?
Ask. Dealers often quote flat rates, which understate the true cost. Use the flat-vs-reducing calculator to convert.
Can I prepay a car loan?
Usually, sometimes with a small charge. Enter an extra payment to see the interest saved.
