Car Payment Calculator
A car payment calculator estimates your monthly loan payment by dividing the financed amount (price minus down payment) across the loan term with interest, so you can compare tenures and down payments and know your monthly cost before you buy.
verified_userReviewed by the Calculopedia editorial teamLast updated 2026-08-15
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quizExample
How this calculator works, with real numbers (no JavaScript needed):
Inputs
- Car price
- 800000
- Down payment
- 150000
- Annual interest rate
- 9.5
- Loan term
- 5
Results
- Monthly payment
- ₹13,651.21
- Amount financed
- ₹6,50,000
- Total interest
- ₹1,69,072.59
- Total cost of the car
- ₹9,69,072.59
functionsThe formula
A car loan works just like a home loan: you borrow a financed amount and repay it in fixed monthly payments (EMIs) that combine principal and interest. For most buyers it is not the showroom price that decides what you can afford — it is the monthly payment, because that is the number that has to fit into your budget month after month for years.
The formula
Monthly payment = P × r × (1 + r)ⁿ / ((1 + r)ⁿ − 1)
- P = financed amount = car price − down payment
- r = monthly interest rate (annual rate ÷ 12 ÷ 100)
- n = number of months (years × 12)
Worked example
For a ₹8,00,000 car with a ₹1,50,000 down payment:
- P = 8,00,000 − 1,50,000 = ₹6,50,000
- r = 9.5 ÷ 12 ÷ 100 = 0.0079167
- n = 5 × 12 = 60 months
- Payment = 6,50,000 × 0.0079167 × (1.0079167)⁶⁰ / ((1.0079167)⁶⁰ − 1) ≈ ₹13,651/month
Over 60 months that is about ₹8,19,073 in total, of which roughly ₹1,69,073 is interest. The total cost of the car — price plus interest — comes to about ₹9,69,073. The amortization schedule below the calculator shows the split month by month: early payments are mostly interest, and the principal share grows as the balance shrinks.
How tenure changes the deal
The same ₹6,50,000 financed at 9.5% across different terms:
| Term | Monthly payment | Total interest |
|---|---|---|
| 3 years | ₹20,821 | ₹99,571 |
| 5 years | ₹13,651 | ₹1,69,073 |
| 7 years | ₹10,624 | ₹2,42,381 |
The 7-year loan looks tempting at ₹10,600 per month, but it hands the lender an extra ₹73,000 over the 5-year option — on a car that is worth far less by then. Because cars depreciate fastest in their first three years, long tenures risk negative equity: you owe more than the car's resale value for the middle years of the loan.
A bigger down payment beats a slightly lower rate
- A bigger down payment reduces the amount financed and the interest immediately — often more effective than a slightly lower rate.
- Shorter terms cost less interest but raise the monthly payment. Find the balance that fits your budget.
- Dealers sometimes quote rates on the full invoice price; always calculate on the actual financed amount.
What the monthly payment does not include
This calculator covers principal and interest only. The real monthly cost of a car also includes insurance (car insurance premiums are a significant recurring cost), road tax and registration if financed, fuel or charging, and servicing. A common rule of thumb is that the all-in monthly cost is 1.3–1.5 times the pure EMI. Budgeting on the EMI alone is how buyers end up "car-poor".
helpFrequently asked questions
question_markHow is a car payment calculated?
Subtract your down payment from the car price to get the financed amount, then apply the EMI formula with your monthly interest rate and term: payment = P × r × (1 + r)ⁿ / ((1 + r)ⁿ − 1). On ₹6,50,000 financed at 9.5% over 5 years, that is about ₹13,651 per month.
question_markWhat is a good down payment for a car?
At least 20% of the car price is the common advice — it lowers your monthly payment and total interest, and helps avoid being "upside down" (owing more than the car is worth) in the early years of the loan.
question_markShould I choose a shorter or longer car loan?
A shorter loan means higher monthly payments but far less total interest. A longer loan lowers the monthly burden but costs more overall — on a five-year term you pay roughly ₹73,000 less interest than on a seven-year term for the same car. Compare the total cost, not just the monthly figure.
question_markDo car loan rates include fees?
No. The interest rate is separate from processing fees and insurance premiums. This calculator estimates principal and interest only — check the full loan offer for the all-in cost, and remember fuel, insurance and servicing sit on top of the EMI.