Estimate your monthly car loan payment after a down payment.
Loan amount = car price − down payment. The rest uses the standard amortization formula, same as a mortgage but for shorter, auto-loan terms.
The single most common mistake in car loan planning is calculating affordability against the ex-showroom price when the actual cost of driving the car home — on-road price — is 10-15% higher once RTO registration, road tax, insurance, and handling charges are added. A loan sized to the ex-showroom figure alone usually leaves a gap the buyer ends up covering with a hastily arranged personal loan at a much worse rate, or simply underinsures the vehicle to save cash. As of early-to-mid 2026, new car loan rates from public-sector banks start around 7.35-7.45% (Union Bank, Canara, Bank of Maharashtra among the cheapest), private banks like HDFC and ICICI typically run 8.2-8.5% onwards, and NBFCs — who take on buyers with thinner credit files — charge 10-18%, especially on used cars.
A bigger down payment does more than lower the EMI: it directly reduces the interest paid over the loan's life, since interest is calculated on the reducing outstanding balance, not the original price. Most lenders finance 80-90% of on-road price, so treat the remaining 10-20% as a hard minimum to have ready, not an optional extra — a thin down payment is also one of the fastest ways to end up "upside down" (owing more than the car is worth) in the first year or two, since new cars depreciate fastest right after purchase.
On-road price — it includes RTO registration, road tax, and mandatory insurance, which together typically add 10-15% over the ex-showroom figure. Sizing the loan to ex-showroom price alone is the most common reason buyers come up short at the dealership.
Public-sector banks currently offer the cheapest new-car rates (from roughly 7.35-7.45% in early-to-mid 2026), private banks sit somewhat higher (around 8.2-8.5% onwards), and NBFCs charge the most (often 10-18%, especially for used cars) because they typically serve buyers with weaker credit profiles who cannot get approved at a bank's best rate.
Not automatically wrong, but it always means paying more total interest for the same loan amount and rate, since interest accrues on the outstanding balance for longer. A longer tenure can be a reasonable trade-off for lower monthly strain, but it should be a deliberate choice, not a default.
Both — a larger down payment reduces the principal the loan is calculated on, which lowers both the monthly EMI and the total interest paid over the loan's life, since interest is charged on a reducing balance. It also reduces the risk of owing more than the car is worth in the first year or two, when depreciation is steepest.