Guides / Car Loan Tips: EMI, Tenure and Total Cost
Car Loan Tips: EMI, Tenure and Total Cost
1 Oct 2026A car loses value quickly, so it pays to keep the loan short and small.
₹10 lakh at 9%
| Tenure | EMI | Total interest |
|---|---|---|
| 3 years | ₹31,800 | ₹1.45 lakh |
| 5 years | ₹20,758 | ₹2.46 lakh |
| 7 years | ₹16,089 | ₹3.51 lakh |
A 7-year loan has the lowest EMI but costs about ₹2 lakh more in interest than a 3-year loan. Try your own amounts in the Car Loan EMI Calculator.
A popular rule of thumb: 20/4/10
- Put 20% down.
- Keep the loan to 4 years or less.
- Keep your total car costs under 10% of your income.
It is a guide and not a law, but it keeps you from overspending.
Tips
- Compare rates from banks and the dealer.
- Ask about processing fees and prepayment charges.
- Remember insurance, fuel, maintenance and parking.
- Do not let a low EMI push you into a car you cannot afford.