Key Takeaway
Car loans in India range from 7.5% to 14% interest. A ₹8 lakh car loan at 9% for 5 years costs ₹16,607/month. Always compare the ex-showroom + on-road price gap before finalizing the loan amount.
Car Loan Cost Details:
- Loan Principal (Financed amount): ₹8,00,000.
- One-time upfront down payment: ₹2,00,000.
- Bank loan processing fees: ₹5,000.
- 💡 Tip: You can switch to **EMI in Advance** to save interest by paying the first installment on delivery.
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Frequently Asked Questions
What is the difference between Advance and Arrears EMIs?
In Advance EMI, the first installment is paid upfront at the time of loan signing, effectively reducing your loan principal. In Arrears EMI, the first payment is made at the end of the first month.
Which is better: Advance or Arrears EMI?
Advance EMI is cheaper in terms of interest because it reduces the interest-earning principal on day one. However, Arrears EMI is preferred if you want to preserve your cash flow during delivery.
What are the common fees in car loans?
Car loans typically attract processing fees (0.5-2%), stamp duty, documentation charges, and foreclosure penalties if you close the loan early.
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