Car Loan EMI Guide: Compare ₹5L, ₹7L & ₹10L Options at 10% Interest

Planning to buy a car and thinking of financing it with a loan? Understanding how much you’ll pay in Equated Monthly Installments (EMIs) can help you plan better. In this article, we’ll break down the EMI and total interest cost for car loans of ₹5 lakh, ₹7 lakh, and ₹10 lakh at a 10% annual interest rate over a 5-year tenure. 

Loan Parameters Used for Comparison 

• Interest Rate: 10% per annum 

• Tenure: 5 years (60 months) 

• Loan Amounts Compared: ₹5 lakh, ₹7 lakh, and ₹10 lakh 

EMI Calculations 

Let’s use an EMI calculator and understand the monthly EMI you’ll need to pay for each loan amount.

Breakdown 

₹5 Lakh Loan 

A ₹5 lakh loan can be ideal for entry-level hatchbacks or situations where you’ve already made a large down payment. With an EMI of ₹10,624 per month, it offers a manageable repayment structure for salaried individuals or first-time car buyers.  

Over 5 years, the total interest payout comes to around ₹1.37 lakh, taking your total repayment to ₹6.37 lakh. This option can be suitable for those looking to keep EMIs low and stay within a modest monthly budget. 

₹7 Lakh Loan 

If you’re aiming for a compact SUV or a well-equipped sedan, a ₹7 lakh loan could be your go-to. The monthly EMI here stands at ₹14,873, which balances comfort and affordability. The total interest you’ll pay over 5 years is ~₹1.92 lakh, making the total repayment ₹8.92 lakh.  

This loan amount can work for small families or buyers upgrading from a two-wheeler, providing more space and features without significantly increasing financial stress. 

₹10 Lakh Loan 

For those eyeing premium hatchbacks, larger SUVs, or entry-level sedans with advanced features, a ₹10 lakh loan can offer the necessary flexibility. With an EMI of ₹21,247, it’s on the higher side but can be justified if the vehicle is intended for long-term use or family travel. The total interest over 5 years adds up to ~₹2.74 lakh, bringing the full repayment amount to ₹12.74 lakh.  

This option can be for individuals with stable incomes who prioritise comfort, technology, and safety in their purchase. 

Also Read: Planning a Trip? ₹75,000 vs ₹1.5 Lakh Personal Loan at 12% – Which Suits You Better? 

Conclusion 

Car loans can make owning a vehicle easier, but smart planning can save you thousands in the long run. Whether you’re opting for a ₹5 lakh or ₹10 lakh loan, understanding your EMI burden upfront helps you budget effectively. Remember to also factor in insurance, fuel, maintenance, and registration costs as part of your ownership expense. Use EMI calculators and consult with multiple lenders to make an informed, cost-effective decision. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.