₹15 lakh car loan EMI: why 7 years costs you over ₹5.5 lakh

Borrow ₹15 lakh for a car at 9.5% and your EMI for 5 years is ₹31,503. Interest adds ₹3,90,168, taking the total to ₹18,90,168. The 9.5% here is an example. Lenders price each loan on your credit score and profile.

₹15 lakh buys a well-loaded SUV, and that is where dealers often push a 7-year loan to make the EMI look easy. Dr. Sneha, a dentist in Indore, was shown ₹24,516 a month and almost signed. Then she asked for the total repayment, and that number changed her mind.

₹

= ₹15,00,000 (15 lakh)

%

years

Monthly EMI

₹31,503

  • Principal 79.4%
  • Interest 20.6%
Principal amount
₹15,00,000
Total interest
₹3,90,168
Total amount payable
₹18,90,168
Interest as % of loan
26.01%
  • Processing fees, insurance and rate changes on floating loans are not included.

The same amount over different periods

Loan tenure Monthly EMITotal interestTotal amount payable
3 years ₹48,049₹2,29,779₹17,29,779
4 years ₹37,685₹3,08,866₹18,08,866
5 years ₹31,503₹3,90,168₹18,90,168
7 years ₹24,516₹5,59,342₹20,59,342

Worked out at 9.5% a year. The row in bold is the one in the calculator above.

Repayment schedule (yearly)

YearPrincipal paidInterest paidTotal paidBalance left
1₹2,46,065₹1,31,969₹3,78,034₹12,53,935
2₹2,70,486₹1,07,548₹3,78,034₹9,83,450
3₹2,97,331₹80,703₹3,78,034₹6,86,119
4₹3,26,840₹51,193₹3,78,034₹3,59,278
5₹3,59,278₹18,755₹3,78,034₹0

The 7-year trap on a big car loan

At 7 years, you repay ₹20,59,342 for a ₹15 lakh loan. Interest of ₹5,59,342 is more than a third of what you borrowed. A 3-year loan costs ₹2,29,779 in interest, so the long loan costs about ₹3.3 lakh more.

There is a second problem. A car loses value every year, and by year six or seven you may still owe EMIs on a car worth far less than when you bought it. If 5 years feels tight, consider a smaller loan rather than a longer one.

Frequently asked questions

What is the EMI for a ₹15 lakh car loan for 5 years?

At 9.5%, it is ₹31,503 a month for 60 months. Total interest is ₹3,90,168 and you repay ₹18,90,168. Interest is 26.01% of the loan amount.

How much is a ₹15 lakh car loan EMI for 3 years?

The EMI is ₹48,049 at 9.5%. That is high, but interest is just ₹2,29,779, about 15.32% of the loan, and the car is fully yours in 36 months.

What do I save with 4 years instead of 7?

The 4-year EMI is ₹37,685 against ₹24,516 for 7 years, so ₹13,169 more each month. Interest drops from ₹5,59,342 to ₹3,08,866, a saving of ₹2,50,476.

Will my ₹15 lakh car loan EMI be exactly ₹31,503?

Only if your rate is 9.5%. This page uses 9.5% as an example. Enter the rate your lender quotes in the calculator above, since even a small difference changes the EMI and the interest over 60 months.

Open the Car Loan EMI Calculator with your own numbers →

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