Car loan EMI calculator
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A car loan is short, secured against a depreciating asset, and usually carries a prepayment charge — three facts that make it behave very differently from a mortgage. The short term keeps the total interest modest even at a higher rate, which is why comparing a car loan's rate against a home loan's is misleading.
What this product looks like
| Typical rate | 8% – 14% |
|---|---|
| Typical term | 1–7 years |
| Maximum loan-to-value | 85% |
| Prepayment charge | About 3% of the amount prepaid |
| Interest usually deductible | No |
A worked example
A $250,000 Car loan at a typical 9.75% over 5 years:
| Monthly instalment | $5,281 |
|---|---|
| Total interest | $66,864 |
| Total repaid | $316,864 |
| Income needed | $10,562 |
What to watch
Because the car loses value faster than the loan amortises in the early years, you can owe more than it is worth for much of the first half. That matters if you plan to sell or if it is written off — gap cover exists for exactly this.
Questions
What is the EMI on a car loan?
On a $250,000 loan at a typical 9.75% over 5 years, about $5,281 a month and $66,864 of interest in total. Shorter terms raise the payment and cut the interest sharply.
Should I take the longest car loan available?
Usually not. A longer term on a depreciating asset extends the period in which you owe more than the car is worth, and the interest saving from a shorter term is large relative to the loan.
Can I prepay a car loan?
Yes, but a charge of around two to four per cent of the amount prepaid usually applies, because these are typically fixed-rate loans. Work out the saving net of that charge before paying early.
Rate bands and lending rules on this page were last reviewed on 2026-10-23 and are indicative, not offers. The arithmetic is produced by the same code the calculator runs. Confirm the terms with your own lender before committing; nothing here is financial advice.