Car Loan Eligibility Calculator Dec, 2018

Want to check eligibility for car loan ? Use this tool - enter your salary, other EMIs you pay & find the amount of Car Loan you can get.
Net Income in Rs./pm you get
Tenure of Loan (In Years)
Interest Rate
Other EMI you pay

You Can Get a Car Loan Of at an EMI of


You have decided to purchase a new car for yourself. Do you have all the money to do it? Probably not!

Here comes the next step. You go in for a loan. A Car Loan!!

You can borrow 48-50 times more than the monthly instalment you can pay. Simply means if you can afford to pay around Rs.20000 in EMIs every month for a Car Loan, you can get Car Loan of Rs.9.5-10lacs. How the Banks figure out how much you are eligible for – continue reading for car loan eligibility calculator.

Planning to buy a new home? Quickly check your Home Loan Eligibility

What is a Car Loan

Everybody knows that Car Loan refers to the money you borrow from the Bank (or any other Financial Institution) to purchase a new car for yourself.
Now will the Bank just give you the money for buying car. They would first assess you thoroughly and based on certain criteria only they would lend you the money as car loan.
Banks typically look towards following 2 things before they offer a car loan:
1. Eligibility of the Car
2. Eligibility of the person taking the loan
Having calculated both, they offer the LEAST of the two. Yes, least of the two.
We will not concern ourselves with the Eligibility of the car as of now but we would focus on Eligibility of the person. The individual/person taking the loan could be salaried person or self-employed person. The Banks assess them differently.

SALARIED person:

Eligibility calculation for salaried person is very simple. The Banks see the salary you are getting every month. They have a thumb rule that the person can afford to pay about 50% of his salary as EMIs. So if you are earning Rs.60000 per month, the Banks believe you can afford to pay around Rs.30000 as EMIs every month. This could be plus or minus 5%. This figure in our example so arrived is checked against any EMIs you are paying. If you are, the EMIs are deducted from this figure of Rs.30000 so arrived. Say you are paying a Personal Loan EMI of Rs.10000 per month, your eligibility would be calculated on your capacity to pay Rs.20000 as EMIs. This roughly works out to Rs.9.5-10 lacs of loan for 5 years. In case you wish to get higher loan amount, you would have to get a co-borrower whose income can be added to your income.

Self Employed Person:

Eligibility calculation for a self-employed person starts from Net profit his firm is making. To that gets added depreciation, salaries paid to director/partner, income showed in ITR (if separate from business) of individual (income apart from salary drawn).This is divided by 12. Most Banks will consider 80-100% of this amount as the amount of EMI which can be paid. Any existing EMIs being paid monthly are deducted. A reverse calculation is worked out – remember as a thumb rule we can multiply it with 105 also to get loan amount we are eligible for, for a loan of 20 years. In case you wish to get higher loan amount, you would have to get a co-borrower whose income can be added to your income.

Apart from this, Banks also check out your total work (business) experience, experience with current employer (business), your stability at a residence & certain other subjective factors to take a call on your eligibility.

You can use this calculator to find out car loan eligibility for yourself. Then you can choose from the best offers available from the site & go for the lowest interest best car finance for your next car purchase.

The need for this Car Loan Eligibility Calculator

Financial Calculations are not so easy to understand. This Car Loan Eligibility Calculator allows you to figure out for yourself how much car loan you can be eligible for given your salary, tenure of loan you are looking at and other EMIs that you are already paying. Try it out & give us your feedback.

How to use this calculator

Just going through the formalities, I will now tell you how to use this auto loan eligibility calculator.

NET INCOME IN RS. PER MONTH YOU GET: Enter your salary in Rs. Per month that you get. Please enter the Net Salary you receive every month.

TENURE OF LOAN IN YEARS: Here you select the tenure of the loan you feel is comfortable for you – 3 years or5 years. We have put the default value at 5 years which is what mostly the vehicle owners go for whenever they are taking a car loan.

INETREST RATE: Enter here the current offer in the market for the best interest rate. You can check offers on our site to enter the new interest rate. Default value we have put here is 10% which we believe is much closer to the prevailing interest rates in the market.

OTHER EMI YOU PAY: You have to enter here what all other EMIs you are paying in total for the other loans you are running.

What you get as an answer is the amount of Car Loan you are eligible for getting from the Banks. This is just a good approximation. The final thing depends on the Banks that are approached. If you would look around slightly on this page, you can find offers on Car Loans. Choose from one of them, get door-step service & save money. Then go on a long drive for a holiday and make your family happy.

Car Loan EMI & working explained in detail

What is an EMI:

Banks have way of calculating how much exactly you have to pay them back. It should be simple for you as well. So they kept it simple. You pay SAME AMOUNT every month so that it is easier for you to follow. This is called EMI – EQUATED MONTHLY INSTALMENT. EQUATED because it is EQUAL/SAME every month. MONTHLY because you have to pay MONTHLY. INSTALMENT – because it is paid every month regularly. What is simple in the foreground has to be complex in the background. EMI is made of Principal component & an interest component calculated monthly. Every EMI (mind it – there are 240 EMIs in a 20-year loan) has different principal & different interest component every month. The principal component increases every month & the interest component decreases every month. But both put together result in same EMI every month. Don’t be a hero – use PMT function in excel to compute it.

Reducing Balance:

It is a term used but not understood well. It is also very simple. It means that banks will charge interest on the loan amount outstanding. Remember we told you about EMI made of principal component and interest component. Well the principal component that the Bank recovers every month from your EMI reduced the loan amount outstanding. The next month’s interest is levied on that and hence the name Reducing Balance. Some people don’t understand this so they do it in a simple way. Total all the EMIs they have to pay, subtract the principal from that –they get the interest portion. This interest portion they divide the loan tenure (in years). The result which they get – they divide by loan amount & they get an interest rate. If you wouldn’t have already guessed, the interest rate so arrived is less than the actual loan rate. Why? That’s another story – it’s because Banks take money from you every month. So what? Forget it!!

Car Loan explained in detail

This is going to get technical. Don’t tell me I didn’t warn you! However, there are a few things that you need to know.

Ex-showroom & On-Road Price

I am sure if you have reached till here in the article, you already know the difference between ex-showroom price & on-road price. Still for academic purpose, ex-showroom price of a car excludes the local (state) taxes & statutory charges. On-road price, however, is a different animal all together. It includes cost of registration, octroi, road tax, insurance, and all other taxes or charges depending on state-to-state, car company-to-car-company, dealer-to-dealer. You can squeeze some value out of this price.

Advance EMI or not

Now this one is the best –a Bank official comes to you & offers lower EMI on your car loan. Everything looks the same but he insists on taking an advance EMI. You don’t feel it is too much. But as I told you earlier, finance calculations are difficult.

EMI of a 10% 5 year loan with Advance EMI=EMI of a 9.65% 5 year loan without Advance EMI.

So whenever you are given an offer of advance EMI that may look like a reduced EMI on similar interest rate – WATCH OUT – you are just being ‘number-hunted’.

0% Car Loans

While I was writing this article, a mail for 0% finance landed in my mailbox. I laughed. What an eye-wash – there is nothing like a free lunch. They would somehow make it from you in one way or the other. Lesser discounts, compulsory insurance from them or the likes.

Pre-payment Penalty

Look out for the Bank that doesn’t charge a pre-payment penalty. Often one takes a car loan for 5 years, often one feels the need of pre-paying it. Apart from ability to pay back the loan that one develops over the period, there is another very critical reason associated to it.

EMI on 3 year Car Loan of 5 lacs=EMI on 20 year Home Loan of 12.5 lacs.

So you see, you may encounter a scenario where when you go for buying a house, the banker tells you that major portion of your eligibility is blocked by a car loan which is ending soon but is blocking your EMI paying eligibility so you have no other choice but to clear off the car loan to make way for a longer duration and more necessary Home Loan.

Document List

Documents required for Car Loan


Self Employed Professional

Self Employed Non Professional

Application form












Identity Proof




Address Proof




Age Proof




Bank Statements




Signature Verification




Income Proof




Latest Salary Slip / Form 16




Income Tax returns of 2 previous financial years along with complete financial/audit report.




Income Tax Returns of 2 previous financial years.




Other Documentation




Business Stability proof / Ownership proof




Employment Stability Proof




Partnership deed and Letter signed by all partners authorising one partner




Companies and Societies: Resolution by Board of Directors (or such managing body) and Memorandum and Articles of Association





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