Car Loans Up 49%: Is Your EMI Budget Ready?
The average car loan in India has jumped 49% to ₹8.2 lakh since 2019, and loan tenures have stretched to 62 months. SUV popularity is the main driver. Higher loans mean bigger EMIs and more total interest paid.
₹8.2 lakh at 9% over 62 months = ₹14,800/month EMI — that's 3x a decent monthly grocery bill for a family of four.
Your average car loan is now this large — up 49% in 7 years
Key Takeaways
Calculate your total interest outgo before signing: a ₹8.2 lakh loan at 9.5% over 62 months costs roughly ₹2.1 lakh in interest — compare this against a 48-month tenure to see how much you save.
Check your FOIR (Fixed Obligation to Income Ratio) on GoCredit before applying — most banks reject home loan applications if existing EMIs including a car loan exceed 50% of your take-home salary.
Negotiate a larger down payment (20–25% of on-road price) to reduce the loan principal and avoid being 'underwater' on the loan when the car depreciates faster than you repay.
The average car loan in India has jumped 49% to ₹8.2 lakh since 2019, and loan tenures have stretched to 62 months. SUV popularity is the main driver. Higher loans mean bigger EMIs and more total interest paid.
Here's what happened: TransUnion CIBIL data shows average passenger-vehicle loan sizes rose 49% from roughly ₹5.5 lakh in H1 2019 to ₹8.2 lakh in H1 2026.. Average loan repayment tenures increased by five months to 62 months, meaning borrowers are now locked into car EMIs for over five years on average.. The primary driver is India's SUV boom — buyers are upgrading from entry-level hatchbacks to SUVs priced ₹12–20 lakh, pushing loan sizes sharply higher..
What you should do: Calculate your total interest outgo before signing: a ₹8.2 lakh loan at 9.5% over 62 months costs roughly ₹2.1 lakh in interest — compare this against a 48-month tenure to see how much you save.. Check your FOIR (Fixed Obligation to Income Ratio) on GoCredit before applying — most banks reject home loan applications if existing EMIs including a car loan exceed 50% of your take-home salary.. Negotiate a larger down payment (20–25% of on-road price) to reduce the loan principal and avoid being 'underwater' on the loan when the car depreciates faster than you repay..
Pro tip: Car loan interest is NOT tax-deductible for salaried employees — unlike home loans. Every rupee of car loan interest comes purely from your post-tax income, making it one of the costliest borrowings you can carry.
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This article is reported by GoCredit's Editorial Team based on the source above. GoCredit synthesises, contextualises, and adds India-borrower-relevant analysis. We are not the original publisher.
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