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Tips To Reduce Your Car Loan EMI


by Mahindra Finance


April 17, 2024


4 mins read

Buying a car is an exciting milestone in life, but the burden of a high car loan EMI due to a high car loan interest rate can dampen the joy. The good news is that there are several ways you can reduce your monthly payments and save money. 

This article guides you through reducing your car loan EMI step-by-step. So let's dive in and learn how to lower your car loan EMI!

1. Make a bigger down payment

One effective way to reduce your car loan EMI is by making a larger down payment. When you pay a significant amount upfront, the total loan amount decreases, resulting in lower interest charges. This means that your monthly instalments will be smaller, making it easier for you to manage your finances.

2. Opt for longer loan tenures

Another way to reduce your car loan EMI is by opting for a longer loan tenure. When you choose a longer repayment period, the total amount is spread out over a larger number of months, resulting in smaller EMIs despite a high car loan interest rate. However, keep in mind that while longer tenures reduce your monthly payments, they also increase the total interest paid over the loan term.

3. Explore loans from your existing bank

If you already have a relationship with a trusted bank, it's worth exploring loan options from them. Banks often offer lower car loan interest rates or special benefits to their existing customers as a way to promote brand loyalty and attract new customers.

4. Negotiate for lower interest rates

Having a good relationship with your bank can give you an advantage when negotiating for lower interest rates on your car loan. Banks are often willing to reduce rates for their present customers to retain their business and attract new customers.

Before approaching the bank, do some research on prevailing market interest rates and use that information as leverage during negotiations. Use an online car loan EMI calculator before you apply. By highlighting your good credit score, stable income, and positive banking history you can strengthen your position. Remember, the worst that can happen is that the bank declines your request. So it's always worth trying to secure a lower interest rate.

5. Consider switching lenders for better rates

If you find that your existing lender is charging a high interest rate on your car loan, don't hesitate to explore other options. By switching to a different lender with more reasonable rates, you can significantly reduce your car loan EMI.


Lowering your car loan EMI is not as daunting as it may seem. By following these tips, you can reduce your monthly payments and save money in the long run. Start by making a larger down payment or opting for longer loan tenures while keeping in mind the pros and cons of each option. Explore loans from your existing bank and negotiate for lower interest rates to improve your chances of securing favourable terms. If necessary, consider switching lenders to take advantage of better rates.

Remember, Mahindra Finance offers car loans tailored to suit your needs and preferences while ensuring a hassle-free application process. With attractive interest rates and flexible repayment options, Mahindra Finance can help you on your journey towards owning your dream car without breaking the bank.


Q: How can I calculate my car loan EMI?

A: You can use a car loan EMI calculator available online or consult with a financial expert to determine your monthly instalment based on factors like loan amount, interest rate, and tenure.

Q: What is car loan eligibility?

A: Car loan eligibility refers to the criteria set by lenders to determine whether an individual is qualified for a car loan. Use a car loan EMI calculator to check your eligibility.

Q: Can I reduce my car loan EMI after availing the loan?

A: Generally, it is not possible to reduce your car loan EMI after availing the loan unless you negotiate for a lower interest rate or refinance the loan with another lender.

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