The 20/4/10 rule
- 20% down: a smaller loan, and you don't owe more than the car is worth as it loses value.
- 4 years or less: a longer loan lowers the EMI but adds interest on something that keeps losing value.
- 10% of gross income: EMI, fuel, insurance and upkeep together, so the car doesn't crowd out saving.
It's a guide, not a law. If you also have a home loan, aim lower: lenders usually want all EMIs under 40–50% of take-home pay (see the home loan eligibility calculator).
Results are estimates for illustration only, not financial advice. Banks and schemes may round, apply TDS or use slightly different day counts — confirm figures with your bank or employer. Written by the Welthr team; last reviewed on .