Car Installment Calculator: Monthly Payment, Interest and Total Cost
Work out the monthly installment on a car loan or Islamic car ijarah from any bank, with the interest, insurance and what the car costs you in all.
Borrowing Rs 3,000,000 over 3 years at 14% costs Rs 102,533 a month. You pay Rs 691,184 on top of the loan.
- Loan 81.3%
- Interest 18.7%
Year by year
| Year | You pay | Interest | Loan repaid | Still owed |
|---|---|---|---|---|
| Year 1 | Rs 1,230,395 | Rs 365,923 | Rs 864,471 | Rs 2,135,529 |
| Year 2 | Rs 1,230,395 | Rs 236,821 | Rs 993,573 | Rs 1,141,955 |
| Year 3 | Rs 1,230,395 | Rs 88,439 | Rs 1,141,955 | Rs 0 |
Shorter or longer
| Term | Monthly | Total interest |
|---|---|---|
| 1 year | Rs 269,361 | Rs 232,336 |
| 2 years | Rs 144,039 | Rs 456,928 |
| 3 years You are here | Rs 102,533 | Rs 691,184 |
How a car installment is worked out
Banks in Pakistan quote car finance as equal monthly installments on a reducing balance. Each month part of the payment covers interest (or profit, in Islamic car ijarah) on what you still owe, and the rest pays down the loan. Early on most of the installment is interest. By the last year most of it is the loan itself. The year by year table under the calculator shows this.
Three things set the installment: how much you borrow, the rate and the number of years. A bigger down payment cuts all three costs at once, because you borrow less and pay interest on less.
The rate you enter
Most banks price car finance at KIBOR plus their own margin, and KIBOR moves with the State Bank’s policy rate. That is why the calculator asks for the rate on your quote instead of showing one. Get a written quote from two or three banks, enter each rate, and compare the monthly figure and the total interest.
If the rate is floating, the installment can change during the loan when KIBOR is reset. A fixed rate costs more at the start but stays the same. Ask the bank which one your quote is.
State Bank rules for car loans
Every bank follows the same limits, set in the State Bank’s Prudential Regulations for Consumer Financing and last changed in May 2022. The calculator applies them.
| Rule | Limit |
|---|---|
| Down payment | At least 30% of the car’s price |
| Longest term, above 1000cc | 3 years |
| Longest term, up to 1000cc | 5 years |
| Most one person can borrow for cars, from all banks together | Rs 3,000,000 |
| All your loan installments together (car, personal, credit card) | No more than 40% of your monthly take-home income |
| Imported cars, new or used | Cannot be financed |
| Used cars | Not older than 9 years. For cars 5 to 9 years old, the loan must end before the car turns 12. |
Banks finance only the manufacturer’s price, plus items you ask to have fitted such as a tracker. A dealer’s premium (own money) has to come from your own pocket. The car is hypothecated to the bank (marked in its favour) until the last installment, and it must be insured for the whole term. Roshan Apni Car, the car finance for Roshan Digital Account holders, has its own terms.
Advance tax when you buy a new car
When you buy from the manufacturer, it collects advance income tax under section 231B of the Income Tax Ordinance, as a share of the invoice price. The rates are in the First Schedule (Part IV, Division VII), and the Finance Act 2026 left them unchanged. If you are not on the Active Taxpayers List, you pay three times the rate (an extra 200%).
| Engine | On the Active Taxpayers List | Not on the list |
|---|---|---|
| Up to 850cc | 0.5% | 1.5% |
| 851cc to 1000cc | 1% | 3% |
| 1001cc to 1300cc | 1.5% | 4.5% |
| 1301cc to 1600cc | 2% | 6% |
| 1601cc to 1800cc | 3% | 9% |
| 1801cc to 2000cc | 5% | 15% |
| 2001cc to 2500cc | 7% | 21% |
| 2501cc to 3000cc | 9% | 27% |
| Above 3000cc | 12% | 36% |
For a car with no engine size, such as an electric car, worth Rs 5 million or more, the rate is 3% of the invoice price. The tax is adjustable: you count it against your income tax for the year when you file your return. A bank or leasing company that leases a car to someone not on the list also collects 4% of the car’s value. See filer vs non-filer for how to get on the list.
Costs on top of the installment
- Insurance. Banks require comprehensive car insurance for the whole term, renewed every year. Enter the rate from your quote to add it.
- Processing fee and documentation charges. These are in each bank’s Schedule of Charges.
- Advance tax, registration and token tax. The advance tax above is paid when you buy. Registration fee and token tax go to your province’s excise department and differ by province. For a car registered in Punjab, the token tax calculator works out the yearly amount.
- Early settlement. Paying off the loan early can carry a charge. Check it before you sign.
Shorter or longer?
The second table shows the same loan over every term the State Bank allows for your engine size. A longer term lowers the monthly payment but raises the total interest, often by a lot. Pick the shortest term whose installment you can pay comfortably every month, with room for insurance and fuel.
For what a car really costs to keep, see the inflation calculator for how prices rise over the loan term.