How it is worked out
- Down payment: 30% × Rs 3,000,000 = Rs 900,000
- Loan amount: Rs 3,000,000 − Rs 900,000 = Rs 2,100,000
- Monthly markup rate: 15% ÷ 12 = 0.0125
- Compounding over 60 months: (1 + 0.0125)60 = 2.1072
- Monthly installment: Rs 2,100,000 × 0.0125 × 2.1072 ÷ (2.1072 − 1) = Rs 49,959
What this means for you
Over the full term you pay the bank Rs 2,997,531, of which Rs 897,531 is markup, so the car costs you Rs 3,897,531 in all, Rs 897,531 more than its price. Banks also require car insurance every year, and that and the processing fee come on top.
State Bank rules cap the car financing one person can have from all banks at Rs 3,000,000, require at least 30% down, allow up to 5 years for cars up to 1000cc and 3 years above, and limit all your loan installments to 40% of your income. This installment alone needs a net monthly income of at least Rs 124,897.
The rate is the biggest unknown: banks price car loans at KIBOR plus their own margin, so ask for the current offer. At 13% this installment would be Rs 47,781; at 17%, Rs 52,190. Taking 3 years instead of 5 raises it to Rs 72,797 but cuts the total markup to Rs 520,699.
Nearby amounts
| Car price | Monthly installment |
|---|---|
| Rs 2,000,000 | Rs 33,306 |
| Rs 2,500,000 | Rs 41,632 |
| Rs 3,000,000 | Rs 49,959 |
| Rs 3,500,000 | Rs 58,285 |
| Rs 4,000,000 | Rs 66,612 |
Sources
- State Bank of Pakistan Prudential Regulations for Consumer Financing, R-11 auto finance (Rs 3 million limit, 30% down payment, tenure, 40% debt burden)
- Standard reducing-balance (EMI) formula
This calculator gives an estimate for guidance. It is not official advice. Rates and rules change, so confirm important decisions with the relevant authority or a qualified professional. See how we calculate, or report a mistake.