When you plan to buy a pre-owned car, it is always better to utilize a second-hand car loan that comes with attractive interest rates and flexible repayment tenures. You can get up to Rs 50 Lakh at attractive interest rates, starting at 12.5% per annum, and repayment tenures of up to 60 months online from new-age NBFCs like Hero FinCorp. However, before applying for the loan, using the Used Car EMI Calculator – a free-to-use online tool – to calculate your EMIs and plan your finances accordingly is advisable. Let’s understand how an EMI calculator can help you better plan your finances.
Why Financial Planning is Essential for Buying a Second-Hand Car?
Before we discuss how to use the EMI calculator, let’s first discuss why financial planning is important when purchasing a pre-owned vehicle.
1. Understanding Affordability
Financial planning helps you understand what you can afford. Owning a car involves paying for the vehicle and additional costs like insurance, fuel, and maintenance.
2. Avoiding Over-Borrowing
Without a clear financial plan, you could borrow more than you can repay comfortably. This can lead to financial stress and potential defaults.
3. Better Loan Management
A clear repayment plan helps you manage your finances more effectively, ensuring you don’t miss EMIs and incur penalties.
This is where the Used Car EMI Calculator comes into play. It’s an essential tool that helps you map out your financial obligations and create a feasible repayment plan.
How to Use the EMI Calculator for Accurate Financial Planning?
Now, let’s break down the steps involved in using an EMI calculator effectively-
Step 1: Choose a Reliable EMI Calculator
The first step is to find a reliable used car emi calculator. Top lending institutions provide these calculators on their websites. Ensure the calculator you are using does not require your personal information.
Step 2: Input the Loan Amount
Once you have selected a calculator, the next step is to input the loan amount. This is the amount you need to borrow to finance your second-hand car purchase.
For example, if you are purchasing a second-hand car priced at Rs 4,00,000 and plan to make a down payment of Rs 1,00,000, the loan amount you will need is Rs 3,00,000.
Step 3: Select the Interest Rate
The interest rate plays a crucial role in determining your EMI. Different lenders offer different interest rates for used car loans, and these rates can vary based on factors like your credit score, the loan amount, and the tenure.
Input the interest rate you have been offered or the average rate for second-hand car loans. A lower interest rate will reduce your EMI, while a higher rate will increase it.
Step 4: Choose the Loan Tenure
Next, you need to select the loan tenure or repayment period. Loan tenures for used car loans usually range from 1 year to 5 years. The longer the tenure, the lower your monthly EMI will be, but you’ll end up paying more in interest over the entire loan period.
Step 5: View the EMI Calculation
After entering the loan amount, interest rate, and tenure, the calculator will instantly display the exact amount you will need to pay every month for the duration of the loan.
Benefits of Using an EMI Calculator
1. Helps You Plan Your Budget
Knowing your exact EMI amount in advance can help you plan your budget more effectively. You can also assess whether the monthly payments fit into your current financial situation or if you need to adjust your loan amount or tenure.
2. Compare Loan Offers
Using an EMI calculator allows you to compare different loan offers. You can input different interest rates and tenures to see how they affect your EMI. This will help you choose the most affordable loan option.
3. Saves Time
Using an EMI calculator is quick and easy. Instead of manually calculating your EMIs using complicated formulas, the calculator does all the work for you in seconds.
Conclusion
Those considering buying a second-hand car using a loan can better plan their finances with a Used Car EMI Calculator. It just needs three things to calculate the loan EMIs: loan amount, interest rate, and tenure. Just enter these figures into the calculator and see the monthly instalments you will pay through the loan term. This helps you plan for the EMIs and lets you manage your finances effectively.
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