The automobile industry is rapidly evolving, and the prices for cars are only rising. New cars become more expensive each year, making them a very high value buy for the common man. And somewhat interestingly, given the steady rise in costs, a car’s average lifespan is going down, bringing good news for future used car buyers. As automakers release newer models now than a few years ago, more modern vehicles are hitting the used car market, making it easier for you to make a decent purchase without hurting your pocket. Hence taking a used car loan is an excellent idea if you are looking to buy a second-hand car. While talking about used car loans, one of the most significant loan components is the monthly used car loan EMI calculator.
What’s an EMI Calculator for Used Cars Loan?
A Used Cars Loan EMI calculator lets you understand the EMI you will pay for the principal payments and interest charges over the loan’s lifetime. You can use the EMI calculator to learn how much money you will spend every month over a reasonable period. You can schedule your monthly payments with our EMI calculator’s aid and pay off the loan quickly.
What does a Used Cars Loan EMI refer to?
EMI stands for Monthly Equated Instalments. The payment you give to pay off the loan for any loan undertaken on a fixed tenure. The EMI will include the principal and interest payments made to repay the loan for used car every month. Although EMI sums do not change, the percentage of principal and interest will change month after month. The interest is higher initially, but the principal cost is less. The exact amount of principal and interest would depend on the interest rate paid and the loan duration.
How to determine the monthly EMI using a used car loan EMI calculator?
This Car Loan calculator produces a microsecond result and helps you understand whether the monthly payment will be acceptable.
All you need to do is enter:
- Car Loan amount (in Rupees)
- Car Loan rate of interest ( in percentage)
- Car Loan Tenure (in months/years) You can either use the online calculator’s slider or enter the loan values in the Car Loan EMI calculator table. When you modify the input values, the calculator will re-calculate and display the new result. The car loan EMI calculator produces the EMI result and informs you of the cumulative loan interest due over the entire loan term. Furthermore, the pie-chart shows the break-up of total interest and principal amount payments. Therefore, the Car Loan calculator makes it easier to grasp the total amount of principal and interest you are expected to pay. The car loan EMI calculator will give you a clear picture of the cash outflow you need to assess before choosing a loan. The formula for calculating Car Loan EMI The standard mathematical formula available for calculating EMI is as follows: EMI = P * R * (1+R)n /[(1+R)n]-1 P – Principal loan amount; R – the rate of interest calculated every month, i.e. (R= Annual rate of interest/12/100).
Before you take advantage of a Car Loan:
a) Know what your financial needs are:
Practice the much-needed discipline to keep your debt-to-income ratio stable (Ideally, your monthly debt contribution should not exceed 40% of your gross income.)
b) Have a refund scheme in place:
Find out the repayment schedule for the loan and have a repayment plan in place, so you don’t miss any EMI / s and end up paying the penalty.
c) Ensure sufficient insurance
As a breadwinner, insure yourself optimally while you are trying to do the best for your kids. The insurance funds will help the family members’ financial stability and pay off the unpaid debt.
d) Hold families in the loop.
When planning to take advantage of a loan, be sure to discuss it with your family. Sharing with them your reasoning will keep them updated, and their perspectives will help you gain a better view. Even if it is a surprise, keeping your family in the dark may not be in their best interest.
Financing your car is an important decision, and hence you need to be vigilant and carefully assess your options before opting for loans.