Used car Loan Calculators: What You Need to Know About Them

Mar 02, 2017

Tarun wanted to buy a car, as he had to travel a lot for work. He realised that a second hand car would fall within his budget. But Tarun did not know how to calculate the equated monthly instalment (EMI) he would have to pay. He also could not figure out for how long he would have to repay the loan. This put a dent in his plans, as he could not settle on a fixed budget. Tarun's colleague, Amit, advised him to use an online calculator for used car loans. Using the online calculator helped Tarun decide on a suitable budget.

Why are used car loan calculators important?

When you take a loan, you repay the bank or lending institution in EMIs. Each EMI comprises the principal amount plus the interest on that amount. Used car loan calculators tell you how much EMI you will pay each month. It is difficult to fix a loan amount if you do not know how much you would need to set aside every month. The loan calculator addresses this problem by providing the answers you need.

Related: How to calculate the EMI for a Used Car Loan

How do used car loan calculators work?

The used car loan calculator is an automatic tool. You have to fill in the basic details of the loan amount, loan tenure, and percentage of interest. Based on these details, the calculator will provide the EMI breakup of your loan. It will also tell you the interest you have to pay and the total amount you will repay.

How do you use a used car loan calculator?

Used car loan calculators, like the one on the Tata Capital website, are easy to use. All you need to do is use the sliders to indicate the amounts. You can also directly type the numbers in the text box. You would need to provide three types of details:

  1. The loan amount
  2. Your preferred loan tenure
  3. The interest rate of your used car loan

Next, click on the 'Calculate' button and the calculator will give you the EMI, interest payable, and total amount payable. If you are not satisfied with the results, click on the 'Reset' button. Then start afresh by inserting different figures.

Related: Why shorter tenures on used car loans are better

How do used car loan calculators help you decide your car loan amount?

The used car loan calculator will remove the guesswork from your financial planning. It helps narrow down the actual figure of your car loan amount. The calculator provides exact figures for your EMI based on different tenures and rates. So, you can easily settle on a car loan amount.

What are the benefits of using a car loan calculator?

  1. You get accurate results.
  2. It saves you time and energy as you do not have to make lengthy calculations manually.
  3. Planning your finances becomes easier when you can foresee the amount you need to set aside for the given period.
  4. Choosing the most suitable schemes or loan from different lending institutions is easier.
  5. You can also use the results to negotiate better terms for yourself with financial or banking institutions.

Conclusion

When it comes to loans, the more informed you are, the better your financial planning will be. So, before you apply for a used car loan, use the calculator as Tarun did. It will help you plan your finances and your future with ease.