Posted by If you are planning to buy a used car on loan, try the online loan application process. It is easy and convenient. You can access the lender’s portal from the comfort of your home or a remote location and complete the entire transaction. There is no requirement for hardcopies, contacting agents, standing in queues, and the likes. One fascinating feature of any lender’s website is the online loan EMI calculator. Even before actually applying for the loan, you can use it to get the exact amount of the second hand car loan interest rate that you would be paying. Read on to know the process in detail.
The EMI calculator is a simple tool that is free and easy to use. You do not have to create an account on each lender’s website just to access it and the benefits include:
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Checking loan affordability
With the EMI calculator, you can find out how comfortable it would be for you to pay the EMI amount every month. It should not be that during repayment, you face any financial stress due to the extra sum besides your regular expenses. The calculator would show the exact amount that you have to pay, once you put in the loan amount and repayment tenure. Based on the figures that you get, you can decide on the amount of loan that you should apply for.
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Plan the budget
You must be having a monthly budget that you plan in advance so that you can pay your bills and dues on time. That wud also help you to save some part of the income too. With a scheduled plan, there would be less chances of defaulting on the loan amount. This would help you to maintain the personal credit score at a high level so that there is no problem in getting loans in future.
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Avoid manual calculations
There is high chance of making mistakes while doing manual calculations resulting in faulty results. The EMI calculator would undergo difficult calculations in a flash and you get exact figures. Being automatic, the time taken for calculation is also least.
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Easy to use
You can see that the calculator is easy to use and is a simple tool. There is no complexity in the procedure and you just have to put in the details like the amount of loan, interest rate, and loan tenure. Then click on the button meant to calculate and you would get the result immediately.
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Secured process of calculation
The calculator does not require your personal details like name, contact number, address, etc. It would also not ask for any bank account detail or credit card number. The details that you put in would not get stored. So, there is no chance of data hacking, stealing of personal information, etc.
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Easy to access
Access it from any device where you have a stable network connection. It can be your desktop, laptop, tab, or smartphone.
How to lower the EMI amount?
You just have to put in the used car loan amount, rate of interest, and loan tenure. Then click on the calculate tab to get the results. If the EMI is too high, you can lower it by decreasing the interest amount. This you can do in three ways:
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Change the loan principal amount
It is the loan amount that you would apply for. You have to repay it along with the interest amount within a specified time called the loan tenure. To reduce the interest, you can decrease the total loan amount although you may have to pay a higher down payment. It may be a bit hard for you initially but would lead to lower interest rates.
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Rate of interest
This is usually fixed by the lender. If you get any discount, you can change the rate of interest as well to lower the interest amount. This way you can reduce the total EMI.
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Loan tenure
The loan tenure indicates the timeline within which you have to pay back the loan with interest. The longer the tenure, the higher would be the interest rate. So, shorten the tenure in the calculator to get a lower overall interest amount. The EMI may be high but you will have overall savings.
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Compare the interest rates
You can compare the interest rates of different lenders on the EMI calculator given at the quotes comparison websites and lower them by varying the interest, loan amounts, and tenures. Then select the lender offering the lowest rates.
With the EMI calculator, you can vary the different components to arrive at the second hand car loan interest rate that would be the lowest or at a low level. This would help you to save a significant amount from your loan repayments.