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Second-hand Car EMI – Everything You Need to Know

While a new car is always tempting, buying a second-hand car is a more practical and economical choice for many. If you’re planning to take out a loan to finance your purchase, you must remember that second-hand cars come with higher interest rates. However, you can find a second-hand car loan with a competitive interest rate if you do your homework and compare different options.

When you’re calculating your monthly EMIs, use a second-hand car EMI calculator to get an estimate of your repayments. This will help you budget and make informed decisions about your purchase. Here’s everything you need to know about second-hand car EMI:

What Is an EMI?

An EMI, or Equated Monthly Installment, is the amount you’ll need to pay monthly to repay your loan. Your monthly EMI will be composed of two parts – the principal amount, which is the actual loan amount you’ll need to repay, and the interest charged on the loan. EMI repayment begins the month after you receive your loan amount.

For example, if you take out an Rs. 2 lakh loan for three years at an interest rate of 10%, your monthly EMI will be Rs. 6,479. This includes Rs. 20,000 as the principal amount and Rs. 479 as the used car loan interest rate.

How Is My Emi Calculated?

Your monthly EMI will be calculated based on the loan amount, interest rate, and tenure of the loan. The used car loan interest rate will depend on the lender and your credit score and income. The tenure of the loan is the number of months or years over which you’ll repay the loan. The loan tenure is also a significant factor, as a longer tenure will mean lower EMIs and higher overall interest payments.

You can use an online second-hand car EMI calculator or speak to your bank’s customer service representative to calculate your EMI. Once you have determined your EMI, you can start planning for your monthly budget and make sure that you can comfortably afford your loan repayments.

What Are the Benefits of Taking a Second-Hand Car Loan?

Many people shy away from taking out a loan to buy a used car. They think that they will be overcharged or end up with a lemon. But, if you research and find a reputable dealer, taking out a loan for a used car can be a very wise decision. Here are some of the benefits of taking out a second-hand car loan:

  1. You can get a lower interest rate 

If you have good credit, you can qualify for a lower interest rate on a second-hand car loan than you could on a new car loan. This is because lenders see used cars as less risky than new cars. With a used car, the lender knows that they can sell it for close to what they paid for it, so they are more willing to offer better rates.

  1. You can avoid dealer markups

When you buy a new car from a dealership, the dealer will often add several thousand rupees to the price of the car to make a profit. But when you buy a used car from a dealership, they usually won’t determine the price. This is because they know that there is already enough competition in the market for used cars, so they don’t need to inflate their prices to make a sale.

  1. You can get more cars for your money

If you have a limited budget, you will generally be able to get more cars for your money if you buy a used rather than a new one. This is because cars depreciate quickly as soon as they are driven off the lot, so you can get more bang for your buck if you buy something that has already been driven for a while.

Are There Any Risks Involved in Taking a Second-Hand Car Loan?

There are some risks involved in buying a used car. For starters, you don’t know how the previous owner treated the car. They may have driven it into the ground and never used it for regular maintenance. As a result, you could end up with a lemon that needs constant repairs.

Another risk is that you might not be able to get financing for a used car or get high-interest rates on used cars. Lenders are often wary of financing older vehicles because they depreciate quickly and may not be worth as much as the loan amount. So if you decide to go this route, make sure you have enough cash to cover the entire purchase price.


Taking out a loan to finance your second-hand car purchase is a practical and economical choice for many buyers. Before taking out a loan, ensure you understand all the terms and conditions and the risks involved. Get an estimate of monthly instalments by using an online second-hand car EMI calculator. Research well and find a reputable dealer to purchase your used car from. Doing so will help you avoid any stressful surprises down the road.


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