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Factors Affecting the EMI on a car loan for a second hand car

Nowadays, cars have become a necessity for most people. However, most new drivers get a used car as it is affordable and offers the same benefits. Buying a used car with the help of a car loan is more beneficial. With a car loan for second hand car, you can get an affordable interest rate, improve your credit score, get financial support, and maintain your FD.

You should learn the factors that affect the EMI on used car loans in detail, so you can easily choose the suitable loan option.

  • Car loan amount

The car loan amount or principal amount is the money your lender will borrow from you for a specific period. You can get up to 100% of the value of the used car. However, if you already have some amount in your hand, you can request the remaining sum. The lender decides the car loan amount based on the price of the car you wish to buy, the amount of auto down payment, and more factors.

If you want to reduce the loan amount, you should try negotiating the car price with the seller. You can check the car’s condition and age to drop your car’s price. Reducing loan amounts will reduce the EMI amount. Also, use the second-hand car loan calculator to know the accurate EMI on your loan.

  • Interest rate

The rate of interest is another factor that influences your car loan monthly payment. Different banks and lenders offer loans with different interest rates. You can compare the interest rate for the car loan for second hand car and choose the best one. However, other factors, such as your credit score, your relationship with the lender, and your income slab, also affect the interest rate. Your lender may look at your debt and income to charge an interest rate on your loan. The lender can charge you a higher interest rate and a larger EMI amount if you have higher debt. So, clear out your debt before you apply for a used car loan and get a lower interest rate.

  • Loan term

Your lender may provide a flexible repayment period between 12 and 84 months. You can select the term for your loan. The repayment period for your loan affects your EMI amount, as increasing the number of years will result in a drop in the EMI amount. However, increasing the tenure will mean paying interest rates on your loan. Once you know these three factors, enter them into the second-hand car loan calculator and calculate the EMI amount and total payable amount for your loan.

How to estimate the EMI on your used car loan?

You can calculate the EMI on your car loan for a secondhand car easily with the help of an online EMI calculator. Browse the calculator, and enter all the above details on the tool, such as loan amount, tenure, interest rate, and processing fees.

The calculator will display the accurate EMI amount and total payable interest within a second. If the EMI doesn’t fit into your monthly budget, you can change the loan amount, tenure, and interest rate. Once you find the suitable EMI amount, stick with it and ask your lender to provide you with a similar loan option.


Three key factors help determine the monthly car loan payments, including principal amount, interest rate, and loan tenure. Once you understand these three factors, you can reduce the EMI amount and total payable amount at the end of the loan. Use the second-hand car loan calculator to calculate the EMI amount.

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