Bike Loan EMI Calculator – How to Calculate two-wheeler EMI Online
By 2025 the two-wheeler loan market (new and used bikes) is projected to be a $12.3 billion industry. Since borrowers usually avail of a substantial loan amount to purchase two-wheelers, the EMIs are high. This is where a bike loan EMI calculator comes in handy. Read on to know how to use an online two-wheeler loan EMI calculator, how it works and more.
What is a Bike Loan EMI Calculator?
A bike loan EMI calculator enables you to compute your fixed monthly obligations for this high-value purchase you have made using the obtained loan amount. After having a detailed idea, you get to plan your monthly two-wheeler loan repayment better.
Calculate Your Bike Loan EMI
Loan Amount
Rate of Interest (P.a)
%
Loan Tenure (Months)
months
Monthly EMI
0
Total Interest
Total Amount
How Does a Bike Loan EMI Calculator Work?
Manual calculation of EMI for a bike follows the formula given below:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
Where P, R and N denote principal amount, interest rate and the number of monthly instalments respectively.
However, using the online EMI calculator make the process easier. To calculate EMI online, you will need the following details:
- Loan amount
- Interest rate
- Repayment tenure
Benefits of a Bike Loan EMI Calculator
There are many benefits of using a bike loan EMI calculator:
- Convenient to use and you can find it easily online. Simply visit the lender’s website and use this financial tool to evaluate your loan EMIs.
- Depending on your repayment capacity, you can easily choose any repayment tenure. This tool allows you to compare and calculate how much you will have to pay each month on the basis of that.
- You get to plan your finances better when you have access to such tools. If you already have some additional financial liabilities, it becomes easier to come up with a strategy and manage them properly.
Unsecured loans enable individuals to opt for substantial funds without having to pledge any asset as collateral against it. Navi offers instant cash loan of up to Rs. 20 lakh at attractive interest rates. To get immediate financial assistance for financing the purchase of your new bike, download the Navi app and apply for a personal loan.
You should also remember that assessing one’s repayment capacity is essential to managing the loan smoothly. A bike loan EMI calculator helps borrowers to plan everything out beforehand and avoid falling into a debt trap.
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How to Use an Online Bike Loan EMI Calculator?
Many banks and financial institutions that offer bike loans have an EMI calculator on their website or app. Follow these steps to calculate bike loan EMI:
- Step 1: Visit the website of the lender that you have chosen to get a two-wheeler loan.
- Step 2: Enter the loan amount, tenure and interest rate.
- Step 3: Click on ‘Check Now’ or ‘Submit’. The online calculator will automatically generate the monthly EMI amount you need to pay.
You can compare different combinations of repayment tenure and loan amount to check what amount will be easy for you to bear each month. Based on that, you can come up with your own repayment strategy and manage other liabilities smoothly.
How to Reduce Your Bike Loan EMI?
You can consider the following ways which will help you lower your burden:
- Higher down payment: While availing of a loan, you should try to make the down payment as much as possible. This will reduce your monthly burden.
- Compare interest rates: Before availing of a loan, you should compare the different lenders and their interest rates. Depending on satisfying the eligibility criteria and credit score, you should opt for the lowest interest rate possible.
- Longer repayment tenure: Longer repayment tenure suggests the distribution of the loan amount over more years which will reduce the monthly burden. But it also suggests more interest payment. So you have to choose as per your requirement.
- Step-down EMI: Check with your lender if they provide the facility of step-down EMI. In this process, you will be able to pay your EMIs in a descending order where the EMIs, in the beginning, will be higher and will decrease as the repayment tenure nears the end.
- Balance transfer: During the repayment tenure if you find some other lender with a lower interest rate, you can ask for a balance transfer.
- Part prepayment: During the loan tenure, you can make prepayments to reduce the loan amount. This, in turn, reduces EMI.
Factors Affecting Your Bike Loan EMI
Bike loan EMI will have the following factors which might affect your repayment. So, make sure to check them beforehand:
- Down payment: While making the down payment make sure you do it as much as possible. Making a higher down payment will reduce the loan amount which will reduce the EMIs.
- Interest rate: EMIs are constituted of the principal amount and the interest to be paid. While applying for a loan, you should do your market research to go for a lower interest rate which will impact the EMIs to be paid.
- Repayment tenure: If you go for longer loan tenure, your EMIs will be distributed over a longer period of time which will reduce the monthly burden. But longer tenure also invites more interest payment. Hence, it is advisable to repay your loan amount as soon as possible.
Who Should Use a Bike Loan EMI Calculator?
Any aspiring individual looking to purchase a bike on loan must use an online EMI calculator. This will reduce the chances of defaulting in future. A bike loan EMI calculator computes the actual EMI amount and the interest outgo. One should use this calculator to arrive at an EMI value that he/she can comfortably repay. The calculator gives an opportunity to change the loan amount or the repayment tenure accordingly.
What Happens if You Miss a Bike Loan EMI?
If you fail to make the EMI payment by the due date, you will receive a message regarding the same and a penalty will be levied on the payment. If you continue to miss bike loan EMIs, after 90 days it will be considered a non-performing asset (NPA) and as vehicles are usually hypothecated to the lender, it can start legal proceedings.
Things to Remember before Applying for a two-wheeler Loan
You should consider the following things before applying for a two-wheeler loan:
- Credit score– Your CIBIL score or credit score depends on your loan history. The higher the credit score the lower will be your interest rate.
- Eligibility criteria– The eligibility criteria vary from one lender to another. Check with your lender if you fulfil their criteria beforehand.
- Interest rate– The interest rates range between 9.5% and 17%. If you compare carefully and do your market research, you will be able to get a loan at more affordable rates.
- Additional charges- Apart from the down payment, your lender will ask for an additional charge known as processing fees. The processing fee can go up to a maximum of 3% of the loan amount.
- EMI calculator– You should use a bike loan EMI calculator before applying for a loan. This will help you know the EMI amount which will be helpful to manage your future finances accordingly.
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Final Word
Before purchasing high-value products, it is essential to check whether you will be able to bear the additional costs it comes with. If you are planning on availing of a bike loan to finance such a purchase, you should be aware of its intricacies as well. In this regard, calculating your monthly obligations using a bike loan EMI calculator is not enough. Look out for the associated charges, eligibility parameters, document requirements, etc. as well.
FAQs
Ans: Lenders usually charge a processing fee on bike loans. However, the exact fee percentage can vary from one lender to another. Keep in mind that processing fees are additional charges which you cannot compute using a bike loan calculator.
Ans: Lenders provide bike loans at varied rates depending on borrowers’ eligibility and other factors. You can find out the quoted interest rate by contacting your chosen financier. In some cases, you can also get this information from a lender’s official website.
Ans: The easiest way to lower your monthly instalment is to opt for a longer repayment tenure. Additionally, you can choose to borrow a limited amount and pay a portion of your bike’s cost from your pocket.
Ans: For any loans, foreclosure refers to paying off the dues before the tenure runs out. Borrowers need to pay a lump sum amount to clear their outstanding principal and foreclose a loan. Bike loan foreclosure can reduce your total interest cost on a loan.
Ans: Generally, you need a credit score of 750 or more to avail of unsecured loans. However, if you have a long-standing relationship with your chosen lender, they may allow you to avail a loan at high-interest rates.
Ans: The minimum tenure for availing of bike loans is of 12 months which can go up to a maximum of 48 months and for superbikes, it can go up to 60 months.
Ans: There is a processing fee while applying for a two-wheeler loan charged by the lender. It can vary from anywhere between 1% and 3% of the loan amount.
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Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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