Saturday, April 1, 2023

How to Calculate Two Wheeler Loan EMI?

Indians have an unadulterated love for motorcycles. But in recent years, the popularity of bikes in the nation has increased exponentially. The primary reasons are the increasing cost of living and the incessant increase in fuel prices. Hence, even the well-off are choosing to buy a bike over a car.

This sudden shift in the market didn’t go unnoticed by motorcycle manufacturers in India. To make the most out of this opportunity, bike brands in India have increased the prices of their product line-ups. Hence, the situation currently looks like this. Even the entry-level 100 CC commuter bikes entail hefty price tags. Thus, it is natural for people to apply for two wheeler loan schemes.

Why people should not buy motorcycles with cash?

People should avoid buying bikes with cash as financing a motorcycle has many benefits. Some of those benefits are mentioned in the sections below – 

  • When a person applies for a bike loan, lenders tend to complete processing the application within a day. How? Well, most lenders in India have shifted to paperless loan procedures. It means that from application to submission of pertinent loan-related documents, everything is online.
  • Motorcycle loans these days entail flexible debt repayment options, affordable EMIs, reasonable interest rates as well as customizable tenures. Hence, one can conclude that applying for a bike loan won’t act as a financial burden for the borrower.
  • Bike loans can also allow one to buy a bike they want. One would not have to settle for a bike that is within their ‘budget’.
  • Bike loans can allow one to buy a bike whenever they want.
  • When a person applies for a bike loan, they are offering themselves a financial cushion to fall back on. It means that a bike loan allows one to keep their emergency funds like their FD or their savings intact. In simple words, a bike loan lets a person have a secure financial future and buy a bike they like. 
  • With the help of a bike loan, a person can build their credit score. At the same time, when the debt is repaid to the lender through EMIs, one is building their credit history. A high credit score and a healthy credit history are necessary as lenders use these details to approve loans. If one needs to borrow a large sum someday, a high credit score and spotless credit history would help.

How are two-wheeler loan EMIs calculated?

Borrowers planning to apply for a bike loan can calculate the EMIs for their loan scheme with an EMI calculator. 

A bike loan EMI calculator is a digital tool that one can find on the official website of leading lenders. These tools can also be found on top bike portals. These tools can be used free of charge. 

An EMI calculator tool is programmed to run on the mathematical formula –

P x R x [(1 + R)N/((1 + R)N – 1].

The variables used in the formula above stand for – 

  • Principal amount (P)
  • Interest rate (R)
  • (N) Tenure of the loan (in months).

How to use an EMI calculator?

  • Assign values for each variable mentioned in blank spaces in the EMI calculator tool.
  • Verify the variables once entered and then press the ‘calculate’ button.

The tentative EMI for the bike loan one is interested in will be displayed by the EMI calculator tool.

Why it is important to check the EMI of a bike loan?

Bike loans are categorised as financial obligations. Hence, borrowers should learn the tentative EMIs their bike loan would entail. By learning about the tentative EMIs of a bike loan, one can make necessary financial preparations. A prepared borrower is a smart borrower. A prepared borrower will never fail to pay the EMIs for their bike loan on time. Furthermore, with the help of timely payments, borrowers can keep their credit scores high and credit histories spotless.

For more details, please consult with a financial advisor.

William is a full-time Blogger and writer on trendtuch, she writes about many topics like News, Tech, Lifestyle, Digital marketing, etc to share her valuable knowledge with their readers.

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected


Latest Articles