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How to Use an Online Bike Loan EMI Calculator? Explained With Steps!
If you have decided to buy a bike, you may consider taking a two-wheeler loan to ease the financial strain on your pockets. These days, it is quite easy to avail of a loan online with minimum fuss and paperwork involved.
However, verifying the lender’s credentials and comparing the various interest rates on bike loans is prudent before you make your decision. This is because the interest rate is not a fixed, standard rate that is the same across lending organisations.
Several factors go into determining the actual interest rate on the bike loan you seek that directly impacts your monthly loan installments. These include your age and your credit score, among other aspects.
Choosing the best two wheeler loan interest rate will help you decide the monthly EMIs. Based on your monthly EMI, you can decide whether the given interest is friendly to your pocket or not.
Knowing the interest rate may not always paint as clear a picture as you would like. For example, knowing the interest rate is 10% may be less helpful than knowing the exact amount you must pay each month. This is where a bike loan EMI calculator can help you.
● Knowing your monthly loan installment helps you plan your budget judiciously.
● It gives you a clear breakup of the principal and the interest to help you wisely choose your loan tenure and the amount to be borrowed.
● As mentioned earlier, different lenders offer different interest rates on bike loans. You can choose the lender offering favourable terms by calculating the absolute EMI amount.
● Armed with this information, you can understand the cost of buying your bike and better negotiate to get the best deal possible.
A bike loan EMI calculator is a free-to-use online tool that can instantly calculate your exact EMI amount. You can do this manually too, as the underlying calculation formula is the same, which is:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
In this equation, P (Principal) stands for the amount borrowed, R (Rate) stands for the interest rate on the bike loan, and N (Number) stands for the number of monthly installments to be paid.
A bike loan EMI calculator has a straightforward visual interface to input these values. You don’t have to understand the nuances of the calculator’s algorithm. Instead, you need to follow these simple steps.
● Step 1: Visit the bike loan EMI calculator on the lender’s website
● Step 2: Enter the amount you wish to borrow in the textbox
● Step 3: Choose the preferred loan tenure (in months)
● Step 4: Enter the rate of interest or simply drag the cursor on the scroll bar
Instantly, you will receive the following information.
● Exact monthly EMI amount
● Total amount payable
● Total interest over the amount borrowed
Furthermore, the bike loan EMI calculator will show you the amortisation breakup of your entire amount broken down into the principal and interest payable each month.
There are numerous benefits of using a bike loan EMI calculator. The key ones are listed below.
● It is convenient to use and helps you avoid cumbersome mathematical calculations.
● Since the entire calculation is done digitally, it is an error-free and fool-proof way of determining your monthly loan installments.
● It saves you time and gives immediate results to make quick and sound borrowing decisions.
● There is no need to sign up, create an account, or provide any KYC (or other) documents to use a bike loan EMI calculator.
● It has no cost or a limit of usage associated with it. This means you can play around with various permutations and combinations till you find the ideal option with the minimum strain on your finances.
What if your calculations show a higher-than-expected EMI amount? Now that you know the different variables that impact the final repayable amount, you can use them to reduce your monthly EMI. As you must remember, the key variables in a bike loan EMI calculator are P, R, and N.
● P (Principal) - Reducing the amount to be borrowed will also reduce your EMI. You can achieve this by making a higher down payment. The down payment is the upfront amount you pay from your pocket.
● R (Rate) - Do your research to identify a lender with the most competitive interest rate on the bike loan. The lower the rate, the lesser the EMI will be.
● N (Number of installments) - If you choose a longer loan tenure, your EMIs are likely to be reduced since they are spread evenly over a longer duration.
Use the online EMI calculator on Bajaj Markets to identify the ideal combination of the abovementioned factors before taking a two-wheeler loan.
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