A bike loan is a great funding option to manage the cost of the vehicle over an extended period. It saves you from having to pay a lump sum, instead, dividing the cost in EMIs which are easier to pay and do not strain your finances. However, it is essential to check the instalment amount, interest charges payable, and the overall cost of the loan before opting for this option. A great way to do this in a hassle-free manner, without any errors or miscalculations, is to use the two-wheeler loan EMI calculator available on Bajaj Markets.  

A bike loan EMI calculator is a tool which can be used to calculate the probable instalment amount of your loan within seconds. The calculations are based on 3 factors, the loan amount, interest rate, and tenure. While you can calculate the instalment amount manually with a formula, it can be tedious and time-consuming. Using an EMI calculator for a bike loan is a simpler way to check your probable monthly instalments. It also computes additional important information such as the total interest charges payable over the tenure and the aggregate cost of the borrowing. Additionally, you can also access the amortisation schedule which provides the complete breakdown of the instalments and how they contribute to the servicing of your loan. These insights can be quite useful when planning prepayments and foreclosure.

Follow these simple steps to calculate the instalment amount of your bike loan with the help of a calculator:

• Enter the loan amount, tenure, and interest rate in the calculator

• The instalment amount will be displayed on the screen

• If required, adjust the loan terms entered to check the EMI across various scenarios

• Download the amortisation schedule to check the breakdown of each EMI and how it contributes towards servicing the loan

You may also use the formula to calculate your EMI for a two-wheeler loan.

Here is the formula that you need to use.

EMI = [P x R x (1+R)N]/[(1+R)N-1]

Where,

• P represents the principal loan amount 

• R stands for the monthly interest rate

• N denotes the number of monthly instalments

To avoid the headaches caused by the tedious task of manual calculations, consider using a bike loan EMI calculator. Financial institutions usually provide EMI calculators on their websites. The tool ensures that you do not have to go through the error-prone process of calculating your EMIs manually. Use the 2-wheeler loan EMI calculator to get a quick and more accurate result.

Let’s understand this with an example. Let’s say you are taking a loan of ₹1 Lakh for a tenure of 12 months at an interest rate of 9% p.a. Simply, fill in these details in the EMI calculator. It will generate the result in seconds, in this case, the EMI will be ₹8,745. Let’s see how the EMI changes over different tenures and loan amounts if the rate of interest stays constant at 9% p.a.

Here are some important factors that may affect your bike loan EMI:

CIBIL Score

The CIBIL score is an important factor lenders consider before providing a bike loan. Your CIBIL score assists the lender in evaluating your creditworthiness. You must have a good CIBIL score of about 750 or more to get a loan at favourable terms.

Rate of Interest

Your bike EMI is also influenced by the interest rate offered by the lender. The greater the interest rate, the more you will have to pay in total.

Duration of the Bike Loan

The amount of your bike loan EMI is based on your loan tenure as well. The longer the tenure, the lower the EMIs will be.

Loan Amount

The higher the loan amount, the larger the EMI, as it directly affects the total repayment sum. You can also use a two-wheeler loan eligibility calculator to check the loan amount you are eligible to borrow. Consider using this tool to get an estimate of the amount you may be eligible to borrow.

Down Payment

A higher down payment reduces the loan amount, leading to lower EMIs and interest costs. On the other hand, a zero down payment leads to a higher loan amount, resulting in a higher loan amount and interest charge.

Here are the ways to reduce your bike loan EMI:

Make a Higher Down Payment

If you can pay a large sum, consider paying a considerable amount as your down payment. It will decrease your loan amount, and as a result, you will have a reduced EMI.

Select an Offer with a Lower Interest Rate

Your monthly payments will be lowered if you choose a loan offer with a lower interest rate. You may be able to identify and access such offers more easily by using a two-wheeler loan eligibility calculator. Use the insights from this tool to improve your eligibility and qualify for offers with a lower interest rate.

Choose a Longer Tenure

Your EMIs lower substantially over a longer tenure. However, the interest cost incurred over the entire tenure may increase. Choose a tenure that balances the interest costs and your EMI amount.