How to effectively use Bike EMI Calculator while taking a bike loan

Taking a two-wheeler loan is one of the easiest ways to finance the purchase of a bike without putting too much strain on your savings. You can easily get a bike loan nowadays but the difficult part is planning the bike loan smartly. This is where a bike loan EMI calculator comes in handy. This free online tool allows you to compute the monthly instalments with ease. It not only takes the loan interest into consideration but various other aspects like repayment tenor and amount as well to forecast the EMI. In this article, we will cover everything that you need to know about a bike loan calculator and how to effectively use them.

What is a Bike Loan EMI Calculator?

A bike EMI calculator is a free online tool that allows you to calculate the monthly instalments that you will have to pay to pay off the bike loan. All you have to do is enter a few details such as principal amount, rate of interest and repayment tenor to calculate the EMI of the bike loan. You can use this tool to understand your repayment capability.

Who Should Use a Bike Loan EMI Calculator?

Any individual who wants to buy a bike on loan has to use the online calculator. This will help reduce the chances of defaulting. A two-wheeler loan EMI calculator calculates the interest outgo and accurate EMI amount that you have to pay. You should use this calculator to arrive at a monthly instalment value that you can repay comfortably. The calculator can also be used multiple times free of cost. Using this, you can change the loan amount and repayment tenor accordingly.

How to Use the Online Bike Loan EMI Calculator?

You can use the two-wheeler loan EMI calculator by following the steps mentioned below:

Step 1: Key in the principal amount. The value can either be typed in manually or adjusted using the slider option.

Step 2: Enter the interest rate of the bike loan or use the slider.

Step 3: Key in the tenor of repayment.

Step 4: Click on ‘Calculate’ or ‘Submit’.

The calculator will show you the EMI amount instantaneously.

How Does the Two-Wheeler Loan EMI Calculator Work?

The formula that is used to calculate bike loan EMI is-

P x R x [(1 + R) N / ((1 + R) N – 1]

The bike EMI loan calculator calculates the amount for repayment after you input the following information:

Interest rate (R)-  The interest that is charged by the financial institution on the principal amount

Loan amount (P) - Amount that is taken by the borrower to purchase the two-wheeler

Tenor (N)- The time period in which the loan has to be repaid fully.

Benefits of a Bike Loan EMI Calculator

Make sure to use the bike loan EMI calculator before you take the loan. The reasons for it are listed below:

Planning the repayment plan beforehand: By making use of the EMI calculator, you can figure out the repayment schedule that best suits your budget. Just check the monthly instalment to see if you can afford it and if it does not, you can adjust the tenor accordingly and keep both the interest rate and loan amount the same.

When you increase the tenor, your monthly instalments will reduce. That being said, keep in mind that a longer tenor will increase your interest outgo. 

Free to use: You can use the calculator digitally from anywhere around the world at any time. You can try several combinations on the EMI loan calculator to come to an EMI that you are comfortable repaying. The best part about all this is that it is absolutely free and you can use the calculator as many times as you want. There are no hidden charges. Rather than making a hasty choice, this calculator allows you to pick the terms that are best for you. 

Compare bike loan offers: Another way in which the EMI calculator helps you is by letting you compare various lenders and their offers. It helps you in understanding how a small variation in the bike loan interest rate can have a huge impact on your monthly instalments.

For example: In case one bike loan lender offers you an interest rate of 12% and another of 10%. You might think that the small difference of 2% might not affect your interest that much. When you want to borrow higher amounts, this impact might be much higher and can hurt your financial wellbeing. Using a bike loan calculator can save you a lot of money and effort.

Choosing the right loan amount and tenor: You might be tempted to get the maximum loan amount but it is important to remember that this means that even the interest will also go up, Higher the principal amount, higher the EMIs and interest. The bike loan EMI calculator comes in handy in such a situation. It can help you choose the right loan amount depending on the cost of your bike, budget and future expenses.

Likewise, you can also pick the right tenor to repay your loan with the aid of this calculator. It is a known fact that tenor and EMIs have an inverse relationship, You can make smarter decisions pertaining to the loan by using the EMI calculator.

Avoiding costly mistakes: A bike loan calculator is not only accessible from anywhere but also accurate. Manually calculating the bike loan EMIs might lead to errors but with this online tool you always get accurate information.

With the information mentioned above, you can use the bike loan EMI calculator with ease and choose the best two-wheeler loan that suits your needs. Kindly remember that the loan interest rate should not be the sole deciding factor when you pick a bike loan lender. Make sure the lender’s credibility and reputation is good and there are no hidden charges when it comes to loan processing.