Owning a two-wheeler is one of the most crucial decisions in many people’s lives. However, high bike prices and a lack of funds is often a hindrance in buying a two-wheeler. Access to two-wheeler loans has come as a blessing for the common people. However, these loans come with lots of responsibilities attached to them. You need to have a clear idea of your finances before borrowing money from a lender.
Availing a two wheeler loan requires a lot of planning, as it will weigh on your finances for quite a few years. A two wheeler loan EMI calculator can help you calculate your EMIs, enabling you to plan your finances to fit them in your budget conveniently. It is a free-to-use online tool that accurately calculates your monthly EMIs according to the inputs you enter. You may also calculate the EMIs manually, but that process is time-consuming and slightly tedious. Below are the four easy steps to calculate your two-wheeler loan EMIs.
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Compare and Choose the Best Lender
The lender you choose makes a lot of difference in your EMI amount. When you enter the market to look for a 2 wheeler loan, you will find hundreds of lenders offering different terms and conditions. Find a lender that best suits your requirements and budget. You must factor in several points while comparing lenders, including the loan amount, interest rates, repayment terms, customer service, additional charges, eligibility criteria, documentation requirements, and others. Once you find a suitable lender, carry on with the next steps.
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Know Your Eligibility
Your eligibility also affects your EMI amount considerably. Therefore, check the lender’s eligibility conditions and ensure that you fulfil them. Most lenders’ eligibility criteria include the applicant’s age, income, and employment. Lenders also check your credit score to determine your creditworthiness. The higher your credit score is, the lower your interest rate and the easier will be your EMIs. On the other hand, if you apply for a loan that you are ineligible for, the lender will reject your loan application, impacting your credit score.
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Calculate Your Loan Amount
Knowing your loan amount is another crucial step in calculating your loan EMIs. The bigger the loan amount you borrow, the higher the interest outgo and the more considerable the EMI amount. Therefore, decide the two-wheeler you want to buy, know its price, calculate how much you can afford to pay from your savings, and accordingly calculate the loan amount you need to borrow. Although many lenders offer loans of up to 100% of the two-wheeler’s price, it is in your best interest to borrow the minimum amount possible.
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Choose a Repayment Tenure
The selection of your repayment tenure is also crucial to calculating your EMIs. Choosing a longer loan tenure reduces your EMI amount but increases your interest outgo. On the contrary, choosing a shorter loan tenure increases your EMI amount but reduces your interest outgo. Therefore, the key is to choose a repayment term with loan EMI adjustable within your monthly budget.
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Use a Two Wheeler Loan EMI Calculator
A 2 wheeler loan EMI calculator is an online tool to help you calculate your EMIs. Knowing your EMI amount beforehand helps you plan your budget and manage your finances accordingly. Enter your loan amount, interest rate, and loan term. The automated tool will calculate your EMI amount based on the details you provide. You can increase or decrease the loan tenure according to your repayment capacity until you find a term with an EMI amount suitable to your budget.
The mathematical formula for calculating loan EMIs is:
EMI = P x R x [{(1 + R)^N} / {1 – (1+R)^N}]
Here, P= Principal loan amount, R= Rate of Interest, and N= Number of months in the repayment tenure.
However, calculating the loan EMIs manually is a time-consuming and complex process that also contains a chance of errors. A two wheeler loan EMI calculator estimates the EMI amount, letting you plan your monthly budget accordingly. Choosing a loan term with convenient EMIs helps you build credit and improve your credit score with regular EMI payments. Select a lender with favourable terms and conditions and own your dream bike with a suitable 2 wheeler loan.
