How We Can Calculate Two Wheeler Loan EMI?

The unadulterated love for motorcycles here in India is no news. But in recent years, this craze for motorcycles in India has been touching new heights. The hikes in fuel prices and inflation are some reasons why even the well-off are buying bikes instead of cars.

The sudden increase in the popularity of motorcycles in India didn’t go unnoticed by bike brands operating in the nation. As a result, bike brands in India started hiking the prices of motorcycles in small increments. The present situation looks like this.

Even entry-level commuter bikes entail exorbitant ex-showroom price tags. Hence, gone are the days when one could buy a bike with cash. Presently, one must apply for a bike loan and then visit a bike dealership.

Furthermore, applying for a bike loan also offers an individual an array of benefits. Some of those benefits are mentioned below - 

• When one applies for a motorcycle loan, leading lenders will ensure the application is approved in a day. It means that one can ride their dream bike home in no time.

• It is pretty easy to get a bike loan these days thanks to the paperless loan application process. One can also submit pertinent documents to their preferred lender from their home. It means one would not need to make multiple trips to a lender’s office.

• Motorcycle loans are available these days with flexible debt repayment options. One can also enjoy affordable EMIs, reasonable interest rates, and bespoke tenures if they are vigilant. It means that applying for a bike loan will not add to the financial obligations of the borrower.

• A bike loan can help a person build a spotless credit history. One will also be able to boost their credit score by repaying the borrowed money to the lender in EMIs. Spotless credit history and a high credit score make one eligible for exorbitant loans. 

How are bike loan EMIs calculated?

Bike loan EMIs are calculated by using a bike loan EMI calculator. These are free-to-use, online tools that one can find on the official websites of leading lenders in India.

One can also find these tools on the official websites of leading bike portals. Leading motorcycle brands also have these tools on their official websites.

EMI calculator tools are programmed to calculate the tentative EMI of a loan scheme. These online tools run on the basic mathematical formula that has been in use since time immemorial to calculate EMIs.

The mathematical formula referred to in the above section is as follows – 

P x R x [(1 + R)N/((1 + R)N – 1].

The variables that one can see in the above formula entail specific meanings. The meanings of the variables are mentioned below.

• P represents the money borrowed by the borrower.

• R represents the interest rate that the lender would charge on the money it is lending to the borrower.

• N represents the tenure or the time within which the debt has to be paid back by the borrower. The tenure is usually in months and not in years.

How can one use an EMI calculator?

The first step is to assign values for each variable marked as blank spaces within the tool’s User Interface. The next step is to verify the assigned values and then one has to click on the ‘calculate’ button. Within milliseconds, the tentative EMI for the motorcycle loan one is planning to apply for will be displayed.

Why must one use an EMI calculator?

A motorcycle loan is categorized as a financial obligation. This is why borrowers need to learn the tentative EMI for a bike loan before they apply for one. Learning about the tentative EMIs for a bike loan allows one to financially prepare for the loan. Financially preparing for a motorcycle loan will allow one to pay the debt in EMIs on time. On-time EMI payments will ensure one’s credit score doesn’t go down. Timely payments of EMIs also ensure that one’s credit history doesn’t get tainted.