How to Use a Bike Loan EMI Calculator to Compute your Monthly Payments
Taking a bike loan is the simplest way to finance the purchase of a two-wheeler without putting too much of a strain on your income or impacting your savings negatively. You can get a bike loan with ease today, but what you need to be careful about is planning your loan smartly.

This is when a bike loan EMI calculator plays a big role. This free digital tool is available on most websites of lenders and allows you to compute your EMIs with ease. It takes into consideration not only the two wheeler loan interest rate of a lender, but also your repayment timeline and amount to help you forecast your monthly loan instalments.

Read on to know how you can use a bike loan EMI calculator to your advantage and why it is important to do so before you avail a bike loan.

What is a bike loan EMI calculator?
When you take a bike loan, you get the advantage of using the amount to buy your two-wheeler and repaying it in monthly instalments instead of all at once. The instalments are called EMIs (equated monthly instalments) and allow you to repay the loan over time.

The time you choose for repayment is called the loan’s tenure. EMIs consist of not only your bike loan amount or principal, but also the interest you pay to the lender, which is the cost of borrowing the loan. The interest depends on the two wheeler loan interest rate that the lender charges you.

So, your EMIs are dependent on three factors:
• Your two wheeler loan interest rate

A bike loan EMI calculator helps you compute your EMIs by taking these three factors into consideration. It is an easy way to do the EMI calculation, which you can also do manually or by using an Excel sheet. However, a bike loan EMI calculator gives you accurate results every time and offers instant results.

It is based on the following formula:

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

P refers to the principal, R refers to the interest rate applicable per month and N stands for the number of monthly instalments.

As you can see, this isn’t the easiest mathematical calculation to do, especially if you want to do it multiple times by changing the variables. That’s why using a bike loan EMI calculator is so helpful.

How to use a bike loan EMI calculator
Some of the most popular bikes in India cost around Rs.1.5 to Rs.2 Lakhs. Assuming that you decide to avail a loan of Rs.1 Lakh, here’s how to use a bike loan EMI calculator.

Step 1: Visit the a bike loan EMI calculator page on the lender’s website or application
Step 2: Enter Rs.1,00,000 into the loan amount section or use the slider if that is more convenient
Step 3: Add the tenure in months or years as per the calculator you use; let us consider a tenure of 12 months
Step 4: Input the two wheeler loan interest rate of your lender; let us consider a 10% interest

Once you add these details, the bike loan EMI calculator will instantly show you the monthly EMIs as well as the total interest you will pay. In this case, the results are as follows:
EMIs: Rs.8,792
Total interest: Rs.5,499

This way, you can check what your overall interest dues are so you can understand the cost of borrowing. Similarly, you can consider the EMI and see if you can afford it as per your monthly budget and fixed expenses.

Consider another example: Keeping all other things constant, let us assume that you get an interest rate of 8.5%. In this case, your three parameters will be:
Loan amount: Rs.1 Lakh
Tenure: 12 months
Two wheeler loan interest rate: 8.5%

In this case, the bike loan EMI calculator results will show:
EMIs: Rs.8,722
Total interest: Rs.4,664
As you can see, your monthly instalments and your total interest dues have reduced. In fact, your total interest dues have reduced by 15%!

Benefits of using a bike loan EMI calculator
Using the bike loan EMI calculator is key before you take a bike loan. There are many reasons for this as follows:

• Plan your bike loan repayment with ease
By ensuring that you use a bike loan EMI calculator, you can figure out your ideal repayment schedule. Simply check the EMI to see if it fits your budget. If it doesn’t, you can increase the tenure and keep the loan amount and two wheeler loan interest rate the same.

By increasing the tenure, your EMIs will reduce. However, remember that a longer duration will increase your overall interest dues. By balancing this for the best results, you can make sure the EMIs will not burden your finances and you can repay the loan on time.

• Free to use, as many times as you want
You can try various combinations on the bike loan EMI calculator to arrive at the most suitable EMI. The best part is that you don’t have to pay a penny for this convenience, as this online calculator is free.

Rather than making a rash decision, the bike loan EMI calculator allows you to choose the best terms for yourself as there is no limit to how many times you use it. So, you can make informed decisions when borrowing, each and every time!

• Use it on the go
You can access the bike loan EMI calculator digitally, be it on an app or a website, from anywhere and at any time. Whether you are commuting to work, travelling with your family or considering loan offers on the move, this calculator is always within reach.

Use it whenever you need to and plan your bike loan with ease.

• Compare loan offers
Another important way in which a bike loan EMI calculator helps you make a practical decision is by allowing you to compare lenders and their offers. It aids you in understanding how even a small difference in the two wheeler loan interest rate can have a big impact on your EMIs.

Take the example above. Say one lender offers you a two wheeler loan interest rate of 10% and another of 8.5%. You may think that a difference of 1.5% may not affect your cost of borrowing too much.

This may seem to be true since your EMIs reduce from Rs.8,792 to Rs.8,722, which is only a difference of Rs.70, but isn’t a penny saved a penny earned? What’s more, the real difference is between your total interest dues, which went from Rs.5,499 to Rs.4,664, which is a difference of 15%.

When you seek to borrow higher sums, this impact may be much higher and can affect your finances. So, using the bike loan EMI calculator helps you understand which offer is best for your pocket.

• Select the right loan amount
There are times when you may have some room when it comes to choosing a loan amount. If you have some savings for a down payment, you may be tempted to use them or get the maximum loan you can avail for your bike purchase.

You can use the bike loan EMI calculator to see how a lower loan amount can affect your monthly instalments as well as your interest payment. Usually, the higher the principal, the higher are your EMIs and your total interest and vice versa.

• Choose the ideal tenure
Similarly, you can select the right duration to repay your bike loan with help from the bike loan EMI calculator. As you know, the tenure and EMIs share an inverse relationship.

• Avoid costly mistakes
Finally, a bike loan EMI calculator is not only right at your fingertips, but also always accurate. Manual calculations may lead to errors, but this digital tool ensures you get instant results that are precise and exact. Thus, you can rely on it to plan your bike loan.

Armed with this information, you can proceed to use a bike loan EMI calculator and select the best bike loan for your needs. Keep in mind that the two wheeler loan interest rate is not the only deciding factor when you choose a lender.

Ensure that the lender is well-known, has good digital customer service, allows you to apply with ease and approves bike loan applications instantly. Also make sure you pick a lender who is truly transparent about the other fees and charges associated with the bike loan and has simple eligibility terms.