As the spectrum of financial products and services expands, availing a loan has become easier than ever. In this fast-paced world, where many are vying to purchase a two-wheeler for the convenience of everyday commute, bike loans are not far behind. You can thus easily secure a bike on EMI if you meet the right eligibility requirements laid down by your selected lender.
However, like any other loan or advance, a bike loan also creates a financial commitment that can extend anywhere between one and four years. Thus, it is essential that you plan your finances for the years ahead when you need to make repayments in set EMIs. One of the best ways to plan ahead is to estimate the instalments payable towards your bike loan repayment throughout the tenure. We bring you a detailed guide on how you can plan your bike purchase through EMI calculation.
Steps to Calculate EMIs for Your Bike Loan
Compare and finalise the price of your selected bike model
Once you have selected the vehicle model you are looking to finance through EMIs, the foremost step is to estimate its cost. While bike models mostly sold at an average market-wide price, your selection of a suitable seller can reduce the actual price you pay when purchasing the bike on EMI or otherwise.
You must thus research the market and compare sellers to arrive at the best price offer for your selected bike model. Your price can also vary with the model variant selected, which you must take care of in determining the actual price.
Select a suitable funding option
The next plausible step after bike price estimation is to go for the right financing option for your desired bike purchase. The financing option can be looked for either with your bike dealer, whereby the dealers usually tie up with various lending institutions for hassle-free bike financing.
As you would usually get to choose among different lenders, you can look out for factors like the down payment needed, the time taken for loan processing, etc. Note that the vehicle’s entire on-road price is not financed by the lender, and the best you can get in the market is up to 95% of the bike’s value, with the financing amount extending up to Rs.1 Lakh. You need to pay the remaining amount upfront as down payment to secure funding.
Consider the maximum tenure available and rates of interest
You must also take care of two other essential factors that can significantly determine the EMIs payable, which include the repayment tenure and the interest rate applicable. With some of the best financial institutions providing loan for bike on EMI, the tenure can extend up to 48 months.
As for interest rate applicability, while the lowest rate is always the go-to option, you must also consider the type of interest calculation, i.e., fixed or floating to accurately estimate the EMIs payable.
Proceed with EMI calculation
Once you have considered all the steps mentioned above, you can proceed with EMI estimation with the help of dedicated financial toll Emi calculator available online. In this calculator, you would need to provide the following details –
- The loan amount you seek to avail.
- A suitable tenure option as per the loan amount selected.
- The applicable interest rate.
- Any other fixed charges.
Once you have entered these values, the calculator would display the EMI amount you would need to pay throughout the tenure. You can change the loan amount and tenure values to arrive at an affordable EMI option.
Availing a bike on EMI has further been eased with simple eligibility requirements and easy online processing of two-wheeler loans. Make sure you keep all the required documents ready before applying for quick and fast-tracked processing of your bike loan.