It is a winning move to apply for a bike loan only after using a bike EMI calculator. But how does an EMI Calculator work? Read on to learn more.
The love for motorcycles in India is immense and quite justified.
The cost of owning a bike is way less than a car. Furthermore, the money one would spend on fuel is also low. Then there is the upfront cost of buying a bike which is usually very low compared to a car.
On this note, it would be unwise to acknowledge the fact that prices of motorcycles in India have gone up. The price rise is significant. This is affecting the average Jane or Joe as they are unable to buy a bike with cash.
This is where traditional and non-traditional lenders come in. Leading lenders in India are offering attractive bike loan schemes these days.
Why apply for a bike loan in the first place?
The benefits of a bike loan are countless and some of the most appealing ones are mentioned below –
- First of all, unlike personal or business loans, bike loan interest rates are comparatively low. This allows the loan applicant to steer clear of additional financial burdens and instances of failed monthly budgets.
- Previously, loans came with non-flexible terms. This is not the norm anymore. Bike loans, specifically, now come with flexible repayment options. Furthermore, bike loan applicants now have the freedom to customize the loan. For instance, one can adjust the tenure and downpayment. This would allow them to enjoy low-interest rates and keep EMIs affordable.
- Back in the day, applying for a bike loan used to be a long and cumbersome process. That is not the case anymore. One can apply for a bike loan from their home. Submit documents online and enjoy paperless procedures. Furthermore, bike loans these days are awarded within the same business day! That’s amazing, isn’t it!?
- Maintaining a clean credit history and high credit score is essential these days. A person with a high credit score and clean credit history will be able to get a loan quickly. Where does a bike loan come into this picture? Well, when a person applies for a bike loan, they will be repaying the debt using EMIs. With every EMI paid, the loan applicant will be boosting their credit score and strengthening their credit history. It is as simple as that!
What is an EMI?
EMI stands for Equated Monthly Instalment. It is the portion of borrowed money plus interest a loan applicant pays to the lender every month. The number of EMIs for a loan depends on the borrowed amount and the selected tenure.
How bike loan EMIs are calculated?
Bike loan EMI can be calculated using two methods.
One is the traditional pen and paper method where one calculates using the mathematical formula given below.
P x R x [(1 + R) N/ ((1 + R) N – 1]
Here, P stands for the borrowed amount. R is the rate of interest on the borrowed amount that the borrower needs to pay along with the debt. N is the tenure of the loan or the duration sought by the borrower to repay the debt with interest. The tenure is in months or years.
The second method of calculating the EMI of a bike loan is using an EMI calculator tool. These tools are free-to-use. Loan applicants can use them to calculate the number of EMIs they would have to pay to clear their debt. One can find these tools on the official website of their preferred lender.
What is the working principle of an EMI calculator tool?
The bike EMI calculator tool is also programmed to show results by working on the aforementioned mathematical formula. The EMI calculator toll will have designated spaces for the user to put in variables. The variables will be in the form of tenure, rate of interest, and a slider for down payments. After the user fills up the blanks and presses the ‘calculate’ button, the EMI will be displayed in no time.
For more details, one should get in touch with the spokesperson of their preferred lender.