Why You Should Use EMI Calculator Before Applying For A Bike Loan

Two-wheelers have become an inevitable requirement for almost every Indian household and businesses, especially against the backdrop of the recent pandemic, wherein online sales are becoming increasingly popular and public transport is on a halt.However, making a one-time payment is not suitable for every humble pocket, and availing a two-wheeler loan is the best option in such scenarios. Once you have decided to opt for a bike loan, the next challenge is to determine whether it will be reasonable for the borrowers to pay monthlyinstallments with respect to their monthly income and other unavoidable liabilities.Only after the repayment of the last EMI, the vehicle is hypothecated to the borrower.

With plethora of financial institutions offering a two-wheeler loan, with attractive features such as zero down payment bike loan, choosing the right financial vehicle to service your funding requirements can be difficult.This is where an EMI calculator comes into picture.

What is an Equated Monthly Installment (EMI)calculator?

EMI has two components -Principal amount andaccrued interest. To calculate it, you need the following variables -  
 

• Principal Amount
• Interest Rate
• Tenure of the loan

Repaying a loan via EMI is popular largely due to the fact that the borrower repays a part of the principal amount with every monthly installment, reducing the outstanding balance and accrued interest. The EMI can also vary based ontype of interest rate - floating, fixed, or hybrid.Once you determine the EMI, you can accordingly plan your budget and other fixed expenses to repay the loan.

Also Read: All You Need To Know About Your' EMI

How an EMI calculator can help you take the right decision regarding a bike loan -
 

• Accurate data

Preparing a loan amortization schedule entails complex calculations, which, if not done correctly, can result in the wrong output. It is simple, any calculation made with a pen and paper is subject to human error and you do not really wish to mess up, as it entails a monthly expenditure from your hard-earned money.
 

• Quick & Easy

Using an online calculator merely requires you to input some required data and the EMI amount is determined within a matter of few seconds.Why exhaust yourself with these complex calculations when you can get the answer in a few seconds?

Also Read: 5 Tips to Pay Your Bike Loan Easily
 

• Accessibility

Many online EMI calculatorsare easily availablefree of cost. You can access them quickly and simply by changing the parameters.You can try different combinations to decide what type of loan will suit you best. In fact, you can experiment with the calculator and reach out to that magic number that you can repay on a monthly basis.
 

• Plan your finances

Once you have come up with a reasonable EMI numberthat can be paid easily, you can plan your personal finances accordingly. In short, the calculator will help you determine what is doable for you, so that you can modify your personal budget to accommodate the monthly installment.
 

• Comparing loans

One crucial utilityof the EMI calculator is the ability to compare different loans to suit your requirements and type of vehicle. In some cases, if you think that the EMI is unaffordable, you may even think of opting for a different model. Many online platforms offer you the services to check eligibility based on pre-set parameters and compare loans based on the EMI.

Also Read: Factors that Affect Interest of Bike Loan

To conclude

Buying a bike on EMI definitely makes sense when you have to work with a tight budget. Using a bike loan EMI calculator will make your life easy, as you will be able to make an informed choice about the type of loan to avail. However, bear in mind that the amount is dependent on the variables that you provide as input to the calculator. The EMI calculated by the financial institution offering you the loan may differ even if there is a slight change in any of the variables. This may occur if the loan amount is lower than the expected amount due to non-eligibility or there is a change in the market interest rate.