New Delhi, December 17: Whether you want to zip through heavy traffic or slither through narrow and knotty lanes, a two-wheeler offers greater convenience than a four-wheeler. Lower maintenance costs and fuel expenditures also contribute to their growing demand, and banks and NBFCs have made it extremely easy to own a two-wheeler. Today, with minimal documentation and a hassle-free application process, you can apply for a two-wheeler loan to buy your desired model. Lenders offer loan amounts ranging from ₹50,000 to nearly ₹40 Lakhs; you can purchase any model from a scooty to a superbike.
That said, it is important that you remain mindful of the EMI you have to pay and find the best repayment terms according to your repayment capacity.
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Two-wheeler loans - Important factors
While applying for a bike loan , you need to consider several aspects. Arguably the most important among them is the two-wheeler loan interest rate. When you repay the loan amount, it will consist of the principal and interest amounts. Thus, the EMI you pay every month will comprise the principal loan amount and the interest component.
Interest rate
Different lenders offer varying two-wheeler loan interest rates. These rates can range from 7.85% to 28%, and the lender decides the interest based on several factors. These include your age, employment status, credit score and existing liabilities. Furthermore, you will have the option to choose either a fixed interest rate or a floating rate while applying for the two-wheeler loan. If you opt for a fixed interest, the interest rate remains unchanged throughout the repayment term, regardless of the market movements. Thus, you will know the exact EMI you must pay monthly.
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A variable interest – known as a floating interest rate – is affected by market forces. Hence, depending on the market movement, it can either be less than or greater than the fixed interest. You can choose either of the two-wheeler loan interest rates while applying for the two-wheeler loan.
Tenure
Another important factor you need to assess carefully is the repayment tenure. It is the term during which you need to repay the amount in full. You can choose the tenure based on your repayment capacity; it is critical that you choose a tenure that won’t put you in a financial predicament. Lending institutions offer tenures ranging from 12 months to 60 months, and you can choose a duration that enables you to meet your EMI obligations without facing any hassles.
Down payment
Besides the two-wheeler loan interest rate and the repayment period, you need to be sensible with your down payment. Certain lending companies want the borrower to pay 15-30% of the vehicle’s on-road price, while others offer up to 100% financing of the two-wheeler’s on-road cost. Furthermore, paying a certain amount upfront can increase your chances of getting better loan terms, such as nominal two-wheeler loan interest rates.
Benefits of using a bike loan EMI calculator
Once you know the nitty-gritty involved in choosing advantageous loan terms, you need to use a bike loan EMI calculator to calculate the possible EMI amount. A bike loan EMI calculator is an intuitive and easy-to-use application you will find online, as lenders and loan aggregators provide this tool on their websites. A simple EMI calculator will have three components: the principal amount (the loan amount you will borrow), the interest rate and the tenure.
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By selecting the three variables, you will know the exact EMI amount you must pay monthly. Unlike manual calculations, which involve rigorous computations, you can either enter the values online or move the slider to increase or decrease the values. Thus, a bike loan EMI calculator is easier, faster and more accurate and gives you precise figures instantly.
Additionally, you can use multiple loan-interest rate-tenure combinations and generate an EMI amount within your financial capacity. This will also help you plan your budget and ensure you do not miss any payments. You can seamlessly meet your monthly financial obligations while affording the new two-wheeler of your dreams.
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Manual calculations
You can also perform the calculations manually by considering the two-wheeler loan interest rate, loan amount and repayment period. You can use the formula:
E = P x R x [(1 + R) N / ((1 + R) N – 1]
Where;
E - EMI amount
P - Principal amount borrowed
R - Rate of interest
N - Number of months (tenure)
Using the bike loan EMI calculator is extremely simple, and you get accurate results in a split second. You can easily understand the EMI amount you can pay without facing any hurdles and ensure you do not skip any payments. You can use the bike loan EMI calculator on Bajaj Markets and apply for a two-wheeler loan within minutes. Moreover, you can compare the loan terms from different lenders and choose a lending entity that offers the most competitive two-wheeler loan interest rates.
