Having a bike is the desire of almost every Indian in the present day. Whether you are a lady or a guy, availing of a new bike is always a great deal you want to happen. However, it’s not always easy to buy bikes in India with all liquid money. The high cost of bikes and the remaining processes are there to increase your budget.
Therefore, some private companies, along with some Government sectors, provide you the facility to avail of a bike loan against your documentation. They provide you the facility to pay EMI against your purchase within 24 months or 36 months. The officials use an EMI calculator to calculate your desired EMI against your loan. Let’s learn everything about the EMI calculator for a bike loan.
What is an EMI calculator?
The calculator term is tricky to understand. In addition, you may have a confusion about how a calculator can calculate the amount of EMI. Well. It’s a process of calculating the amount you have to pay to the concerned loan provider. You have to put the data, and it calculates the number of months you need to pay the amount. In the case of a finance bike loan, it will always help you to get the exact calculation.
Two methods of calculating your EMI against bike loan
Here are the two methods you can use for calculating your bike loan EMI.
Manual calculation using a formula
You can calculate the EMI value using the formula P x R x [(1 + R) N / ((1 + R) N – 1]. P stands for the loan’s principal amount, R denotes the relevant rate of interest, and N is the loan’s duration in months. You can have the EMI amount without any hurry. However, it takes some delays during calculation.
Automatic calculation with a bike EMI calculator
This is a faster, easier, and more accurate technique for EMI calculation. Here you just need to enter three primary inputs – the principal amount, the rate of interest, and the loan term. After that, the calculator will provide instant answers against your inputs. If you are going to take a finance bike loan, it will help you to save time during the process of purchase.
Factors that can affect your EMI amount
As the most preferred transportation medium in India, several factors can influence the EMI calculation of your bike loan. Some of these are here.
Your Credit Score
When you approach a loan provider for a loan for purchasing a bike, one of the first aspects they take note of is your credit score. Your credit score is a number that is assigned to you by banks or any credit rating agencies after taking various factors into account. It influences the EMI calculator for bike loan regarding the principal amount you’ll get from them. The factors include the total number of loans you have taken in the past and missed payments (if any).
Credit rating agencies fix a score on a scale of 900. Anything above 750 is taken to be a good score. Your credit score helps the bike loan provider assess your creditworthiness so that they can understand whether or not you can pay the EMI. To secure a bike loan with a low rate of interest, you have to have a good credit score. This will let the loan provider know that you are good for the amount you owe.
The second factor that can affect your EMI calculation against the loan for your bike is the total amount of loan you have applied for. Most financial bike loan providers offer up to 85% of the on-road price of your desired bike as a loan amount. Therefore, choosing a higher-cost bike can increase the loan amount along with the EMI amount. You can use a bike loan EMI calculator to get the accurate amount you have to pay.
When you request a higher loan amount, the risks increase simultaneously. Therefore, the finance bike loan providers charge a higher interest rate to cover unexpected losses and justify their risks.
As you know the longer tenure will increase the EMI rate of your loan amount. There is a simple reason behind it. When you take a longer time to pay back your loan amount, the risks increase simultaneously. To justify the risk, finance bike loan providers charge a high rate of interest in EMI calculation.
You need to choose a shorter tenure to decrease the interest rate in the EMI calculator for a bike loan. You can figure out how much you need to pay per month once you purchase a two-wheeler.
Getting the proper EMI amount against your bank loan for a bike is not easy. Therefore, you can take the help of the loan providers who use their exclusive EMI calculators to give you proper facilities during the bike purchase.