Lending institutions have lately introduced various dedicated tools that can assist with your financial planning towards loans and advances. These tools are designed to serve you right after you aspire to make a purchase with a loan and help make effective borrowing decisions. In the case of bike loan borrowers, a two wheeler loan EMI calculator is one such tool that is indispensable to optimum financial planning when availing the loan.
The calculator is designed to make various estimations related to bike loan borrowing so you manage your repayments conveniently and do not end up in a debt trap due to miscalculations. It can provide the much-needed assistance when availing a bike loan and can work up to bring you a wide range of borrowing advantages. Let’s take a look at what this calculator comprises and how you can use it to bring out the best borrowing decision and plan your repayments accordingly.
What is a Bike Loan EMI Calculator?
A two wheeler loan EMI calculator is a dedicated financial tool tailored to help you calculate the loan EMIs payable based on the amount you decide to borrow, the selected tenure for repayment, and the interest rate applied to your selected loan option.
It is a simple tool with a user-friendly interface that is easy to understand and use. It has 3 entry slots where you need to enter the desired or applicable values. Based on these values, it computes the outcome, which primarily includes –
- The EMIs payable
- Total interest payable
- Total loan payable
All three value can be of critical concern and are essential to know for an informed borrowing decision. The calculator is fast and accurate too and eliminates the chances of any error you might end up doing when computing such values manually.
The EMI calculator also reflects two other important results that include –
- A pie chart representing the different calculation results as a percentage of the whole so you better understand where you are placing your finances and what changes you can make to optimize this.
- An amortization schedule, which is basically a table showing the break-up of principal and interest for each EMI that you pay throughout the loan tenure. Such a schedule is reflected annually for a better grasp of the outgo of finances for you.
EMI Computation through Bike Loan Calculator
When we compute the EMIs manually, we use a certain formula to arrive at the desired results. The same formula, or rather, a more efficient version of it, is preloaded in the calculator so you can easily compute your desired loan repayment values. As these tools are free, you can access them easily through the official website of your selected lending institution.
Here are a few easy steps to EMI computation through a bike loan calculator.
Step 1: Find out which lenders provide a 2 wheeler loan EMI calculator for free online.
Step 2: Select a lender from the available options and visit their official website.
Step 3: Next, navigate to the page hosting bike loan information, and from the drop-down of the ‘Calculators’ tab there, choose EMI calculator. This will direct you to a new page hosting the bike loan calculator.
Step 4: Once the calculating tool is open, you can start entering the desired values related to the bike loan amount you need to avail, the tenure that you find suitable for repayment, and the interest rate applicable.
Step 5: Once entered, the calculator will reflect the EMI value you would need to pay for the entirety of the selected tenure.
Along with the EMI value, the calculator will also reflect the total interest payable for the entire tenure and the total loan liability, including the principal and interest amounts.
Things to Know for Optimal Use of Bike Loan EMI Calculator
Now, to maximize the advantages that an EMI calculator brings, the following are the few important aspects you must consider.
- After entering the loan value and tenure of your choice, if you do not find the EMI amount to be affordable or suitable as per your financial capacity, you can make changes to the value entered to adjust EMI.
- If the EMI amount is too low and you need additional funding, you can increase the loan amount entry at the risk of an EMI increase. Make increments up to the point that indicates maximum EMI affordability for you.
- Contrarily, if the EMIs are high, you can enter a smaller loan amount to bring down the EMIs payable. This indicates a positive correlation between the loan amount selected and the EMI payable.
- Alternatively, the tenure value entered can also be changed to arrive at a suitable EMI amount.
- If you can afford a higher EMI payment than the initially calculated value, it is ideal to decrease the tenure entered.
- In case the EMIs exceed your repayment affordability, opt to increase the tenure to reduce the installment amount calculated. The tenure chosen is thus negatively correlated with the EMIs payable.
- The tenure selected, however, not only impacts the EMIs that you need to pay but also affects the total interest accrued for the loan amount. Herein, the interest of a bike loan or any other advance increases with an increase in tenure and decreases with tenure reduction, indicating a positive correlation.
- It is ideal to strike a balance between the EMIs payable and the interest accrued for the selected bike loan amount and the tenure because a disbalance in any of them can cost you financially.
While this was all about how you can use a two wheeler loan EMI calculator for a borrowing advantage, you must also know about other crucial loan calculators that can help with efficient loan management. Some of them include a bike loan eligibility calculator, interest calculator, foreclosure calculator, and balance transfer calculator, among others. When applying for a bike loan, make sure to use tools like EMI and an eligibility calculator, which shall help you make a suitable borrowing decision based on the loan amount and tenure selected.