Over the years, bike loan availability and accessibility has been simplified by lending institutions to allow easy financing for vehicle purchase. These advances come with simplified terms that prove to be favorable to the borrower in the long run. Financial institutions also provide useful features, allowing for easy management of the loan as well as affordability. To aid prospective borrowers in making suitable loan decisions, several reputed lenders also provide bike loan EMI calculators.

Using the tool can help one assess their overall affordability and make a borrowing decision whereby the repayment requirement easily accommodates their monthly income. Financial institutions also provide other calculating tools, like eligibility calculators and foreclosure calculators, that enable one to make important financial decisions. Let’s take a better look at what the EMI calculator comprises, its use steps, and its benefits thereto.

Bike Loan EMI Calculator – Meaning, Scope, and Use

A bike loan EMI calculator is a dedicated financial tool with self-help features that allow users to assess how much they should avail to keep their EMIs affordable. It is easy to use with simple features and requires you to make only 3 specific entries to obtain the desired result.

The calculator’s interface is simplistic and intuitive, and the results are accurate. Also, it takes near to no time to obtain your results through the financial tool’s use.

The scope of this calculator’s use extends to several aspects listed below.

– It can be used to compute installments when purchasing a bike on EMI.

– You can also check the total interest payable for the selected loan amount over the chosen tenure.

– The computation of total loan liability payable, combining the total principal and interest components, helps assess the long-term affordability of your bike loan.

– The calculator also reflects and pie chart representing the shares of principal and interest out of the total loan liability.

– Another computational scope of an EMI calculator is the representation of an amortization schedule, which indicates the principal-interest break-off for each EMI payable. The schedule, represented as a table, also computes the loan outstanding after each year completed for the tenure.

Using a bike loan EMI calculator is simplistic with only a few steps involved. Complete the following steps to compute your loan EMIs.

– Enter the loan amount you seek to avail under the principal section.

– Provide a suitable tenure for which you plan to avail the loan, expressed in months. For instance, if you need the loan for 4 years, the tenure entered would be 48 months.

– At last, enter the interest rate applicable on the bike loan with your selected lending institution. Make sure to confirm the rates with your lender before calculating as it can ensure appropriate computations.

Once you have entered these three values accurately, the calculator will compute the mentioned results immediately, and always without any delay. You can thus assess your affordability based on such results.

The calculator uses the following formula for the computation of the said results.

EMI – P x R x (1+R)^N/((1+R)^N – 1)

In this formula,

P goes for the principal or loan amount selected, R indicates the rate of interest, and N stands for the tenure, precisely the number of months included in the tenure years.

Bike EMI calculators are among the financial tools that lenders and intermediaries provide for free to help prospective borrowers complete their assessments. If you have selected a reputed lender to avail of the loan from, you are likely to find the EMI calculator on their website for free.

Benefits of Using a Bike EMI Calculator

The usefulness of a bike loan EMI calculator extends far beyond the results it calculates. Below given are some of the most useful benefits of these financial tools.

1. When computing the EMIs payable, borrowers have an option to change the entries

made to determine the EMI that best suits their incomes. The interest rate entry, however, remains constant. When making changes to the loan amount, one must know

that it impacts the EMIs as well as the total interest payable in direct proportions. Contrarily, the tenure entered is inversely related to the EMIs payable while leading to proportionate changes in the interest payable. While lower EMIs computed for longer tenures may lead to the latter’s selection,

consider its impact on the interest amount too for long-term affordability.

2. The pie chart indicating the interest and principal components of the loan liability can be used to assess

how much additional amount you need to pay for borrowing a certain value. Accordingly, you can compare among different lenders to choose from.

3. The amortization schedule allows a user to assess the principal and interest components payable for each EMI, helping borrowers to time their repayments better and make wise prepayment decisions.

A bike loan EMI calculator also enables users to compare various loan offers for suitable borrowing decisions. When availing the loan, use an eligibility calculator as well to check your maximum loan availability based on your financial standing, and choose a borrowing amount accordingly when applying.