General
Life
Bike Loan EMI Calculator
Loan Amount
10000
10 Lakh
Tenure (Years)
1
7
Interest Rate (P.A)
1
20
Monthly EMI
₹
17,761
Principal
Amount
16,00,000
Interest Amount
₹ 9,57,568
Total Payment
₹25,57,568
Two Wheeler Loan EMI Calculator - An Online Tool
In the Indian market, bikes range from commuter ones to the higher-end sports models. Regardless of the two-wheeler you choose to purchase, financing it from out of your pocket can sometimes be difficult without availing a bike loan.
However, the first thing that comes to mind when thinking about availing such a loan is the repayment liability associated with it.
Availing a bike loan without understanding your EMI payments against it can be damaging to your financial security in the long run.
Therefore, you must utilise an online bike EMI calculator beforehand to assess how much you would need to pay every month to service this loan.
If you are in search of one such reliable calculator online, we, at Digit, have made one available right on our website! But, first, here is all you need to know about bike loan EMI calculator.
Table of Contents
What is Bike Loan EMI Calculator?
When you avail a loan to purchase bikes or scooters, you need to repay the same through equated monthly instalments or EMIs. The exact monthly liabilities from the loan depend on three major factors.
A bike loan EMI calculator considers these three factors to determine just how much you would need to bear as EMI for a particular bike loan. These tools are generally available online, with free and unlimited access for all.
As a borrower, you need to enter the necessary information into this online tool. After doing so, the calculator will display your instalment amounts, along with other relevant data, including total interest payable and the amortisation schedule.
Therefore, with a bike loan calculator, you can form a good idea about your future EMIs even before applying for the loan.
Components of Bike Loan and Bike Loan EMI
Before you can get down to the calculation part of your bike loan EMIs, you should first understand the three major factors that determine your liabilities every month. These are the following:
Principal Amount
In simple terms, the principal is just the amount of money you are looking to borrow from the bank or NBFC of your choice. If you borrow more, you will need to pay higher sums as EMI, and vice versa. Thus, to ensure that your monthly instalments stay under control, you should try to limit the bike loan ticket size and finance as much of the bike’s cost as you can from your pocket. In a bike loan calculator, you need to enter the principal amount details in the field marked accordingly.
Interest Rate
Apart from repaying the principal amount, borrowers also need to service the interest on the same. Interest rate refers to the percentage at which the bank or NBFC charges interest on your two-wheeler loan. Higher rates of interest will lead to an increased cost of loan, which translates into higher EMIs, and vice versa. You cannot control the interest rate for a bike loan, since it is determined by your lender. However, you can compare the interest rates of several lenders and stick to the bank that levies the lowest rate of interest.
Tenure
Tenure is the length of your loan repayment period. If you opt for a year’s tenure, you can repay the loan sooner, but your EMIs would be higher than if you opt for a longer term. You must decide the tenure of your bike loan based on your financial health. It is always wise to clear dues sooner if your wallet allows it. However, if you are in a tight spot, always extend the tenure to lower your EMIs.
What is the Formula to Calculate Bike Loan EMI?
If you want to avoid using the bike loan EMI calculator and determine your EMI manually, you can do so with the following formula:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
Wherein,
● P = Loan principal
● R = Rate of interest/100
● N = Loan tenure in months
To illustrate, let us consider the following example:
To purchase a sports bike, you avail a bike loan of Rs.10 lakh at an interest rate of 12%. You opt for a tenure of 5 years for repayment of the amount along with interest.
Now using the formula, we get
EMI = Rs.[1000000 x 0.12 x (1+0.12)^60]/[(1+0.12)^60-1]
EMI = Rs.22,244.45
As you can see, manual calculations can take a while. Moreover, due to the intricacies, you may end up making a mistake while calculating your bike loan EMIs.
A bike loan EMI calculator is just the right tool to eliminate the chances of errors in the calculation.
How else does a bike loan calculator help you?
Benefits of Using Bike Loan EMI Calculator
Using the complicated formula that banks and NBFCs follow to determine your EMIs and implementing it to know your EMIs can be a cumbersome task.
While manual calculations are possible, using the calculator tool instead is the safer and more convenient option for the following reasons:
Quick and Hassle-Free
Manual calculations tend to be lengthy, and can consequently take a long time to complete. If you try to complete the same too quickly, it can lead to erroneous assumptions. A bike EMI calculator, on the other hand, requires milliseconds to assess the data you provide and compute your EMI liabilities from the said loan.
Easy to Use
The calculator’s interface on Digit’s website is simple to understand and navigate; to the point that almost anyone can operate it. The fields are marked appropriately, and you must only enter the figures accordingly to reach the desired outcome.
Always Accurate
When you calculate your bike loan EMIs manually, you will always be unsure about whether the results you reach are accurate or not. Remember that even a minor mistake in calculations can seriously undermine your assessment of the said loan. To eliminate such risks, it is always better to use a bike loan calculator. No matter how many times you use the tool, it will never display erroneous results.
Free and Unrestricted Usage
The bike loan EMI calculator available on our website is completely free to use. Moreover, you can utilise the tool as many times as you wish or need. We do not restrict usage in any way. This can be an extremely useful feature, especially when you are comparing the various bike loans on offer to check for the most affordable one.
Convenient
Lastly, using such an online loan calculator means that you do not need to bother undertaking all the hassle with a pen, paper and calculations. Manual calculations may force you to engage in complicated multiplications and divisions, which require intense rough work. Fortunately, in case of bike EMI calculator, the tool does all the hard work on your behalf, allowing you to determine your monthly liabilities on the go.
Additional Details
Besides the monthly instalment amount, these calculators often also display other useful information to borrowers. For example, some bike loan calculators also display a loan’s amortization table as well. With it, you can see just how the interest and principal component of your EMIs change as you move on with repayment. A few tools may also highlight your total interest amount.
How Does Bike Loan EMI Calculator help in planning and purchase?
A bike loan calculator is instrumental while planning your repayment and financial future during the loan tenure. Here are some aspects that the tool helps you gauge:
Know how much you can avail without overburdening your Finances
While opting for a loan, it can be very easy to go overboard and borrow a substantial sum. Doing so may help you buy your dream bike, but it will leave your finances in a state of disarray. When it comes to the EMIs for such a considerable loan, you may find it particularly difficult to repay.
Using a calculator to determine your EMIs before availing a loan, however, will allow you to make an informed decision. If you feel the instalments are just too high for your chosen loan, try altering the principal sum and tenure until you reach the desired outcome.
A bike loan calculator can help you plan your budget for the loan repayment period so that you can service your EMIs effectively without sacrificing other expenses.
Helps You Choose the Most Suitable Loan Tenure
You may be tempted to pick the longest tenure on offer, but is it the right decision?
A bike loan EMI calculator reveals how the total interest payable on the loan also increases when you opt for longer repayment spans.
Therefore, if you are financially capable of it, shorter tenures will help you keep your overall expenses contained. You can try various combinations of tenure and principal amounts until you reach the correct balance between interest payments and EMIs. Doing this is much simpler and convenient when using a bike EMI calculator.
Indispensable for Comparing The Various Loan Offers
A bike loan EMI calculator’s most important functionality is that it allows you to compare the EMIs for such loans from various lenders in the market.
With different interest rates, your bike loan EMIs can differ significantly, based on your chosen bank or non-banking financial institution.
Comparing the diverse loan offers is the best way to determine the right option in your case. Manual calculations would make such comparisons particularly taxing and time-consuming. Fortunately, the case is not the same when using an EMI calculator.
What is the Bike Loan Amortisation Schedule?
In case of a bike loan, as stated previously, borrowers repay using EMIs. Although the EMI amount remains constant throughout the loan tenure, the components of these EMIs are subject to change.
Generally, EMI consists of a certain ratio of principal to loan interest. This ratio keeps changing with each passing month.
During the onset of the loan repayment, for example, EMIs primarily consist of the interest component, while the principal component is minimal.
As you reach the end of the repayment period, your EMIs would consist mainly of the principal portion, with almost minimal interest.
The complete breakdown of the interest and principal portions in your every month’s EMI is represented using a table.
This is known as the amortisation table or schedule. It can be extremely useful, especially when you decide to prepay or foreclose the bike loan in question.
Documents Required to avail a Bike Loan For Salaried Professionals
Now that you know everything about 2 wheeler loan calculators, here is some information regarding the documentation necessary when availing a bike loan from reputed lenders in India. Keep in mind that self-employed and salaried individuals need to furnish different documents.
Identity Proof
Aadhaar card, Voter ID, passport, driving license, PAN card, etc.
×
Address Proof
Aadhaar card, passport, driving license, Voter ID, utility bills, etc.
×
Signature Proof
You need to provide a proof of your signature to the lender, as it will authorise your purchase of the bike in question at the dealership.
×
Income Proof
Salary slips and bank account statement for a specified number of preceding months.
×
Documents Required to avail a Bike Loan For Self Employed
Identity Proof
Aadhaar card, driving license, PAN card, Voter ID, passport, etc.
×
Address Proof
Aadhaar card, Voter ID, driving license, passport, utility (electricity, water and gas) bills, etc.
×
Income Proof
Audited balance sheet of the business, profit & loss statement and income tax returns for the previous two years.
×
Signature Proof
A proof of your signature that denotes you as the buyer of the bike in question at the dealership.
×
Bike Loan Tax Benefits
If you are currently paying off your bike loan dues, you should know that you may be eligible for tax exemptions on the same.
However, you can only claim this benefit if the two-wheeler in question is operated for business purposes only.
This also means that salaried professionals cannot claim any tax deductions for their bike loans.
If you are a self-employed individual availing a loan to buy a bike for your business, you can enjoy three types of tax benefits. These are as follows:
- Save Interest as a Business Expense - You can claim a tax deduction on your bike loan’s yearly interest payments by including this amount under your business expenses.
- Depreciation Cost - a portion of the sum you spend to maintain your bike in perfect condition can also be claimed as tax deductions
- Transportation Cost - All your fuel expenses on the two-wheeler can be claimed as tax-free expenses in any given year.
Keep in mind that if the government finds any discrepancies regarding the usage of your claimed business two-wheeler, your tax deductions from the same may be revoked.
With the above information on bike loan EMI calculation and such, you can easily proceed to avail a loan to purchase your dream two-wheeler without reservations!
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FAQs related to Bike Loan EMI Calculator
How can I calculate my EMIs without knowing the rate of interest on the bike loan?
If you do not know the interest rate that a lender is charging on a bike loan, you can inquire about the same. Based on what they quote, you can calculate your monthly liabilities from such a loan.
However, you cannot use the bike loan calculator to figure out your EMIs without knowing the interest rate applicable since it is a major determining factor.
What are the steps to follow when using a bike loan EMI calculator?
Using a bike EMI calculator is simple. Simply search for Digit’s calculator online and click on the website page. After it opens, enter your loan’s principal sum, interest rate and tenure in the relevant fields.
Click on calculate and there you go! The tool will display all the necessary data, such as the EMIs, total interest payable and the total cost of loan.
How many times can I use the EMI calculator in total?
You can use our bike loan EMI calculator as many times as you like. The tool is completely free. Furthermore, it does not restrict usage in any means. Therefore, you can use the calculator without any hindrance.
How can I reduce interest charges on a bike loan?
The only way to alter the interest offerings from the various banks is to build your credit score. People with high credit ratings can always avail such loans at favourable terms when compared to those who are less creditworthy. You should aim for credit ratings of 800 and above to secure bike loans at minimal rates.
Are bike loans secured or unsecured loans?
Bike loans may seem like unsecured credits at first glance, but it is not so. While you do not have to pledge any asset against the sum you borrow, your new bike remains hypothecated to the lender until the debt is cleared. If you are unable to repay the loan on time, the bank is free to recover its losses by selling your bike.
Why do self-employed individuals qualify for tax deductions on bike loans?
Self-employed individuals who buy the two-wheeler for the sole purpose of business use can claim tax benefits on the interest payable every year for the said loan.
In these cases, you can show the interest on your bike loan as a business expense on which the government does not levy any taxes.
However, for salaried professionals, a bike purchase is automatically treated as a luxury item, which does not qualify for tax deductions.
Can I prepay or foreclose my bike loan?
You have the option of prepaying or foreclosing the bike loan whenever you can. Thus, if you have a sudden inflow of cash, you can either pay off a significant portion of your outstanding sum or clear the dues completely.
Foreclosing a bike loan may lead to you incurring additional charges, which you must consider before going ahead with the move.
Does a bike loan calculator reveal my new EMI after I prepay a portion of my bike loan?
You can use a bike loan EMI calculator to determine the new monthly instalments for your bike loan after you prepay a significant portion of the dues.
To do this, simply determine the outstanding principal after prepayment is complete, along with the remaining tenure for repayment. Use these two factors, along with the interest rate, to determine your new EMIs for the loan.
How can I avail a bike loan if my credit score is not high enough?
If your credit score is too low for a bike loan, you can apply with a co-guarantor, whose credit rating meets the minimum criteria.
The bank will also consider the co-applicant’s income when determining the maximum loan amount you are eligible to avail. Thus, applying with a guarantor can boost your chances of acquiring sufficient credit.
Does a bike loan cover the cost of insurance and registration of the vehicle?
Unfortunately, the bike loan amount only covers the ex-showroom price of a bike model. You will need to bear the cost of insurance and registration from your own pocket.
Therefore, consider these additional expenses while buying a bike since they are integral to operating the vehicle on Indian roads.