Applying for a bike loan is inevitable these days. The ex-showroom prices of motorcycles in India have been hiked by several folds in the last couple of years. Hence, buying a bike using cash is out of the question.
A bike loan will be accompanied by EMIs. EMI is the abbreviated form for equated monthly instalment.
It is the fixed amount + interest that the loan applicant pays back to the lender monthly. This trend will continue until the borrower pays back the debt + interest to the lender in full.
Why calculate EMI?
Calculating the EMI allows the borrower to make sure that they can bear the burden of the loan.
How to calculate EMI for a bike loan?
Calculating the EMI of a bike loan can be done by using a bike loan EMI calculator. It is a nifty little, free-to-use tool that leading lenders offer on their websites.
How does the tool work?
An EMI calculator tool is programmed to run calculations based on the formula EMI = [P x R x (1+R)^N]/[(1+R)^N-1]. The meanings of the variables in the formula are as follows –
- P – is the principal or borrowed amount
- R – is the rate of interest and
- N – is the tenure of the loan.
How to use an EMI calculator tool?
- One has to visit the official website of their preferred lender and look for their EMI tool.
- Then they would need to fill up the blank spaces with variables like loan amount, tenure and interest rate.
- Then they would need to press the ‘calculate’ button.
Conclusion
To apply for a two wheeler loan, consulting with a reputed lender is strongly advised.
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