Two-wheelers are the preferred transportation option for short-distance commutes among Indians. In today’s technological era, the easy availability of financing options is boosting the two-wheeler loan market. According to the CRIF High Mark report, the two-wheeler loan portfolio value in India grew by 10.6% year-on-year as of June 2022. In 2023, the Indian motorcycle market is expected to experience double-digit growth.
Customers can now apply for a two-wheeler loan online with fewer documents. Additionally, lenders provide powerful tools such as loan calculators to help customers make informed decisions.
Effective Two-wheeler Loan Planning Using an Online Calculator
A two-wheeler loan calculator is an online ready-to-use tool that helps borrowers to calculate their two-wheeler loan EMIs before applying. Here is how it allows customers to plan their loan repayment effectively.
– Determine the Right Loan Amount
A two-wheeler loan calculator is a useful tool that helps customers determine the appropriate loan amount based on their requirements. It’s important to choose an amount that can be repaid without putting a strain on their account balances.
Renowned banks and non-banking financial companies (NBFCs) offer 2-wheeler loans up to 100% of the two-wheeler’s value. However, borrowers should only apply for a loan amount that they can easily repay. By using a two-wheeler loan calculator, customers can select a loan amount that is affordable based on the Equated Monthly Installment (EMI).
– Select Right Loan Tenure
The loan tenure has a significant impact on the Equated Monthly Installment (EMI) of a two-wheeler loan. While customers with low incomes may prefer a long-term loan to reduce their monthly obligations, others may consider a short-term loan to lower the interest amount. With a 2-wheeler loan calculator, customers can easily calculate the EMI for different tenures and choose the one that best fits their financial situation.
Customers can compare EMI amount changes in different tenures and choose the best-suited one based on their monthly income and expenses. Borrowers can set the loan tenure and identify if the EMI during the selected tenure is affordable. If the estimated EMI seems high, adjust the tenure and check the result again.
– Planning for Loan Foreclosure
Most individuals aim to eliminate their debts as soon as possible. One way to achieve this is through loan foreclosure, which enables customers to close their loan more quickly. Customers can choose to prepay their loan in full or in parts, depending on their financial situation.
Borrowers who are aware of their monthly obligations can plan their two-wheeler loan foreclosure by considering the expected inflow of funds, bonuses, investment returns, or other benefits they anticipate receiving during the loan tenure. This approach reduces the interest outgo and helps borrowers to pay off their loan sooner.
By effectively planning their loan repayment, borrowers can time their investments and use their returns for loan prepayments. However, customers should note that a foreclosure/prepayment fee is charged when a loan is paid before the scheduled repayment tenure is completed.
– Apply for a Loan at a Low-interest Rate
Two-wheeler loan interest rates vary with different lending institutions. Since interest is a component of the loan EMI, it directly impacts the loan EMI. An online two-wheeler loan EMI calculator allows borrowers to compare loan costs with different lenders.
Using a two-wheeler loan calculator, individuals can estimate and compare loan EMIs with different lending institutions. This comparison allows them to make informed decisions to reduce overall borrowing costs. With manual interest calculation, the comparison can be challenging.
How to use a two-wheeler loan EMI calculator
To compute your loan EMI amount quickly using a tablet, smartphone or laptop, below are the quick steps:
- Set the loan amount that you need to buy a bike or scooter.
- Set the interest rate at which the lender provides a two-wheeler loan to you.
- Set the repayment tenor that is suitable for you to pay EMIs (Equated Monthly Instalments).
Illustration
Let us calculate the EMI for a loan using the calculator.
- Let us say the loan amount you applied for is Rs 1.5 Lakhs.
- The repayment tenure is 20 months.
- The interest rate is 6%
The loan EMI will be Rs.8,250. Within a fraction of a second, you will get the results on your device’s screen.
A loan calculator helps borrowers effectively plan their loan repayment. With a loan calculator, customers can take advantage of the flexibility of loan tenure, loan amount, and negotiable interest rates based on their credit score. The estimate is quick and clear, making it easy for potential two-wheeler bike buyers to calculate their Equated Monthly Installment (EMI) using a free and easy-to-use two-wheeler loan calculator.
