When availing of a bike loan, estimating all your payables beforehand can help make significant savings on your total loan liabilities. One of the best ways to do so is to make appropriate use of a bike loan EMI calculator. Several reputed lending institutions provide these dedicated financial tools for free and make them available on their websites for easy access to all.
Using a loan EMI calculator, you can easily compute the monthly installments you would need to pay towards the loan amount availed until the agreed tenure for complete repayment. These are simple tools that are easy to use and can be accessed by anyone irrespective of whether he/she is the lender’s customer. Let’s take a better look at what these calculators comprise and how you can make use of them to improve your borrowing decision.
What is a Two Wheeler Loan EMI Calculator?
A bike loan EMI calculator is a dedicated financial tool that allows you to compute the EMIs you would need to pay throughout the tenure based on the entries you make. It has a simple user interface that is easy to understand and operate with 3 simple entries that can be adjusted through a scroller as per your need.
The entries it requires you to make include –
- The principal value of the loan amount you seek to avail.
- The tenure for which you would need to avail the advance.
- The interest rate is applicable on the advance as per your lender.
Based on these entries made, the loan EMI calculator reflects the results that comprise the following.
- EMIs or the installment that you would need to pay for the loan amount and the tenure selected.
- The total loan liability that you would need to meet by the tenor’s end.
- The total interest payable for the loan amount availed as per the applicable rate and the time involved in total repayment.
Some bike loan calculators are also designed to reflect a pie chart representing the loan principal amount and the interest payable as components of the total repayment liability that a borrower would need to meet.
Use of Amortization Schedule in the Bike EMI Calculator
These bike loan EMI calculators are also designed to reflect an amortization. Schedule for the total loan repayment tenure. It allows the user to understand the breakdown of each EMI into principal and interest components.
Now, understanding how the amortization schedule can help with loans. Repayment planning is crucial to the overall savings that you make. Although each EMI for your entire loan tenure remains constant, the principal. And interest component for each of these installments varies. Usually, lenders aim to recover a major chunk of the interest levied on. The total loan early on during the tenure to reduce the risks associated with lending. Hence, the interest component of EMIs during the initial years of the tenure is high and goes on to reduce as the tenure passes.
Conversely, the principal component for each EMI keeps of increasing with tenure advancement with a reduction in the interest component. Thus, if you plan to prepay your loan amount and close the bike loan account before the tenure’s end. Or even if you plan to switch to balance transfer, this amortization schedule can help time your repayment decision well. Thus helping save significantly on unnecessary interest payment.
Other Important Benefits of a Bike Loan EMI Calculator
The bike loan calculator offers other critical benefits to the user as well, helping him/her make a suitable borrowing decision. Below are mentioned some of them.
- The suitable loan amount and tenure selection: If planning to avail a bike loan, you can easily assess. If the loan amount and tenure selected by you suit your finances. Standing or not as well as the borrowing alterations you can make for enhanced savings.
Depending on the EMIs computed, you can assess your affordability and increase or decrease. The loan amount value entered for the calculation of an adjusted EMI amount. Note that the EMIs computed positively change proportionately with the loan amount variations.
Contrarily, the tenure selected is inversely proportional to the loan EMIs computed. You would thus need to bring down the tenure for increasing EMIs or choose a longer tenure for EMI reduction.
- Accuracy: As the EMI calculator works as per a pre-set formula, the results arrived at are accurate.
- Quick computation: Unlike manual computations, EMI calculation with this tool is instantaneous. Thus saving you time too.
You can thus rely conveniently on a bike loan EMI calculator when making a borrowing decision. Make sure to compare interest rates from other lenders and choose your financial institution. Accordingly for maximized savings on your total repayment liability.