Two wheeler purchase via bike financing has simplified vehicle ownership for many people in India. The easy availability of these loans mean an individual can get quick access to financing to complete purchasing the bike of their choice. These loans also come with minimum eligibility criteria that one needs to fulfil to avail funding. Plus, the secured nature of these loans means low interest rate levy, which makes these advances affordable for a large borrowing segment as well. All these features combined make bike loans significantly desirable as compared to other financing options available for bike purchase. To make borrowing even more simpler, lending institutions have provided financial tools like bike EMI calculator and eligibility calculator.
These financing tools are designed as self-help tools that assist the borrowing individual with determine how much to avail as a loan, what repayment tenure to select, how much EMI to choose and such other critical aspects. Let’s get to know in detail about what these calculators comprise for a better understanding of how you can make the most of them.
Types of Bike Loan Calculators
Let’s begin with understanding what are the primary types of bike loan calculators that one can use to assess their loan decisions based on the results obtained. Financial institutions primarily provide two types of loan calculators, namely the bike EMI calculator and the eligibility calculator, to help aspiring borrowers with their loan decisions. These tools are dedicatedly designed to compute values that can allow the borrower to assess multiple aspects related to their loan decisions.
– Bike EMI calculator meaning and scope
A bike loan EMI calculator, sometimes also referred to as a bike loan interest calculator, is a self-help financial tool that has been designed to help make assessment related to the loan amount affordability and such other aspects. The calculator computes three primary values, namely the loan EMIs payable towards the two wheeler finance repayment, the total interest payable for the entire loan tenure, and the total loan liability payable, including the loan principal and interest components.
Along with these, some sophisticated bike EMI calculators also represent the total loan liability via a pie chart to enable percentage representation of the principal and interest components of the loan. Further, these tools also display the amortization schedule that represents the loan liability as yearly outstanding until the last year of repayment. Other values in the schedule include the principal and interest component of each EMI payable, allowing the borrower to gauge how much they are shelling as interest.
Lenders have a tendency to front-load their EMIs and recover a higher part of their EMIs as interest, with gradually reducing interest and increasing principal value as the tenure advances. Due to this, the borrower would have paid more of the interest component of their total loan liability than the principal component at any given time on the tenure. An estimation of such repayment can mean well-timed prepayment decisions for higher interest savings if the borrower chooses to do so. All these results combine can make the borrowing and repayment journey effortless for individuals.
– Bike loan eligibility calculator meaning and scope
An eligibility calculator is another financial tool that helps borrowers determine their overall borrowing suitability to choose a loan amount that is easy to approve. The calculator is based on the function of various risk factors associated with one’s borrowing profile to estimate how much loan amount they are eligible for. Since it has already considered the major risks to such borrowing, the loan amount so calculated ideally gets easy approval from the lender.
Like a bike EMI calculator, an eligibility calculator can be a great financial tool in assessing your borrowing decision. It requires you to provide simple details related to your financial profile, which can include your monthly and annual income, previous repayment commitments that you might be carrying, your age, your city of residence, and such other crucial aspects. Once you have entered these details, the tool calculates a loan amount that is suitable to borrow as per your financial profile. And don’t miss the festival offers on hero bikes 2022.
It is ideal that you choose a loan amount within this limit as it stands better chances of approval. If you choose a loan amount within the calculated value, your chances of receiving easy approval increase as it improves your repayment capacity and enables suitable negotiations with the lender to secure preferred terms on the advance.
How to Make the Most of Your Bike EMI Calculators?
While an eligibility calculator is a useful financial tool, its usage is not elaborate and simple entries make the necessary computation regarding the loan value suitability. Contrarily, a bike EMI calculator comes with an extensive scope of assessment that expands its scope of service. An aspiring borrower must be aware of all these possibilities to best utilise the calculator at hand. Here’s what to do to make the most of your bike loan EMI calculator.
- Make necessary entries to the loan calculator, namely the loan amount you want to borrow, the applicable interest rate, and a suitable tenure for repayment. Based on these entries, check the EMIs payable, the total loan liability, and the total interest payable.
- To bring your EMIs within your financial capacity or to increase it to match your repayment threshold, you need to understand that the loan EMIs and interest payable respond differently to the changes made in tenure and amount selected.
- If you increase or decrease the loan amount, it automatically increases the loan EMI and interest payable proportionately. However, a change in the tenure selected, inversely impacts the EMIs payable and interest payable. So, to strike the balance between these two, you need to choose a tenure that keeps both long and short-term affordability of the loan in place.
- You can also use the amortisation calculator to make suitable prepayment decisions.
The financial tools bike EMI calculator and eligibility calculator are designed based on set formulae, which makes their computations accurate. These calculating tools are also quick and save valuable time. You can access either of the two calculators online for free at your lender’s official website to assess your borrowing decisions and proceed accordingly.