How to Calculate EMI for Bike Loan: Tips and Tricks
01 Mar 2023
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A two-wheeler is a compact vehicle that gives excellent mileage and allows you to navigate through city traffic easily. It cuts down your travelling time and expenses while you can find parking easily. Whether you wish to buy a geared bike or a scooter, you can do so with two-wheeler loans. Let's understand what is two wheeler loan and learn about the factors affecting Two-Wheeler Vehicle Loan interest rates. Also, find out how to use a Bike Loan EMI calculator before sending your loan application.
What is a Two-Wheeler Loan?
A Two-Wheeler Loan is a financial facility offered by banks and Non-Banking Financial Companies (NBFCs). If you wish to buy a new bike or scooter, you can take a two-wheeler loan .
The lender provides 90% to 100% of the vehicle's on-road price as the principal amount and levies interest on the amount loaned. As the borrower, you can repay the loan in pocket-friendly, Equated Monthly Instalments (EMIs) over tenures lasting up to 5 years.
How to Calculate EMI for Bike Loan?
The Baroda Two-Wheeler Loan come at a maximum limit of Rs 10 lakhs. However, to calculate the EMI and opt for the most affordable loan, follow the formula:
Baroda Repo Linked Lending Rate (BRLLR) + Strategic Premium + 4.25%
Employees or ex-employees offered rate is Baroda Repo Linked Lending Rate (BRLLR) + Strategic Premium. An additional risk premium of 0.05% is applied if you opt out of the credit insurance coverage. The affordable processing fee comes at 2% of the loan amount and the minimum fee is Rs 250+GST. The calculation is 2% of Rs. 60,000 = Rs.1200 without pre-closure charges.
Key Factors That Affect Two-Wheeler Loan Interest Rates
The following are the key factors that affect the two-wheeler loan finance you can obtain, and the interest rates offered by the lender.
- Your Monthly Income
- Your Credit Score
- Down Payment
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The Loan Tenure You Choose
Opting for the maximum loan repayment tenure of 60 months typically results in lower EMIs.
- The Type of Vehicle
Lenders typically assess whether you have the means to repay the loan by gauging your net monthly income and your income-to-debt ratio.
Your credit score shows lenders that you are creditworthy and instils confidence in your loan repayment capacity.
The down payment you can pay as mentioned earlier, lenders provide 90% to 100% of the bike's on-road price as financing. However, high financing typically results in a higher interest rate. Conversely, if you put down a decent down payment, it will reduce your EMI.
Your bike type is considered when evaluating your loan application to determine the interest rate. Because the resale value of popular bike models is frequently higher, loans for them typically have an affordable interest rate.
How to use Two-Wheeler Loan EMI Calculator?
A Two-Wheeler Loan EMI Calculator is a freely available online tool that allows you to compute the potential EMI payable against the loan amount borrowed. The calculator factors in the basic loan components such as the principal amount, interest rate, and repayment tenure and instantly calculates the EMI payable against variables of the same. Below are the steps to calculate Two-Wheeler Loan EMI payable against your bike loan.
- Visit your chosen lender's website and locate the Bike Loan page, where you will find the Bike Loan EMI Calculator.
- Enter the loan amount you need in the first tab of the calculator, ensuring you do not enter a sum more than the maximum amount offered by the lender.
- Next, you need to enter a reasonable interest rate in the second tab of the calculator. The two-wheeler loan interest rate cannot be lower than the minimum lending rate set by the lender.
- You now need to enter your preferred loan repayment tenure in the third tab of the calculator. While the minimum repayment tenure should not be less than one year, the maximum cannot exceed five years.
- Once you enter the required details, the EMI calculator for scooters and bikes automatically computes the EMI amount payable within seconds.
You can clear all the Bike Loan EMI calculator tabs and enter new variables until you arrive at an affordable EMI amount.
Apply for a Two-Wheeler Loan with Bank of Baroda
Applying for a bike loan is easier than ever with Bank of Baroda Two-Wheeler Loans. Get Bike Loans up to Rs 10 lakhs and repay them in affordable EMIs in tenures lasting up to 5 years. You can apply for the loan online and get competitive Bank of Baroda Bike Loan interest rates. Also use our freely available Bike Loan EMI calculator and begin your two wheeler loan process .
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The contents of this article/infographic/picture/video are meant solely for information purposes and do not necessarily reflect the views of Bank of Baroda. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Bank of Baroda and/ or its Affiliates and its subsidiaries make no representation as to the accuracy; completeness or reliability of any information contained herein or otherwise provided and hereby disclaim any liability with regard to the same. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Bank of Baroda or its affiliates to any licensing or registration requirements. Bank of Baroda shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.
A Complete Guide to Two Wheeler Loan
A two-wheeler is more than just a mode of transport. It is someone's dream and, often, a necessity. On busy Indian roads, two-wheelers are more practical and efficient as they come with excellent mileage. However, this doesn't make them easier for everyone to afford. In such cases, a bike/two-wheeler loan can be very useful. Here is a complete guide to a two-wheeler loan process, starting with what it is, its benefits, the documents required to apply for it, etc.
Complete Bike Loan Closing Procedure
India is predominantly a two-wheeler marketplace when it comes to vehicles, with bikes being the most popular among them. It is convenient and offers a faster commute to and fro the workplace. However, when it comes to purchasing bikes, most buyers go for two wheeler loans with a tenure of 3 to 5 years. It helps them avoid a huge outflow of cash at once. However, when the bike loan approaches closure, what is the procedure that the borrowers should follow for closing the loan? What if the borrowers decide for foreclosure? Let’s find out!
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