Bike Loan EMI calculator

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Motorcycle loan EMI Calculator

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How do you calculate the EMI using a bike loan calculator?

The three variables are needed to calculate the two-wheeler loan EMI calculator given below:

Loan Principal Amount (P)

The loan principal amount is the initial amount of money that you borrow from a lender to purchase the motorcycle. It represents the actual cost of the bike and does not include any interest or fees.

Interest Rate (R)

The interest rate on a bike loan is the cost of borrowing money from a lender. It’s expressed as a percentage of the loan principal amount and is typically charged in addition to the loan principal.

Loan Tenure (N)

Loan tenure refers to the duration of the period over which you agree to repay the loan. It’s the length of time you’ll be making equal monthly installments (EMIs) to the lender until the bike loan is fully paid off.

How to use a bike loan EMI calculator?

  1. Step 1: Using the first range slider, set the principal amount or you can manually enter the value in the box.
  2. Step 2: Utilising the second slider, adjust the two-wheeler loan interest rate to the correct value. The same can be tweaked with the slider or manually enter it in the box.
  3. Step 3: The last and third slider will assist you in determining the desired loan term. Use the slider to increase or reduce the value, or manually enter it in the box.
  4. Step 4: After that, clicking the calculate button will display the precise EMI value.

What is the formula for calculating EMI for a motorcycle loan?

There are two ways to calculate the EMI for a bike loan:

  1. Manual calculation using a formula – Calculate the EMI value by using this formula: EMI = [P x r x (1 + r)^n] / [(1 + r)^n – 1]. P represents the principal amount of the loan, R represents the interest rate, and N represents the duration of the loan in months. For example Say you take a Two Wheeler Loan of Rs 1 lakh from Axis Bank at an interest rate of 17% p.a. and your loan tenure is 30 months your EMI will be calculated as under:

    EMI = 100000* 0.014167 * (1+ 0.014167)^30 / ((1+ 0. 014167)^30)-1 = Rs 4,115

    The rate of interest rate (R) on your loan is calculated monthly i.e. (R= % Annual rate of interest/12). For instance, if R = 17% per annum, then R= 17%/12 = 0.014167

  2. Automatic calculation with a bike EMI calculator – Enter the principal amount, rate of interest, and loan term into the calculator for instant answers using this faster, easier, and more accurate technique.
bike & motorcycle loan emi calculator

Some of the factors impacting bike loan interest rates in India are

  1. Type of motorcycle: If your bike is a superbike, then the final onroad price will be very high, and so the interest rate will be low, while for scooters, interest rates will be high. For normal bikes, it will be between scooters and superbikes.
  2. Type of bank: Normally, private banks in India deal with bike loans, and in public sector banks, 99% do not have a bike loan option. NBFC banks like Muthoot, Manappuram Finance, and Bajaj Finance offer bike loans where the interest rate is high.
  3. Certain bike models: Some specific models of a company might have lower interest rates depending upon various factors like sales, etc.
  4. Income & employment status: Lenders consider your income and employment status to determine your ability to repay the loan. A stable and high income can result in a lower interest rate.
  5. CIBIL score: Lenders may also consider your history with loans and CIBIL score. A higher score means lower interest rates, while a lower CIBIL score means higher interest rates.
  6. Credit history & past loan repayment: If you have a good track record of repaying previous loans on time, the lender might offer you a more favorable interest rate.
  7. Good relation with the lender: Most of the time, if you have a good relationship with the lender, like the previous history of taking loans from the same lender, etc., the lender might offer you attractive interest rates.
  8. Loan Tenure: The duration of the bike loan can impact the interest rate. Shorter loan tenures may have higher interest rates, while longer tenures could offer lower rates.
  9. Down Payment: The size of the down payment can affect the interest rate. A larger down payment might lead to a lower interest rate as it reduces the risk for the lender.
  10. Regulatory Factors: Changes in regulations and policies by the Reserve Bank of India can impact lending rates and terms.

What are the tips to reduce the bike loan interest rate?

  1. Improve your credit score by paying bills on time, reducing debt, and managing credit responsibly.
  2. Shop around and compare interest rates from different lenders using online comparison websites.
  3. Negotiate with your current lender if you have an existing relationship to secure a lower interest rate.
  4. Increase your down payment to potentially qualify for a lower interest rate.
  5. Choose a shorter loan term to pay less in interest over the life of the loan, even if it means higher monthly payments.
  6. Maintain stable employment and a steady source of income to appear as a more attractive borrower.
  7. Consider a co-signer with a good credit history to help you qualify for a lower interest rate.
  8. Explore the possibility of refinancing your existing bike loan with a high-interest rate.
  9. Maintain a low debt-to-income ratio to increase your chances of getting a lower interest rate.
  10. Consider special schemes offered by banks and financial institutions.

Articles related to motorcycle loans and interest rates from our team

  1. Factors that Impact bike loan Interest rate in India
  2. How to finance your dream bike with a bike loan

Other related bike articles from our team

  1. Understanding bike insurance jargons & Essential Addons
  2. Tips To Reduce Your Bike Insurance Premium In India
  3. How to buy and select two wheeler insurance?