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How To Evaluate Two Wheeler Loan Interest Rates & EMI

  • Author :
  • TATA AIG Team
  • Published on :
  • 06/09/2023

Owning a dream machine, such as a beautiful bike, has long been a fantasy for many people. Furthermore, the current pandemic scenario has nearly made it mandatory for you to have your own form of transportation. That is solely for the purpose of maintaining a social distance. If you want to buy a bike because of one of these motives or a mixture of both, a bike loan or a two-wheeler loan is the way to go.

A two-wheeler loan is basically an advance offered by a financial institution. A borrower must repay the principal amount along with the bike loan interest rate. The payback for the bike price is made in equated monthly instalments (EMIs). The loans are granted based on the two-wheeler's ex-showroom price.

But, what about the high bike interest rates together with hefty EMIs associated with a two-wheeler loan? Will a bike loan increase the loan applicant's financial burden? However, to help such people out and help them always maintain a 2-wheeler loan interest rate and bike EMI rates affordable, we have jotted this informative blog post.

Also, just like knowing how to evaluate two-wheeler loan interest rate and EMIs is important before purchasing your dream two-wheeler, it is also crucial to know about insurance policy for bikes. If you're planning to purchase a bike anytime soon, let us tell you that you are required to have a minimum of a third-party bike insurance policy in place in order to play on the roadways of India. It safeguards you against all sort of third-party-related liabilities if occured on the road.

However, we recommend that you opt for a comprehensive two-wheeler insurance policy besides third-party insurance for added coverage. A comprehensive insurance policy for bikes safeguards your two-wheeler against all sorts of damage - be it damage caused by natural calamities, theft, or man-made violent activities. So, if you have made your mind on a particular two-wheeler that you want to purchase via loan, make sure you cover it with a robust insurance policy from Tata AIG. Contact us to learn more.

Okay, so let's get back to the main theme of the blog regarding how to evaluate 2-wheeler loan interest rates and EMIs.

Tips and Tricks to Evaluate Two-Wheeler Loan Interest Rates and EMI

You can always have the lowest two-wheeler loan interest rate amd EMIs by following these tips and tricks for evaluating interest rates and EMIs outlined below:

**Always Negotiate the Rate of Interest with the **

Before applying for a two-wheeler loan, you must speak with the loan consultants at their preferred institution. The conversation should centre on negotiating the two-wheeler's loan interest rate as well as equated monthly instalments.

Take the Assistance of the EMI Calculator Tool

The two-wheeler loan EMI calculator tool is available on the official websites of every major lender. You can take the assistance of it. This particular tool is available for free. It helps in calculating the estimated interest rate and EMI for a two-wheeler loan. To receive the best loan, you can experiment with factors like EMI, loan amount, and duration.

Speak with Financial Experts

Prior to applying for a two-wheeler loan, you must speak with finance professionals such as their chosen CAs (Chartered Accountants). CAs are learned people and having their financial counsel may be really beneficial. Speaking to a Chartered Accountant might provide you with insider information about lenders who provide low-interest loans. Chartered Accountants also recommend people who don't charge penalties when it comes to loan foreclosures or high processing charges.

Right Financial Planning Can Be Beneficial

You must chalk out a detailed financial strategy. It will make sure that you always have money in place for the EMIs for the two-wheeler loan. It's the only method to avoid extra fees such as fines or late return of borrowed funds. You can also utilise your smartphone's calendar in order to remind yourself of EMI payment dates. You may also set up automatic payments for your two-wheeler loan EMIs. This protects you against repayment failures. Correct financial planning can assist you in maintaining excellent credit ratings as well as a clean credit history.

Shop around for the Most Affordable Two-Wheeler Loan

Before making up your mind on a particular lender for a two-wheeler loan, it is necessary to browse through the internet to get the best deals. It's the only method to learn about the deals that lenders are offering in conjunction with their two-wheeler loan plans. It is preferable to apply for a two-wheeler loan when it's the festive season. Well, the rationale is simple: lenders lower their interest rates in order to compete with each other.

Look at the Rates if the Bike Loan Has a Floating Interest

Well, interest rates fluctuate on a regular basis. This is true for two-wheeler loans with floating rates of interest. You can monitor your lender's interest rates and then reach out to their relationship manager. This particular method, the interest rate on a two-wheeler loan, as well as the EMIs, can be reduced over the payback time.

How to Calculate Two-Wheeler Loan Interest and EMI Rate?

When utilising a 2-wheeler loan calculator, you do not have to be a financial guru to calculate the EMI amount. You may calculate your monthly commitment to servicing the bike or scooter using a simple calculation. All you have to do is submit three factors to calculate the EMI amount, which are as follows:

  • The loan amount that your require

  • Your desired loan term

  • Your preferred interest rate

In addition to the online two-wheeler loan calculator, there's also a rule of thumb for determining the interest when it comes to two-wheeler loans. It is presented below:

EMI = [P * R * (1+R)^N/[(1+R)^N-1]

Here, P denotes the principal or loan amount, R is the rate of interest per month, and N stands for the total number of monthly payments.

Wrapping Up

Well, another simple trick is to speak with a banking institution or a non-banking financial company's relationship manager. Asking expert inquiries about the two-wheeler loan will help clear up any confusion. This enables you to make well-informed choices. It is strongly recommended that you speak with a finance professional for further information.

Also, remember to insure your bike with a robust Tata AIG two-wheeler insurance plan after you complete purchasing it. You can also purchase 2-wheeler insurance online by visiting our official website from the comfort of your own couch. You can contact us anytime if you require further assistance regarding two-wheeler insurance policies. Tata AIG is always there to help you out.

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Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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