Equated Monthly Installments (EMI) refer to the monthly payments you make to the lender to repay your bike loan. These payments include the principal amount and also the interest.
That is the EMI = Principal Amount + Interest on Principal amount.
Mathematically, EMI is calculated using the following formula:{P x R x (1+R)^N / [(1+R)^N-1]}.
Here, P = Principal amount of the loan, R = Rate of interest and N = Number of monthly installments.
Use an EMI Calculator to Simplify EMI Calculations
A bike loan EMI can be calculated by visiting the respective lender’s page and making use of their EMI calculator. So what is a bike loan EMI calculator? It is an online tool that calculates the monthly instalments that you will be required to pay off the loan.
What should be known to calculate a bike loan EMI? You have to input the following to calculate the EMI.
- The principal amount (this is the loan amount borrowed)
- Interest rate (varies from lender to lender and depends on your credit score and profile)
- Tenure(term of the loan)
Why use an EMI calculator?
It is helpful in calculating the loan burden and gives a clear picture of the bike loan. You can use it to decide the right EMI that fits your monthly budget. As per the rules and regulations levied by the financial institutions, processing fee or required charges may be applicable which are not shown in the EMI calculator.
Additional Reading: Bike Loan Emi Calculator Bajaj Finance