Bike Loan EMI Calculator: 5 Factors That Affect Your EMI

Bike Loan EMI Calculator: 5 Factors That Affect Your EMI
5 min read
02 August 2022

With an increasing number of individuals opting for personal modes of transportation, the popularity of two-wheelers is now more than ever. Two wheelers are fuel efficient and can help you get from one place to another much faster than other modes of transportation. 

If you’re someone who is looking to purchase a bike by taking out a two wheeler loan, then this is for you. Your bike loan EMI is dependent on a multitude of factors. Knowing what they are can help you make a better financial decision. So, let’s take a look at 5 of the most influential factors that affect your EMI. 

  • Rate of Interest 

The interest rate on your bike loan is by far the most important factor when it comes to determining your EMIs. The higher the rate of interest, the higher your EMIs and vice versa. That’s why it is important to make sure that you opt for a lender that offers a low interest rate. 

One way to do that would be to compare multiple bike loan offers from different lenders and choose the one that offers you the lowest interest rate. This will help keep your financial burden to a minimum by lowering your monthly EMI payments. 

  • Your Credit Score 

The credit score is a unique three-digit score assigned to you by Credit Information Companies like CIBIL. The score ranges from 300 to 900 and denotes your creditworthiness. The higher the credit score, the more creditworthy you are. 

Lenders typically tend to favour individuals with high credit scores of above 700. Individuals with such high scores are usually expected to pay their obligations on time and are considered to be low risk. 

So, the higher your credit score is, the lower the interest rate of two wheeler loans are likely to be, which will consequently lower your EMIs. Therefore, always ensure that you have a good score before applying for the loan. This way, you can get a good deal on your bike loan. 

  • Amount of Loan 

The loan amount you avail of from a lender can also influence your EMIs. The larger amount of loan, the higher the monthly EMI payments will likely be. Also, the higher the loan amount, the greater the risk for the lender. So, to compensate for that, lenders will quote higher interest rates, which will increase your EMI payments. 

That said, if you’re keen on reducing your monthly EMI payments, one way to do it would be by increasing your down payment. Doing so will reduce the amount of loan that you would have to borrow, thereby lowering your monthly EMIs. If you ever need any help planning your repayments in a better manner, you can always resort to using an online bike loan EMI calculator

  • Tenure of the Loan

The repayment tenure that you opt for is another major factor that influences the monthly EMI payments of your two wheeler loan. The longer the tenure, the lower your EMI is likely to be. The logic behind this is that by spreading your loan amount across more months, you essentially get to reduce the monthly EMI obligation. 

However, doing this also has a slight disadvantage. While opting for a longer tenure can reduce your EMI payments, it also increases the interest that you will have to pay towards the loan. This can end up increasing your overall financial burden. 

  • Nature of the Loan       

There are two different types of two wheeler loans that you can opt for - a secured loan or an unsecured loan. A secured bike loan requires you to pledge the vehicle as collateral to obtain a loan. An unsecured bike loan, on the other hand, an unsecured bike loan doesn’t require you to pledge the vehicle as collateral. 

Your monthly EMIs are dependent on the kind of loan that you opt for. For instance, secured loans carry lower rates of interest, which ultimately leads to lower EMI payments. On the contrary, unsecured loans come with higher rates of interest, leading to higher EMIs. 


With this, you must now be aware of the 5 key factors that influence your bike loan EMIs. Now, always remember to make use of a bike loan EMI calculator before you decide to apply for one. This way, you can determine your obligations beforehand and plan your finances in a much better manner.

Alex 10.6K
Joined: 4 years ago
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