Factors Affecting Your Bike Loan EMI

Two-wheelers are one of the most preferred modes of transport in our country. As bikes are affordable and are easy to drive through heavy conditions, these are the prime choice of the masses. To help you save money and time, bikes are in high demand once and ever.

Most of the people like to get financed their two-wheelers. Before taking a bike loan, there are some critical factors to know which are sure to affect your EMIs for a bike loan. Hence, Use a bike loan EMI calculator to know the amount of your monthly repayment schedule.

List of Some Factors Affecting Your Bike Loan EMI

  • Loan Amount – The primary factor affecting the interest rate on a loan is the total amount of loan you want to apply for. You can avail of a maximum of 85% of loan on your complete purchase. Naturally, the higher the loan amount, the higher will be your EMI, with a greater interest rate on the entire loan. 

Many lending institutions charge a higher interest rate on the increased loan amount, as the risk is higher on a bigger loan. To cover up their risks, the companies usually charge a higher interest.

  • Principal Amount – This is the amount you intend to borrow. If you borrow more, the EMI will be higher and vice-versa. Ensure to take as much as a low principal amount to keep your EMIs well under control. Try to contribute as much as you can from your pocket and get the balance amount financed

You can enter the principal amount in a bike loan EMI calculator to know the amount you have to pay monthly

  • Tenure of the loan – The total period of loan required is known as loan tenure. If you opt for a longer tenure than the EMI will be on a higher side than a shorter loan period. Moreover, for a longer tenure, you will end paying more interest, thus making your borrowings costlier. Decide in advance the amount you are comfortable paying month as per your financial health while going for a bike loan
  • Credit Score – Usually termed as a CIBIL score, all financial institutions consider this key factor while providing you a loan. Your credit score enables the company to your creditworthiness. A credit score between 750 and 900 is regarded as the best. More close to 900 is your score, the lower the interest rate you will be offered. A credit score is calculated by your credit history and your repayments schedule of previous loans, credit cards, etc. The lenders go through the following:
  1. Total number of loans taken previously
  2. The total amount of loan taken by the borrower
  3. Total of timely payments made
  4. Default or missed payments, if any
  • Down payment – The initial contribution from a borrower is known as the down payment. As you can get a loan up to 85% of the total cost, remaining you have to contribute from your resources. You are free to contribute as much as you can. A more significant contribution will result in a lesser loan; thus, your EMIs will be of lower amount accordingly
  • Model of the bike – Some companies also consider the model you intend to purchase while calculating the interest rate. The rates may differ for different categories of two-wheelers. For example, mopeds, simple motorbikes, scooters are available at low interest rates when compared to high-end and luxury bikes
  • Employer reputation – The financial institutions may also watch your employer’s records to understand your income stability. A job with an MNC, Government employees, reputed business firms are considered with a steady income. A self-employed individual may require showing their past earnings to establish their income stability


Overall there are numbers of factor which may affect your EMI (Equal Monthly Instalments). When you are looking for a bike and want to avail of a loan at the best interest rates, it is advisable to consider all the above factors. 

Bike loans are easy to avail of, and you also can get a loan without even providing any kind of security or guarantee. 

So, what are you waiting for? Find out the various options available in the market, and grab the one offering you the lowest interest rate and get set to zoom on your bike.

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