A Smart Approach to Select Your Two-Wheeler Loan Tenure


Today, the facility of loan allows you to get your preferred vehicle on easy installments that include two-wheelers. Having your own two-wheelers makes it comfortable and convenient for you to travel. And with more and more people preferring their own vehicle, loans have become even more accessible. 

Although loans today are very flexible and customizable, they are still a financial obligation that needs to be smartly planned. When it comes to a two-wheeler loan, you have to be careful about the tenure you select as it determines how long you plan to pay the EMI. In this blog, we tell you everything you need to consider when deciding the tenure of your two-wheeler loan.

The Prominence Of Correct Two Wheeler Loan Tenure

Basically, when you are considering two-wheeler loan tenure, loan repayment capacity and loan amount are the two most important factors. The time period of the loan you choose will directly impact the EMI you will be paying monthly. Additionally, it will also affect the overall interest rate that the financial institution will charge you for the loan. 

Financial providers have become very flexible with their offerings, and they provide you with different tenure options to choose from. The maximum loan period, the lower will be the EMI. But the more EMI you will be paying, the higher will be your interest rate. If you keep your loan period short, your EMI amount will increase, but you will be paying less interest. There is a bike loan EMI calculator online available that you can use to check EMI and overall interest rate based on the tenure.

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When it comes to calculating your two-wheeler loan, understanding the EMI components is the most important factor. Following are some of the important aspects of EMI – 

  • Principal Amount 

It is referred to as the actual amount of loan that you are borrowing from the lender. The interest is charged on this amount, which is distributed equally across the month within the loan period. 

  • Tenure

Tenure is the time period of the loan. This component is calculated from the date you have acquired the loan to the date when you pay the last EMI or close your loan. 

  • Interest Rate 

The rate of interest is calculated depending on your credit score, repayment capacity, and income. If you have a good credit score and high income, it implies that you are capable of repaying your loan on time. You are likely to be charged with less interest. 

Choosing Your Two-Wheeler Loan Tenure Wisely 

Taking a loan impacts your financial capabilities, so you have to be wise about deciding on different aspects of the same. It is wiser to keep your tenure period as low as possible, as this will ensure that you pay less amount as interest. However, you should also consider your existing financial obligations before deciding to pay high EMI. 

Therefore, before taking a two-wheeler loan, assess your current financial responsibilities. Consider whether or not the amount you are left with after fulfilling them all. If this leaves room to pay higher EMI without you having to lower your living expenses, then you should opt for lower interest payments. Additionally, you can also reduce the tenure by paying the principal amount whenever you can.  

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Final Thoughts 

Depending upon the bike you choose, the loan amount can exceed INR 1,00,000. The sum is enough to impact your financial freedom. Therefore, it is important to do thorough research and planning concerning the tenure of your bike loan. This will allow you to carefully assess all important aspects and make financial smarter decisions.

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