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Select your Bike Brand, Model & Variant . Enter the Down Payment & Interest Rate , You will get Loan Value , EMI(Rs./month), Total Loan Payable(Loan + Interest). These values are indicative and will vary based on Financial Institution terms of loan, interest rate & charges.
Please choose brand, model and variant to calculate EMI
* Indicative fuel cost only & may vary
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Understanding of Terms Relating Two Wheeler Loan:
1.What is EMI ?
When you take loan from a bank or a financial institution, the payment instalment is called EMI (Equated Monthly Instalment). It is the amount payable every month to the bank or any other financial institution until the loan amount is fully paid off. It consists of the interest on loan as well as part of the principal (Loan amount) to be repaid. The interest component of the EMI would be larger during the initial months and gradually reduce with each payment.
Formula is -
Formula terms -
P is the Principal Loan Amount
R is Rate of Interest per month
Where, R= ROI/12/100
e.g - Rate of Interest is 14%
then, R= 14/12/100 = 0.01167
N is loan period /term / tenure / duration in number of months
If you borrow Rs 100,000 from the bank at 14 % interest for 3 years (36 months) then
EMI = 1,00,000 * 0.01167 * (1 + 0.01167)36 / ((1 + 0.01167)36 – 1) = Rs. 3418.26
2.Two Wheeler Loan Types:
Secured Two Wheeler Loans: The loan against collateral security such as valuable assets like home, land or others.
Unsecured Two Wheeler Loans: An unsecured loan is money that you borrow without having to use something of value that you own as collateral. Most unsecured loans have a fixed term and a fixed interest rate.
3.Tips for Selecting a Two Wheeler Loan Product:
Decide the Type of Loan – 1. Secured 2. Unsecured bike loans.
If you take Secured bike loan – This means to take up loan against your property. Here without looking at the credit history your loan is approved.
In case of unsecured loan – as no security is required and it attracts higher rates of interest.
Decide Down Payment Amount & EMI: Normally down payment is 15% . If you pay out more down payment, then the lender's risk is less and finance loan will be processed faster and easily. Based on your own capacity of down payment and EMI , you can reach appropriate Loan amount required.
Credit Report – Credit report shall be proper. In case report is poor , restore and improve the report.
Compare Interest Rates – Search / Browse on different websites about the offers, terms and conditions to choose the best loan deal according to your requirement.
4.Two Wheeler Hypothecation (HP):
Hypothecation is used for creating charge against the security of movable assets (two wheeler). The possession of the security (two wheeler) remains with the borrower itself. Thus, in case of default by the borrower, the lender (i.e. to whom the goods / security has been hypothecated) will have to first take possession of the security (two wheeler) and then sell the same.
Example- In case of two wheeler/vehicle remains with the borrower but the same is hypothecated to the bank / financer. In case of the borrower default, banks take possession of the two wheeler/vehicle after giving notice and then sell the same and credit the proceeds to the loan account.
To get you Two wheeler/Vehicle vacated from Hypothecation after loan payment , please follow the below procedure-
i)Safely Keep the Documents – Keep the copy of all the original papers. Keep the receipt as proof after payment of loan
ii) Process of Termination of Hypothecation: To remove/termination of hypothecation after loan payment, fill the Form 35 as directed by the bank. On a postal cover, put a Rs12 stamp and your name and contact details. You will be levied INR 100 as the processing fee for HP termination. Keep the receipt safely.
iii) RTO Requirement and Procedure – Please submit following documents to the Regional Transport Office i) Your vehicle's original RC book ii) copy of your vehicle insurance document iii) copy of valid pollution under control certificate iv) the above mentioned postal cover. After submission, you will get a receipt from RTO as a proof. RC book will be sent to you within a week by RTO office.
Disclaimer: The above article is for understanding and guidance only. EMI calculator and Running cost values are indicative and suggestive only. Kindly check rates, cost or prices , terms & conditions etc deeply with dealing agent/dealer /bank/institution/manufacturer/office etc.