The two-wheeler loan interest rate calculator determines real interest rates on two-wheeler loans with fixed terms and monthly payments. A highly important financial tool for use in routine calculations is an interest rate calculator. You must determine the entire amount you must repay regardless of whether you take out a personal, auto, or house loan. Calculating the precise amount you must pay is essential because Equated Monthly Instalments, or EMIs, include both components—the principal and the interest payable.
When opting for two-wheeler loans, in Mumbai, you are informed of the interest rate that is due for the duration. You need to create your financial strategies in accordance with the rate charged. The calculator is especially useful for people who take out several loans at once because they can find it challenging to keep track of each EMI payment. At the end of each month, figuring out your liabilities takes just a few minutes.
Type of Interest Rates
The three types of interest include simple (regular) interest, accrued interest, and compounding interest. The borrower is obligated to pay the agreed-upon interest when money is borrowed, typically in the form of a loan.
Simple (Regular) Interest
Simple or regular interest is the sum of the loan’s interest payments based on the amount of principal still owed.
Example: If a person borrows INR 2,000 at a 3% yearly interest rate, they will need to pay INR 60 in interest each year (INR 2,000 * 3% = $60).
Unpaid interest that has accumulated until the conclusion of the period is known as accrued interest. Interest steadily builds up during the month if a loan needs monthly payments (at the end of each month).
If the monthly interest cost is INR 30, the loan is accruing INR 1 in interest daily, which must be paid once the month’s end arrives. In this case, the loan will have INR 15 in interest charges by day 15 (but will need to be repaid after it reaches INR 30).
Simple interest is paid on a regular basis (as specified by the loan agreement), whereas accumulated interest is continually payable to the lender over time. This is the main distinction between these two types of interest.
In essence, compound interest is “interest on interest.” The interest payments are not constant; they vary with each period. While compound interest uses both the principal and the prior interest collected, simple interest is calculated only on the amount of principal still owed.
If someone borrowed INR1,000 at 2% interest and accumulated $100 in interest, the interest for that year would be INR 22. It’s because interest is paid on a total of INR 1100, which includes the principal (INR1000) plus accrued interest (INR 100). 2% of INR 1100 is INR 22.
How can an Interest Rate Calculator Help You?
The following are a few of the main advantages that a two-wheeler loan interest rate calculator offers.
- Such a platform provides you with a trustworthy tool that enables you to keep track of your outstanding debts.
- The tool also functions extremely well as an interest rate calculator. If you have borrowed money from a bank, you must pay back the full amount on time. If not, both your creditworthiness and your CIBIL score will suffer.
- You may plan which EMIs should be paid in full right now and which ones can wait till later with the help of a two-wheeler loan interest rate calculator in India.
- Finally, using an interest rate calculator will help you remain on top of your financial condition by saving you time, removing errors, and saving you money.
How to Calculate Interest Rate
You can determine the interest rate and total amount repayable in EMIs using a single formula. It is –
E = P * r * (1+r)^n / ((1+r)^n-1)
In the equation, the following are represented –
- E – EMI repayable
- P – Principal loan amount
- R/r – Rate of interest applicable
- N/n- Tenure in years
What advantages can bank loan calculators offer?
By using a two-wheeler loan interest rate calculator, you can take advantage of the following benefits.
- You can avoid the difficulties and drawbacks of using manual calculations by using our calculator. You will require some sort of technical assistance if you have several ongoing loan repayments.
- The calculator is error-proof.
- Without having to think about the specifics of the current loan, you can now make future plans.
Different lenders offer loans with varying interest rates and terms. You can compare loan offers from several lenders using the eligibility calculator to evaluate the difference brought on by changes in interest rates. When choosing two-wheeler loans, Mumbai, you should take other aspects into account in addition to the interest rate.
To choose the best offer, you can compare the interest variation with other factors. Such as some may charge a larger processing cost. With the use of a two-wheeler loan interest rate calculator, you can compare different loan tenures to help you select an appropriate Personal Loan term.