Breaking Down TVS Bike Loan Interest Rates and EMI Calculations
Article by Drivio | 10th Nov 23
The EMI you pay on your motorcycle loan depends on several factors, including the loan amount, rate of interest, tenure, and your credit score. Take a close look at how banks calculate interest rates and eventually determine your financial liabilities while purchasing a motorcycle.
Owning a TVS motorcycle may be your dream! The style, performance, and reliability of TVS bikes have made them a highly sought-after choice for Indians. However, have you considered the financial aspects when it comes to choosing your desired bike? It’s imperative to understand the breaking down TVS bike loan interest rates, including the tenure to determine your EMI.
After all, you would like to keep your EMIs affordable, right? Understanding TVS's loan rates is important to make informed decisions and thereby save on your interest. In this article, we will take a closer look into the bike loan interest rates of TVS. This will help you understand how interest rates work and how they determine your EMIs.
EMI calculation insights for owners
While discussing EMI calculation insights, breaking down TVS bike loan interest rates will help you grasp the concept better.
EMI (Equated Monthly Instalment) is a fixed monthly payment that includes both the principal loan amount and the interest that your lender charges on your TVS motorcycle loan. With a manageable EMI, you can benefit from financial ease, paying in small instalments over the loan tenure.
EMI has several crucial roles to play during your borrowing period:
- Predictability: Converting your motorcycle loan into EMIs makes your liabilities predictable. Throughout the loan tenure, this remains constant for fixed-rate loans. This helps borrowers plan their budgets effectively.
- Loan repayment: Through EMIs, you make payments towards both the principal and the interest. This helps you clear off your liabilities in an organized way.
- Financial discipline: EMIs encourage borrowers to meet their monthly repayment obligations on time. This instils better financial discipline among them.
- Reducing outstanding balance: As you continue to pay your EMIs, the outstanding balance gradually decreases. This helps in reducing your liabilities to the lender.
Calculating TVS Bike Loan Interest Rates
Reputed banks and NBFCs offer affordable loans while financing TVS motorcycles. You can get as much as 95% of the price of the motorcycle covered through one of these loans. Some banks and NBFCs offer low-interest bike loans, starting from just 9.7%.
Now, breaking down TVS bike loan interest rates is important since this largely determines the affordability of your motorcycle. Check out why interest rates are crucial to consider when you apply for a bike loan.
- Interest expense: You would be paying more in interest over the tenure of the loan if the rate is higher. On the other hand, a lower interest loan translates to lower overall costs.
- EMI amount: Interest rates affect your monthly EMIs. With banks charging higher rates, you end up paying a higher EMI that can impact your monthly budget while managing other expenses.
- Loan tenure: Interest rates also determine your loan tenure. Since higher rates require you to pay more EMI, banks may prolong the tenure to make the loan affordable.
This explains why you should have transparent EMI calculation insights to make your motorcycle loans affordable.
Understanding TVS's loan rates: Fixed and Floating
Different banks and NBFCs offer motorcycle loans for TVS bikes at competitive rates of interest. Broadly, they offer loans at fixed and variable rates of interest.
Fixed interest rates
In this case, borrowers lock their interest at the existing rate throughout the tenure of the loan. This makes your EMIs predictable and stable, helping you create realistic budgets. Even if the market rates fluctuate, your EMIs will remain constant.
However, opting for a fixed interest rate for your TVC bike can end up in a loss if the market rates decrease after you lock in. On the other hand, these loans protect you even when market rates shoot up.
Floating interest rates
TVS has entered into partnerships with various dealers and banks that offer loans at floating interest rates. Periodically, these rates can change, which indicates that your EMI may increase or decrease in response to the fluctuations. When you expect market rates to fall, it’s wise to go for floating rate loans.
Factors Determining TVS Bike Loan Interest Rates
Here are some EMI calculation insights that will help you understand the factors determining TVC bike loan interest rates.
- Credit score: Your financial responsibility, evident from your credit score, goes a long way in determining your interest rates. With a higher credit score, preferably over 750, you can qualify for lower interest rates.
- Loan amount: The amount you borrow as a motorcycle loan can influence the rate of interest. This rate might be slightly higher with smaller loans, while premium bikes or sports motorcycles come at lower rates of interest.
- Tenure of the loan: If you settle for a motorcycle loan with a longer tenure, the rates can be higher. This is because, the lender is exposed to a greater risk in case you default during this extended period.
- Promotions and offers: Occasionally, motorcycle brands run promotions and offers with special interest rates. If you buy a bike during this offer period, you may be eligible for certain discounts.
- Down payment: If you decide to make a higher down payment, this can reduce the principal amount you take as a loan. Therefore, it leads to smaller EMIs, making your loan affordable.
- Prepayments: If you decide to make prepayments on the loan and reduce your outstanding principal, it can decrease your EMI.
Now that you have gained the necessary EMI calculation insights for TVS loans, you can evaluate your offers and settle for an affordable financing option. Reputed banks and NBFCs offer affordable motorcycle loans with favourable terms to owners. Consider the existing market conditions to decide whether you should go for a fixed or floating rate motorcycle loan.
Next, decide the lender based on their competitiveness in terms of interest rates, loan tenure, flexibility, and preclosure costs. Accordingly, you need to narrow down your options and settle for an affordable two-wheeler loan from a reputed lender.