How To Manage Funding For Two Wheeler Loan EMI?


Two-wheelers are a preferred mode of commuting considering cost-effectiveness, ease of manoeuvre in daily use, and quick navigation through traffic jams. India is one of the largest markets for two-wheelers globally. The Reserve Bank of India (RBI) observes an improvement in two-wheeler buyers’ sentiment based on its consumer confidence survey in April 2022. Also, interest in electric two-wheelers led by government subsidies is noticeable. 

Two-wheelers sales have picked up momentum in the last few years as lending institutions are more than willing to offer a two-wheeler loan against easy EMIs (Equal Monthly Instalments) to a middle and low-income population. Customers hitting that ‘two wheeler loan apply online’ option should consider the strategies listed below to make an informed decision and manage funds:

Ways to Manage Funding For Two-Wheeler Loan EMI

  1. First, Consider the Cost of the Two-wheeler 

Customers looking for a two-wheeler loan and easy funding for loan EMI should borrow a sum that they can repay without difficulty.

For this, consider the costs of various models and buy an affordable two-wheeler. Of course, it should be a scooter or bike that you like and available at an affordable cost.

The unnecessarily high loan amount may lead to delayed EMI payments or default. Leading financiers can offer a two-wheeler loan amount of as high as 30 lakhs.

  1. Fix Monthly Budget 

A two-wheeler loan is a great way to make a buy but can be a burden without a monthly budget. Estimating the amount that one can pay every month via budgeting helps figure out what loan size is suitable. 
Borrowers should plan their expenses efficiently to ensure that they have enough money to pay EMIs. 

They should list down all their monthly expenses which may include rent, food, utility bills, etc. and create a budget considering monthly income. Calculate the required amount of disposable income to repay the two wheeler loan EMI calculator and keep it aside. 

  1. Choose the Right Repayment Tenure 

Loan tenure is one of the factors that determine the EMI amount. The EMI amount changes with the change in a loan tenure and if it is a big-size loan, the change in EMI can be significant. Customers can increase the loan tenure to reduce the loan EMI, but it will increase the overall interest cost and make the borrowing expensive.

However, applying for a longer tenure is a better option than defaulting on a loan or delaying EMIs as it hurts the credit score of the borrower. The loan tenure should be decided on the basis of estimated loan EMI and monthly income.

A two-wheeler loan EMI calculator can help borrowers to give a fair idea. Estimating EMI amounts for different loan tenures is easy with this ready-to-use online calculator. Compare EMIs for loan tenures between 6-36 months and go with a tenure considering repayment capacity based on the monthly budget. 

  1. Increase the Down Payment 

Borrowers need to pay a certain amount as a down payment. Customers prefer to pay a higher down payment within their budget to reduce the principal amount. 

A high amount of down payment means a low loan amount which accordingly decreases the EMI. Thus, if the borrower can manage to pay more towards the down payment, the monthly burden will be lesser, and it will be easy to fund the EMI.

  1. Use Surplus Money for Loan Prepayment

Prepayment of a two-wheeler loan means paying off debt before the loan repayment tenure completes. The borrower can repay the loan until the agreed prepayment date. 

Borrowers are allowed to repay the loan in full or pay it partially before completing the loan tenure. It will reduce the loan principal and ultimately reduce the EMI. 

It is easy to fund small EMIs. Therefore, prepay the loan whenever there is a surplus amount in the borrower’s hand.


Thus, market dynamics like flexible loans and multiple lending institutions to choose from are fueling sales in the two-wheeler sector. Make an informed decision based on vehicle cost, monthly budget, and loan tenure for convenient two-wheeler loan repayment with manageable EMIs.

Frequently Asked Questions

Q1: What is a Two-Wheeler Loan EMI?

A1: A Two-Wheeler Loan EMI (Equated Monthly Installment) is a fixed amount paid by a borrower to a lender at a specified date each calendar month. It comprises both principal and interest components, allowing you to repay your two-wheeler loan in smaller, manageable installments.

Q2: How can I manage my Two-Wheeler Loan EMI efficiently?

A2: To manage your Two-Wheeler Loan EMI effectively, start by creating a budget to understand your financial capabilities. Ensure that the EMI amount aligns with your monthly income. Additionally, consider opting for a loan tenure that suits your financial situation, as a longer tenure may result in lower EMIs.

Q3: Can I prepay my Two-Wheeler Loan EMI?

A3: Yes, many financial institutions allow prepayment of Two-Wheeler Loan EMIs. However, it’s crucial to check with your lender about any prepayment charges or penalties. Prepaying can help you save on interest and shorten the loan tenure.

Q4: What should I do if I face difficulty in paying my Two-Wheeler Loan EMI?

A4: If you encounter financial challenges, the first step is to communicate with your lender. Many financial institutions offer restructuring options or temporary relief measures. Avoid missing payments without informing the lender, as it may adversely impact your credit score.

Q5: Is it possible to get a grace period for Two-Wheeler Loan EMI payments?

A5: Some lenders provide a grace period for EMI payments in case of unforeseen circumstances. However, it’s essential to confirm this with your lender beforehand. Remember that interest may still accrue during the grace period.

Q6: Can I transfer my Two-Wheeler Loan to another lender for better terms?

A6: Yes, loan transfer or refinancing is possible. Before making a decision, compare interest rates, tenure, and processing fees with potential lenders. Ensure that the transfer benefits outweigh any associated costs.

Q7: What documents are required for managing Two-Wheeler Loan EMI?

A7: Documents typically include proof of identity, address, income, and the vehicle’s registration details. Keep these documents updated and readily available to facilitate a smooth loan management process.

Q8: How does credit score affect Two-Wheeler Loan EMI management?

A8: A good credit score can help you secure a Two-Wheeler Loan with favorable terms. It also reflects your creditworthiness, influencing interest rates. Regular EMI payments contribute positively to your credit score, enhancing your financial credibility.

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