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# How to strategize your two wheeler loan application with the right tools?

Getting a two wheeler loan can be a cumbersome process, especially if you have not strategized it carefully. Strategizing a two wheeler loan means calculating the right loan amount, interest rate and the tenure according to your requirements. You can use a two wheeler loan emi calculator to help you strategize your two wheeler loan application.
A two wheeler loan calculator is the first step in a two wheeler loan application. Before you begin the loan application process, you need to have an estimate about how much the loan is going to cost you. The cost here means the monthly payments that you need to pay to the bank which are known as equated monthly installments or EMI.

The EMI can be calculated from the loan amount, the interest on the amount and the processing fee to be paid.

An EMI calculator uses the following formula to arrive at the result –

E= P * r * (1+r)^n/((1+r)^n-1)
The variable in the formula are –
E = the monthly amount or EMI that needs to be paid
P = the loan amount that you will borrow
r = rate of interest (monthly basis)
n = the time period or duration of the loan amount (monthly basis)

In some cases, the processing fee to be paid for the loan amount is also added in the calculations.

Information provided by the calculator

The two wheeler loan calculator provided information in three parts –

a. The EMI
The equated monthly installments or the EMI is the monthly amount that you need to pay. It included a combination of the principal component and the interest component. Using this information you can come to the conclusion regarding the affordability of a loan.
b. The segregation
The segregation is a breakup of the entire loan amount which needs to be paid back to the financial institution. You will get information on the processing fee, principal amount and the interest amount.
c. Amortization tables
The amortization table can tell about how you will have paid back to the financial institution, year by year, as the loan progresses. These tables also help you comprehend how the interest part of the loan will be repaid.

Thus before you decide to go through, use the two wheeler loan EMI calculator to find out all the required information regarding the loan. It can help you decide whether a particular loan fits your requirements.