Query Approved

Hello,

The EMI appears correct for the interest rate. The error you have is because you are not compounding the interest. The interest would be compounded for calculation for each year. So if the interest for first year is around 15k, then the interest for next year would be 8.5% of 179592 + 15k and so on.

One more thing about two wheeler finance that normally the agents dont tell you upfront:


Normally these days the interest is calculated on a reducing pattern, (you pay one EMI, an amount is deducted (reduced) from your capital and the interest rate is applied again to the remaining capital amount next month and so on. The reason for this is that initially you pay more interest, so that banks dont go in loss just in case you decide to prepay your loan very early.

The loan agents dont tell you this and give you an approximate equivalent flat rate(for example 15% reducing can be 8.5% flat). Please confirm with your agent that if the loan would be on reducing interest pattern (99% it will be), and ask him for the reducing interest amount.

Note: In both cases the EMI would be the same, the difference is that in initial phases you pay more interest and less capital, however you will have to pay more in reducing interest rate pattern if you decide to prepay your loan earlier.

the HDFC agent told me that their two wheeler loan is not reducing but fixed however all other loans including car loan is reducing. I found this absurd that if I buy a car for Rs.300000 i get a reducing loan but if I buy the ninja for Rs. 300000 I get a fixed loan.

Anyone who has already got a loan for ninja?

It does not make a difference if it is reducing or fixed, eventually both EMIs come to be the same. In fact it is better for you just in case you decided to prepay in future.

Anyways, considering it is 8.5% fixed, the EMI they have quoted is correct because you get around the same figure if you calculate using compound interest.

Thanks for the advice but I still don't understand how the emi is same in both options? According to my calculations in the reducing principle option the details are

Total price of the bike (on road) 299320.00
Downpayment % 40.00
Downpayment amount 119728.00
Loan amount 179592.00
Processing fee % 1.00
Processing fee amount 1795.92
ROI (Fixed for three years) 8.50
Term in years 3.00
Term in months 36.00
yearly interest
Total interest 24502
Total loan payable 204094
EMI 5670


which means the EMI in this case is Rs. 5670. I am not thinking about prepaying the loan so I just wanted to know if there is any option of reducing loan.

I spoke to the HDFC guy yesterday and he told me that they don't offer reducing loan for bikes, it is however available on car loans. So, if I am buying a Rs.300000 car I will get a reducing loan but if I buy a Rs. 300000 bike I will not get it.

I just wanted to confirm if everyone is being offered the same type of loan for the ninja or I need to bargain from the bank more in order to get the reducing loan.

Cheers,
Asif

On reducing interest rate, you will never get a rate of 8.5%. These days the reducing rate is around 15% to 16% which is equal to around 8 to 9% flat.

To give you an example, when I bought my Pulsar few years back, I financed an amount of Rs. 30,000 for 36 months. The reducing rate that applied was 15.5%, I was not informed about it then. With 15.5% reducing rate, the total interest for 3 years came to around 7700. This is also equal to 8.5% flat. The agent told me that my interest rate was 8.5% and did not inform me that originally it was 15.5% reducing. I got to know this when I went to prepay one year later and got to know that it was reducing and I had paid more interest and less capital in the first year.

So if we assume you get a reducing interest rate of 15.5%, then for the amount of 179592 your EMI comes to 6269, which is flat 8.56%.

You can negotiate more with other banks or agents, but more or less you will get the same EMI, at max a deviation of around around 50 rupees I guess.

To see more you can use this calculator, Loan EMI interest rate calculator | Calculate Loan EMI it calculates reducing rate and in the result also gives you the equivalent flat rate. Good Luck

This was the quote given by Bajaj Probiking Hyderabad.
Prices are heavenly.

Bajaj Auto Finance
Ninja250R Scheme :
Onroad Price - 3,10,590/-

Finance Amount - 195000
Rate of Interest - 10.99% for 12,18 & 24 months
Downpayment - 118140
EMI - 18036 x 12
12620 x 18
9911 x 24

11% flat??? Thats outrageous! The EMI they have quoted is that of 20% reducing.

finance

hiii,

dude i have financed ninja n it was painfull job why that i will tell later ....if u calculate above n do reverse calculation the net outflow over the loan value + the processing fee file charge would take u above 25% in all the total money u will be paying on loan amount.and processing fee i was told was 2%.anyways if its 1% i doubt if there are not any other charges.

here the HDFC in faridabad didnt approve my two wheeler loan coz at that very moment i shifted job n it was just 3 months so they didnt approve and they kept asking for funny stuff n my car RC n dad's id proof and address proof and they kept saying sir this is a premium bike and has been put in league with hayabusa.....ha ha

so i took a pre approved personal loan for two years as i had an account with them for long (HDFC didnt ask for nething for same amount except a pan card n three cheque) .....with processing fee and 7589 EMI for two years ...so on loan of 1,50,000 i will end up paying 1,82,136 + 3000 which is still near 23% on loan value.....most important is many of the people i mean loads of them get problem when ur loan is over and hypothecation or NOC is needed ....people have crazy time getting that ....and ninja here is 2.83 lakhs..

but for 3 years i guess it was 5487 for 36 months and loan amount was 148553....and it includes processing fee.....


advantage is bike is not under any hypothecation...and its in my name !!!

first year

and moreover it has foreclosure also but the finance schmes these days are designed such a way that by the first year in two year loan and in three year during half tenure you would have paid all the interest ....

Reviving the topic again.

Any ideas on Finance Options from HDFC or some other banks?