For some of us, owning a bike is a need as part of our daily jobs; for others, owning a bike is a source of desire. When it comes to buying a bike, the most popular alternative is to take loan or buy it on EMI’s, and only a few of us consider purchasing a bike with self-funding. In this blog, we’ll go over the costs of a bike loan, how to save for your automobile with MF investments, and our thoughts on which option is preferable so you can make an informed decision.
When you borrow money, you are required to pay an equal monthly instalment (EMI) to settle the outstanding balance as well as any interest that has accrued. The length of time it takes you to repay the loan determines the size of your EMI; a more extended repayment period means more interest paid to the lender.
Instead of EMI’s have you thought about using paying through SIP’s? It is a periodic payment mechanism for MFs investment which can be used that allows you to grow your money over time by investing in Mutual Fund schemes. SIPs assist you in generating a return on your investment and achieving your varied financial goals. In addition, a longer investment term can assist you in accumulating a more extensive portfolio.

How Does EMI Impact Your Financial Planning?
Loans enable you to purchase items that you otherwise would not afford on your current savings. The main idea is to use your future ability to make things more inexpensive today with the help of a loan instrument.
A loan should be utilised sparingly and only when necessary. A loan acquired without adequate consideration will result in a disparity between your income and expenses. Moreover, to repay EMI’s, you may have to give up some of your financial goals.
For example, after meeting your monthly expenses, your net income is ₹ 4 lakh per year, and you save ₹ 5,000 per month for goals like your homeownership, vacation planning, and so on. A decision like taking out a bike loan without making any changes to your financial plan may put a strain on your future plans, making it more challenging to attain your goals.

What Can SIP Do To Assist You In Reaching Your Financial Goals?
SIPs are a powerful investment tool that can help you meet both short and long-term goals, you can achieve it by using Multipl. Multipl entails investing a set amount in various Mutual Fund schemes at regular intervals. As a result, your investment grows over time, assisting you in accumulating a larger corpus to meet your financial goals.
If you wish to buy a bike but don’t have enough cash, you can invest in vehicle goal on Multipl for a year through a systematic investment plan (SIP). You’ll be able to save money and earn decent returns after a year. Then, you can purchase the bike from your fund using the corpus.
Let’s see whether a SIP or an EMI is best for you. Let’s say you want to buy a bike for ₹ 1 lakh but don’t have the cash on hand to do so right away. You have two choices: take out a loan and pay 9.5 per cent interest per year, or save money through a SIP and develop a corpus in 10 months to buy it. Multipl delivers a 12 per cent annual return by investing cash in Monthly SIP’s, and you’ll need to put in an instalment of ₹ 9,641 per month for a 10-month corpus of ₹ 1 lakh.
Monthly Installment(10 Months) | Annual Return | Amount paid in 10 months | |
10-month corpus of ₹ 1 lakh in SIP | ₹9,641 | 12% | ₹96,410 |
You are saving ₹3,590 by using Multipl
Monthly Installment(10 Months) | Interest rate | Amount paid in 10 months | |
EMI on ₹ 1 Lakh loan | ₹10,440 | 9.5% | ₹1,04,400 |
As seen in the e.g. above, you can set your vehicle goal on Multipl app if you plan ahead of time or postpone your purchase and invest the money to develop the necessary corpus, and you can save a significant amount of money as compared to purchasing a product on credit. However, it is preferable to be cautious because any unanticipated debt might cause considerable financial harm. A SIP may be a better option for goal-based mutual fund investing than EMI’s because it keeps your debt low.