The demand for two-wheeler vehicles is rising exponentially day by day due to their customer-friendly and economic nature. Further, every youngster dreams of owning a bike of their choice. This has fueled the growth of two wheeler loans in the market.
No matter how safely you ride your two-wheeler, it is vulnerable to numerous damages because of different situations, like frequent accidents, thefts, potholes on roads, traffic congestion, etc. This is when a two-wheeler loan can prove to be the best bet. A two-wheeler loan is specifically targeted towards individuals who require some extra cash to buy their dream bike. Besides, this loan brings a lot of features to the table, such as low-interest rates, hassle-free documentation, repayment options, and quick approval.
When you consider opting for a bike loan in India, a lot of questions may pop in your mind. What will be the two-wheeler loan interest rate charged by the loan provider? Am I eligible for the loan? How much loan amount can I get? And many more.
Before you secure a two-wheeler loan for your bike, it is necessary to consider the interest rates you will get on your loan. Here, we have explained a few ways to help you get the best out of your bike loan.
Ways to get the best two-wheeler loan interest rates
The two-wheeler loan rate is a crucial parameter that determines your approval or rejection of your loan. Let’s have a look at five factors that may affect the bike loan interest rate.
1. Your Credit score and repayment history
A poor credit score is the last thing you would want to avail a bike loan at low-interest rates. A credit score symbolizes your financial capability to reimburse all the EMIs on time. If your score surpasses 700, lenders may provide you with a low-interest rate on your loan. An unhealthy credit score, on the contrary, is a sign of rejection of your loan. And, even if it gets approved, high interest is charged on it. Likewise, the loan provider also assesses your repayment history to check your credibility. Hence, if you have a bad credit score, make sure to check your credit reports and try to maintain a strong repayment history by paying all your pending dues and avoid any payment defaults.
2. The loan amount you wish to avail
The loan amount is one of the critical aspects of a two-wheeler loan. The amount of loan you get is usually based on the type of bike you want to buy as well as your eligibility for the credit. If the loan amount is higher, you will be charged with a higher interest rate. On the other hand, a low amount would mean a low bike loan interest rate.
3. The loan duration
The duration of your loan means the time in which the loan amount is to be repaid along with interest. Usually, a higher loan tenure would guarantee a high-interest rate, resulting in paying high-interest amounts every month. However, a shorter duration leads to low two wheeler loan interest rate. Therefore, it is necessary to select a loan tenure that suits your repayment schedule and also allows you to avail the low-interest rates on your bike loan.
4. Your monthly income
Your monthly income plays a vital role in determining your bike loan interest rates. It enables the lender in evaluating whether you are capable of repaying the entire loan amount plus the interest within the specified time. Different lending institutions have different guidelines regarding the income of the applicant. If the income of the person falls within the specified limit, he/she is eligible to receive low-interest rates on loan, whereas, an individual with a lower income is entitled to get high rates.
5. Nature of your organization
The nature of the organization in which you are employed is also an essential factor. If you are an employee of a reputable public or private company, you have the advantage of securing a low-interest loan, and vice versa. This is because a well-established organization leaves a positive impression on the lender, and he/she is assured that you have the required funds to pay the loan on time.
Grabbing the best deal on two-wheeler loans isn’t challenging if you follow the above five guidelines thoroughly. Besides, also make sure that you follow the edibility criterion provided by the concerned lender for availing effective loan rates.