In India, the two-wheeler is increasingly becoming the most favored mode of personal mobility. There are many reasons for it, such as the congested public transport system, poor streets in various parts of the country, and heavy traffic, making it essential for individuals to purchase a two-wheeler. Commuting by bike or any two-wheeler is more comfortable in heavy traffic.
It’s a desire of many youths in India to buy and ride a two-wheeler as soon as they become adults. With easy financing and loan facilities, availing of a Twowheeler loan is quite convenient and affordable. But before going ahead and availing of a loan, it is essential to know about the features and interest rates provided by lenders in the market. Understanding the details makes it easy for you to get the best two-wheeler loan interest rates.
Tips to Get The Best Two Wheeler Loan Interest Rate
When you apply for a bike loan, you must plan to get one at the cheapest possible rate. So, follow these tips that you can follow to get the best rate of interest:
- Maintain A Good CIBIL Score:
CIBIL score plays a key role in determining the interest rate you’re offered. If you have an excellent credit score, then you can quickly get a low-interest rate. So, before applying for a loan, make sure to have a good credit score. And, if you don’t have good credit, look at ways to increase it before you apply.
- Improve your current debt status:
It’s essential to keep a check on your debt-to-income ratio. Your debt status shows the amount of your current income going toward repaying loans and credit card bills. You can pay off existing dues to bring down this ratio. The lower the ratio, the greater your chances are of getting reasonable interest rates.
- Take a loan from your existing lender:
If you have a good relationship with the lender or an existing customer, you can quickly get better interest rates.
Factors that affect Interest of Bike Loan
Many factors affect the Twowheeler interest rate of the bike loan, such as:
- Amount of the Loan:
The loan amount is one of the most significant aspects of a bike loan. If the loan amount is higher, then the interest rate would also be higher and vice versa.
- Loan Tenure:
The loan tenure is the time in which the loan amount has to be fully repaid with interest. The longer the tenure, the lower the interest rate and vice versa. But you shouldn’t select a tenure that is too long as you might end up paying more. So, it is essential to choose the most suitable loan tenure to ensure that you get the best interest rate.
- Credit History:
Your credit history should be excellent to get the best interest rate. If you have ever defaulted on a loan, you must pay a lot of interest on the bike loan.
- Your Monthly Income:
Your income is another important factor that determines the interest rate charged upon the loan as it helps the lender understand whether you can repay the entire loan within the selected loan tenure.
- Nature of your Job:
The nature of your employment is also essential as some lenders offer a lower interest rate to government-employed individuals and farmers. Also, the records of self-employed individuals are examined precisely.
Equated monthly installments is a crucial factor that helps in determining the rate of interest. The EMIs, loan amount, interest rate, and loan tenure are essential factors that are closely tied together as each of them affects the other. Option for higher EMIs may lead to a lower interest rate, but it can also increase the total loan amount.
Follow the tips mentioned above that can help you in getting the best interest on your two-wheeler.