The easiest way to acquire a bike without straining your budget or using up all of your cash is through two-wheeler loans. It is now simpler to acquire a bike without having to spend anything up front thanks to bike loan schemes with no down payment. Bike loans also include a shorter repayment period, a flexible repayment schedule, and a low EMI. However, if you want to borrow a bike, think about a few things before applying. One of them is the two-wheeler finance interest rate.
Your two-wheeler loan interest rate is the primary determinant of how affordable a two-wheeler loan is for you. Your loan installments and interest rates might be significantly reduced by even a small difference in interest rates. Understanding the factors that influence the interest rates available will help you advance. So, let’s discuss several factors that influence the interest rate on your two-wheeler finance. Knowing them will make it easier to secure two-wheeler financing at reduced interest rates.
How to Get a Bike Loan?
Purchasing a brand-new two-wheeler allows you to drive comfortably through India’s congested cities while also giving you a sense of satisfaction. If you have a tight budget and can’t pay the entire amount at once, taking out a two-wheeler loan is a great option. You can purchase your preferred bike or scooter from a financial institution with an initial down payment and the remaining amount paid in affordable Equated Monthly Installments at competitive interest rates (EMIs).
Four Simple Steps to Apply for a Two-Wheeler Loan
- Just complete the online application for a two-wheeler loan to receive a quick loan status.
- Visit the dealership showroom, where the helpful staff will assist you to complete the loan application.
- Submit the necessary documentation so that your loan can be processed.
- Once the loan has been granted, pay a deposit and take delivery of the bike of your choice.
What Factors Affect the Interest Rate on a Bike Loan?
1. The down payment
Your down payment for the bike is the portion of your monthly payment that is greater than the loan balance. Most lenders will only finance 70% of your bike loan; the remaining 30% will be your responsibility as the down payment. Although many lenders offer loans with no down payment, the two-wheeler finance interest rate will probably increase because of the increased risk. Therefore, the interest rate you receive is based on the size of your down payment.
Your income is a crucial component in determining your interest rates with your lender. To determine the risk associated with lending the desired loan amount, your net income is compared to the EMIs on your bike loan. A salaried person typically receives a lower interest rate from financial institutions since their income is reliable and steady.
3. Vehicle Type
Your two-wheeler type is taken into account when evaluating your loan application to establish the interest rate. Interest rates vary according to the price of the bike you select. Due to the higher loan amount, premium and high-performance bikes typically have lower interest rates. Additionally, popular models have higher resale values, which simplifies the process for the lender to sell it and recoup losses if you default on the loan. They are therefore subject to reduced interest rates.
4. Repayment Capacity
An applicant’s ability to repay is evaluated in relation to the fixed EMI. Before calculating the loan-to-value ratio, the borrower’s entire current debt load is taken into account.
5. Loan Terms
If the loan term is longer, the interest rate for a bike loan will also rise. This is because lenders believe that taking a long time to repay a loan may increase loan defaulting. Defaulting on a loan is viewed as a risk connected to the loan.
To account for the risk and pay any losses, loans that are thought to be dangerous are subject to higher interest rates. As a result, you should think about a shorter tenure if you want to benefit from lower interest rates. However, it is crucial to use caution when selecting your term because shorter terms result in higher EMIs, which push your affordability beyond what is manageable and up the likelihood that you will default on your loan.
6. Employer Reputation
Financial institutions can comprehend your job stability by looking at your employer’s reputation. Your chances of obtaining a reduced credit rate are increased by a reputable employer, such as an MNC or a government position.
A two-wheeler loan is a loan given to people so they can buy the two-wheeler of their dreams with appealing payment options. Although you will have to pay interest on the loan, there are various strategies to reduce how much you may have to spend on interest. The two-wheeler finance interest rate is determined by several factors, not only the amount borrowed.
With regard to “how to get a bike loan”, there has never been a better moment than right now to purchase your ideal bike or scooter with low loan rates. You can get financing of up to a certain percentage with flexible terms and simple repayment options. You may easily apply online, quickly determine your eligibility, and receive immediate funding. Never before has getting a loan approved been so simple, quick, and stress-free.