People are increasingly opting for independent means of commuting after the pandemic. Two-wheelers are the most sought-after and sensible mode of commuting as it is fuel efficient and has low maintenance costs. You have multiple options when buying a two-wheeler, including the latest adventure bikes and electric scooters.
In case you lack funds to finance the bike or scooter you want to buy, choose the option of a two wheeler loans. Bike finance interest rates are reasonable and can help you purchase the bike of your choice, even if it is out of your budget.
Tips to Choose the Best Bike Loan Interest Rates
A bike finance interest rate decides the total cost of the loan. Therefore, try to avail a Bike Loan at lower interest rates. The interest rate on a 2-wheeler loan is different for every borrower. Several factors decide the interest rate of a Bike Loan.
Here are the factors that affect the Bike Loan interest rate and tips on reducing the applicable interest rates.
- Type of two-wheeler: Bikes and scooters of reputed brands attract lower interest rates than others. Similarly, high-end models of bikes attract lower interest rates than lower categories of bike models. Consider the interest rates on a bike before applying for the loan to keep the interest charges low.
- Income of the borrower: A lender checks the income level of a loan seeker before deciding their Bike Loan interest rate. Because an individual with a stable and reasonable monthly income gets a lower interest rate than a low-salary applicant. A stable income reduces the risk of loan default and helps you grab the lowest interest rate on the Bike Loan. This is why you should disclose all your income sources to increase your chances of getting a loan at a lower interest rate.
- Age of the borrower: The age of a borrower influences the interest rate at which they can get a two-wheeler loan. A younger loan applicant can apply for a loan of a longer duration. This is another way to reduce the interest rate on the Bike Loan.
- Place of residence of the borrower: Loan applicants living in metropolitan cities usually have to pay a higher interest rate on their Bike Loan than the applicants living in semi-urban or rural areas. It is because of the difference in the cost of living and income in various cities.
- Credit score: Before offering a loan to a customer, the lender conducts a detailed background check on the person’s financial standing. A credit score tells them your financial status. It shows how regular and disciplined you’ve been with these past loan repayments. Lenders consider an individual with a strong credit score and a clean credit history. Such borrowers have a lower probability of defaulting on the Bike Loans. Lenders provide Bike Loans at lower interest rates to such individuals.
- Down payment on the bike: A down payment is an upfront amount you pay while purchasing a bike. And you can cover the rest of the amount with the Bike Loan. A reasonable down payment can lower the loan and, ultimately, the interest rate. A higher loan amount leads to higher interest rates. Therefore, make a reasonable down payment on the bike purchase and take a loan of a lower amount.
- Negotiate on the interest rate: An individual with a stable income source, high credit score, and complete documentation can negotiate with the lender on their interest rate. It can help them get the best Bike Loan interest rate.
A Bike Loan interest rate is the most important part of the Bike Loan. One must make every attempt possible to get a Bike Loan at a lower interest rate. Along with the interest rate, one may keep in mind the other charges, such as processing fees and foreclosure charges levied by the lender. By taking care of all these Bike Loan charges, you can finance your 2-wheeler without any hassle.