Are you planning to buy a two-wheeler of your choice but running tight with the finances? There is nothing to worry about. Several loan options are available from lending institutions to finance your purchase. You can compare the options and select the one best suited to your requirements, and buy your dream two-wheeler.
Data from the TechSchi research report shows that the two-wheeler loan industry is on an upward trend with expectations of 11% CAGR for the next five years, with an estimated value of $12.3 billion by 2025.
Since a loan is a mid to long-term financial commitment, one should consider all relevant aspects like the rate of interest, the monthly EMI amount, the repayment tenure, etc, before availing of one. It is not advisable to take a loan without due consideration as you may end up repaying considerably more. Using a Finance two-wheeler EMI calculator is a good option since it will help give you an idea about the financial implications.
Factors That Influence Two Wheeler Interest Rate
With numerous lending institutions offering different loan rates, you must decide which one is suitable for you. The following criteria must be considered while you apply for an online bike loan:
- Type of two-wheeler you wish to buy
Loan rates differ depending on the type of two-wheelers. While the interest rates remain low for the high-end bikes, it is higher for the low-end bikes.
The bike you choose to buy will have a bearing on the interest rate.
- Your monthly salary/income
The monthly salary and income play an integral role in deciding interest rates as it validates the capacity of the loan-seeker to repay the loan.
Under normal circumstances, lending institutions allot a lower interest rate to those with a higher salary than those earning a lower salary.
- Age
Age is another important factor in determining the Two Wheeler Loan Rates.
People from the lower age group get loans at a lower interest compared to older loan applicants.
- Your credit score
The chances of an online bike loan getting approved are more when you have a higher credit score. A higher credit score will validate your reputation for repaying the loans taken on time.
Here, a lower credit score might fetch you a loan but with a higher interest rate.
- Down payment
Down payment refers to the minimal amount you must pay while purchasing the vehicle. Such payments include 20 to 50% of the bike’s market price. The more the down payment amount is, the lesser the Two Wheeler Loan Rates for the loan.
You can use a Finance two-wheeler EMI calculator to determine the EMI amounts you have to pay for the bike purchased.
- Additional factors
The above factors are important criteria for determining your Two Wheeler Loan Rates. Following are a few factors that you must consider before taking a loan alongside the interest rate.
- Processing fee issues
Lending institutions generally charge a certain amount as a processing fee for the loan approval.
You must consider the processing fee as it might impact your overall financial decisions.
- Charges on prepayment or foreclosure
You might be in a position to repay the loan within a quicker period than stipulated. Under such circumstances, the lending institutions include a prepayment fee or foreclosure fee to compensate for the loss of interest tenure.
The reason behind it is that the lending organization loses out on money when you repay faster. The prepayment charges should be considered while taking an online bike loan.
- Look for benefits like a 100% down payment option
Certain lending institutions offer a 100% down payment option that removes the financial burden off your shoulders.
Under such circumstances, you won’t have the urgency to arrange funds at short notice.
- Hassle-free Procedure
Always consider seeking loans from lending institutions with a simple loan disbursing procedure.
These include services like Online bike loan facilities, 24/7 customer assistance, and many more.
- The reputation of the lending institution
Always opt for a lending institution with a good reputation in the market.
Look for the organization’s history, i.e. its reputation, customer reviews, track record, etc., to help you make the right decision.
https://techbuzzonly.com/category/business/
In conclusion
Now that you have an idea about the important aspects concerning two-wheeler loans, consider cross-checking them. Once you have all the aspects checked, you should be ready to take a loan and buy your dream bike.
