Two-wheelers are a widely used mode of transport in India. A majority of the population love bike and scooters, which could be for different reasons
Two-wheelers are a widely used mode of transport in India. A majority of the population love bike and scooters, which could be for different reasons. However, due to a shortage of cash, sometimes people cannot get their dream bike. It is where two-wheeler loans come handy. There are several reasons why individuals opt for these loans, but most of them are confused about bike loan interest rates. You would have to pay an interest rate on loan but there several ways to limit the part that you have to pay. The interest rate is determined based on various factors mentioned below.
1. Loan Amount
Loan money is the most crucial factor which determines the interest rate. If the amount is higher, then the bike loan interest rate would also be higher and vice-versa. However, for the above condition to be valid, you should assume that all the other factors remain the same.
2. Credit Score
Like every other loan credit rating is one of the crucial factors on which sanction of the loan depends. For example, if your credit score is less, then you might end up paying more interest rate, or you may not be eligible for the two-wheeler loan.
3. Tenure of the loan
The duration of the loan, i.e. the time in which the amount of loan is to be paid, is another factor on which the interest rate depends. It is important because longer tenure means lower interest rates and vice-versa but keep in mind if the term is too long then you might end up paying more.
4. Monthly income or Annual income
Your income is a factor which helps the lender in knowing whether you can pay your monthly EMI’s or not. If your income is at an acceptable level, then you will be able to receive a better bike loan interest rate.
5. Nature of the job
The nature of your employment is also essential. In some cases, lenders provide lower interest rates on a two-wheeler loan to government employees and farmers. On the other hand, the records are thoroughly scrutinised for self-employed individuals.
6. Bank statements
Your bank account reports are also an important aspect. If you have enough cash in your account, then you can get a better rate of interest as compared to others.
7. Credit history
Your credit history should be as per the standard norms for you to get the best interest rate. If you have ever defaulted a loan before, then you might end up paying more due to a higher interest rate.
Conclusion
Having a two-wheeler of their choice is still a dream for many. If you do not have the cash handy and want to buy a bike or scooter, then a two wheeler vehicle loan would be a sensible choice. If the above-mentioned factors are considered carefully, and a little research is done before finalising a loan, then you can get the best deal out there.
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