India is one of the world’s largest makers of two-wheeled automobiles as a country. As a result, bikes are a convenient and economical mode of transportation. Consequently, it is also the most popular vehicle type among cars across the country due to these factors. Even though they are less expensive than other types of automobiles, the bulk of these vehicles is still out of reach for the average middle-class citizen in the country.
They can find a solution by examining the two-wheeler loan interest rate as the Indian two-wheeler loan sector rises.
According to a survey by TechSci Research, the estimate of the Indian two-wheeler loans market increase at a CAGR of 11% over the next five years, reaching $12.3 billion in 2025. So, if you’re thinking about getting a bike loan, now is the perfect time to do it.
Before making any hasty decision about a two-wheeler loan, let’s discuss some facts that most influence the two-wheeler interest rate.
Sort of two-wheeler
The interest rate varies depending on the sort of motorcycle you buy. Because of the difference in the value of the bike loan, expensive bikes typically have lower interest rates than economical bikes.
Your monthly income is another aspect that influences the two-wheeler interest rate calculation. People with higher incomes usually get bike loans at reduced interest rates, while those with lesser salaries charge higher.
The interest rate on a bike loan is also affected by the tier of the city where you live. Because of the difference in the standard of living and income, people who live in metropolitan cities face higher interest rates than those who live in tier-II and tier-III cities.
A credit rating is a score of your creditworthiness to a lender. Your credit record and payback history determine it. Bike loans offer lower interest rates to those with solid credit scores than people with low credit scores.
The two-wheeler interest rate is proportional to the loan amount. Securities loans typically have lower interest rates, and your loan amount is also considered at the time of EMI by the bike loan calculator.
Relationship with lender
Your relationship with the lender also affects the interest rate of the loan. If you are their regular, trustworthy client with the best payback record, you may charge the lower interest rate.
A shorter period will reduce the interest rates on two-wheeler loans. The longer the term, the higher the interest rate and the total amount you will pay.
After the two-wheeler interest rate survey, there are some other points that you need to understand at the time of selecting the loan institute.
It is the mandatory cost that the lender charges for processing your two-wheeler loan application. While some financial institutions and Non – banking finance companies do not charge a processing fee, others charge a cost ranging up to Rs. 1,000. You must account for this fee when comparing alternative bike loans to make the most cost-effective selection.
Charges for prepayment and foreclosure
Prepayment refers to when you decide to pay off a portion of your loan early, while foreclosure refers to when you choose to pay off your total debt early. Lenders charge a fee in both cases because they lose money on the interest rate when you prepay. As a result, when comparing alternative two-wheeler loans, you should evaluate and compare these fees.
Option of down payment
Many financial institutions allow you to finance your dream bike with no down payment. Check to see if the lender you’ve chosen offers this service. There are several advantages to taking up a bike loan with no down payment, including high liquidity and no need to rush to secure cash.
Bike loan application facilities
It would be best to consider multiple two-wheeler loan companies based on how simple their loan application method is. The availability of online services, paperless processes, and reliable, round-the-clock customer service are just a few reasons that make loan processing convenient.
The reputation of financial institute
It’s usually a good idea to do business with lenders who have a good track record and a good reputation in the market. To evaluate the brand value of various lenders, you can check their financial statistics, customer reviews, and other sources.
Crossing these loan process steps, you can use a simple online bike loan calculator to find your monthly financial burden. It will prepare you how much loan amount you should consider taking to fulfill your requirement.
The gist of this article is to analyze all these elements very carefully to have an outstanding loan experience. The loan can fulfill your dreams but always remember to take that much, which you can pay back in time without affecting your lifestyle.