Tips to Secure the Best Two Wheeler Loan Interest Rate for Affordable Financing
The increasing availability of two wheeler loans has revolutionised how individuals purchase bikes. With sufficient funding value, flexible repayment choices, extended tenure, and attractive interest rates, these loans have no wonder seen high demands in the recent times. Amidst the increasing social distancing norms, and an increasing dependency on two wheelers, these financing options have only assumed more importance than ever.
Thanks to the increasing competition among lenders, securing a competitive two wheeler loan interest rate is not much of a challenge today. Nevertheless, one can always adopt a few smart financial habits that can help him/her secure funding at affordable rates. Below given are some of the ways in which you can secure competitive rates on your bike loan.
6 Tips to Avail a Two Wheeler Loan at a Low Interest Rate
1.Apply with a high credit score
Although bike loans are secured advances and do not come with minimum credit score fulfilment as a compulsory requirement, an applicant’s high creditworthiness always gains favour with the lender concerned.
When applying with a high credit score, you represent an increased reliability towards repayment responsibility, and thus a reduced risk of default. Such a characteristic pitches a favour when it comes to two wheeler loan interest rate determination, allowing you to negotiate for the best available interest rate.
2.Make a higher down payment than required
When availing a two wheeler loan, you are required to observe a percentage of the vehicle’s market value as down payment while the lender finances the rest. Making a higher down payment, however, allows you to represent a better borrower credibility and financial stability.
Thus, when making a higher down payment, you should aim to increase the payment amount to stand a better chance at interest rate negotiation. In effect, it also reduces the total loan amount borrowed, thus keeping your interest liability in check.
3.Submit all income documents
Interest rate determination is highly subjected to an individual’s capacity to repay the loan liability in time without straining his/her finances much. Thus, it is essential to represent a high repayment capacity when seeking funding at affordable rates.
To do so, you can make sure to add all income documents as proof of your enhanced repayment capacity. Apart from your standard income modes as per your occupation, like salary or profits, you can also document other modes of income such as rental income from a let-out property, interest income, etc. A higher income shall thus help you negotiate for a better rate of interest on your bike loan, making financing affordable.
4.Leverage employer status
Individuals employed with reputed public sector undertakings, MNCs and such other enterprises can also leverage their employer’s status to secure funding at reasonable rates. Usually, being employed with such a reputed company means job as well as income stability.
Financial institutions thus tend to offer the best rates of interest to applicants employed or associated with such enterprises.
Apart from these tips that help secure the best two wheeler loan interest rates, you can also adopt various ways to reduce the overall interest burden. Some of the ways to do so is to opt for a shorter tenure, increase your EMIs payable, go for prepayment of your loan outstanding, etc.
Also know- Two Wheeler Loans Agra
