Tips to Avail Lower Interest Rates For a Two-Wheeler Loan
Seeking a two-wheeler loan is a good idea when you do not have enough funds to spare to purchase a two-wheeler making a full down payment or when you do not wish to disturb the liquidity of funds in your bank account. Also, amidst the rising fuel prices, a two-wheeler loan is highly cost-effective and gets you a bike without breaking the bank. But are there ways by which you can reduce the interest rate? Can you get a two-wheeler loan for affordable interest rates? Here are a few tips that will help you get a better interest bike loan:
Compare different bank and lender companies
The very first thing to do to avail the best interest rates for a two-wheeler loan is to compare the interest rates offered by different banks and lender companies. Before you apply, compare the processing fees, interest rates, convenience fees, penalties, pre-closure charges, late payment fees, pre-payment charges, etc. Once you have learned about all these parameters, only then take a call to apply for a loan from a lender company that best suits your requisite frame.
Opt for a shorter loan tenure
The loan tenure also plays a vital role in determining the interest bike loan. If you take a loan for a short span of time, you pay lower interest, and if you take it for a longer period, then the interest tends to hike up. The loan seeker is given a choice to pick up the loan tenure, and accordingly, the interest rate varies. But, if you wish to opt for a two-wheeler loan at lower interest rates, you also need to restrict the loan tenure to a shorter period of time.
Pay a higher sum of down payment
The interest rate for a two-wheeler loan is decided after the evaluation of the risks associated with the loan payback. Just like the loan tenure, the down payments you make while purchasing a two-wheeler loan also play an essential role in deciding the interest rate. Increasing the down payment amount will considerably help reduce the loan interest rate. Since the balance principal amount reduces, the rate of interest also reduces greatly when you set aside a considerable sum for making the down payments. If you have some excess money lying unused, you can consider using the extra amount to add to the down payment that you had decided at first.
Apply during the festive season
During festivities and the new year, many companies come up with lucrative loan offers. Keep a check on such offers that prevails during the festive time. Seasonal and festive offers usually bring lower interest rates for two-wheeler loans; you need to be vigilant enough to keep track of all such offers and use them at the right point in time to gain the maximum benefits.
Check for tie-ups and collaborations
This is an aspect that is usually overlooked by two-wheeler loan seekers. When you opt for a two-wheeler loan, you get two options-either to choose a lender company on your own or pick up a lender company that the two-wheeler company suggests you. Many times there are collaborations and tie-ups between lender companies and two-wheeler brands that can prove to be a win-win situation for your loan case. If you are planning to purchase a particular two-wheeler brand, check if they have any tie-up with any lender company. Taking a loan from such a lender company may benefit you in terms of the interest rate charged on the two-wheeler loan.
Also, in some cases, the lending company may also waive off the processing charges that may again give you monetary benefits. You can compare the interest rates of the tie-up lending partners with other lending companies and decide. Which lending company to choose for taking a two-wheeler loan that gets you a lesser interest rate.
Keep a check on your credit score
Another important rule to follow before seeking a two-wheeler loan is to maintain a healthy and good credit score. Before you apply for a two-wheeler loan, check your credit score and see if it is well maintained. Showcasing a clean credit history because it gives you the advantage of getting a lower interest rate.
If you do not have a good credit score, it may not turn out to be a deal breaker in every case. But it can indeed hike up the interest rate for seeking a two-wheeler loan. Thus, it is suggested that you maintain a clean credit history because it is an indicator of your creditworthiness.
Pay off any existing debts if possible
If you have some extra funds in your bank that you can afford to use to pay back an existing loan account. Without burning a hole in your pocket, do it without a second thought. It is because your existing debts and loans also stand to be a determiner in deciding the interest rate. It plays a major role in helping you negotiate interest rates. Also, if you have any pending credit card payments. Make sure to clear the same before you apply for a two-wheeler loan. This is advised because a lower debt-to-income ratio hikes your affordability and gets you in a place where you can consider negotiating the interest rates with the lender company.
Check for a pre-approved offer for two wheeler loan
If you hold a good transaction record in your bank and also have a good banking relationship. There are chances that you may have a pre-approved two-wheeler loan offer in your account. Such loan offers are informed by the bank personnel to the account holder. And if the account has any such loan offer, there are high chances that you will get lower interest rates. Also, such pre-approved loans are processed at a fast pace. That can help you become the owner of a two-wheeler in no time.
By following the tips mentioned above, you can surely avail lower interest rates on two-wheeler loans. All you need to do is be vigilant and watch for any such offers that give you maximum benefits. Besides following all the tips that can help you reduce the interest amount on your two-wheeler loan.