Two wheeler loans are presently available in a host of financing arrangements that make bike purchase convenient and financing accessible to all requiring funding for the purpose. Not to mention, these loans come with some of the best features and facilities that make financing bearable and repayment affordable. The fact that they are collateral-based financing options where the bike itself serves as the security only makes the loan more affordable than many other financing options, with the two wheeler loan interest rate kept at the minimal.
Several other factors like repayment flexibility, balance transfer facility, and easy EMI payment make the loan convenient to manage as well. When planning to avail the advance, it is ideal to know in detail about the loan arrangement and its pertinent aspects to make a wise borrowing decision. The applicability of interest rate along with various loan structures that follow within this financing option are a great way to start your journey on self-information regarding your bike loan.
Interest Rates on Two Wheeler Loans – A Brief Insight on the Function and Levy
Two wheeler loan interest rates, like any other interest levy, is determined based on the risk factors associated with the loan as well as with the borrower. These rates are primarily determined based on the following aspects.
- The nature of the loan, which in the case of bike loans, is secured, thus being low-risk lending avenue
- The creditworthiness of the borrower, which should ideally carry past repayment records and history and habits of availing as well as managing credit; even though the credit score is not necessary requirement, holding a score above 700 helps secure better rates
- Income and repayment capacity of the individual, whereby income should be at least the minium required as per their city of residence, and credit being serviced should not be more than 50%, thus keeping the repayment capacity decent
- Relationship with the lender can also contribute to determining the two wheeler loan interest rate
- The employment status and stability of a salaried applicant also works in favour of them negotiating with the lender regarding a suitable rate levy
While these factors combine to determine the interest rate levy, the final rate is also impacted by the type of interest levy system applicable, which the borrower can choose from. There are primarily two types of rate levy system followed, i.e., the fixed and floating rate system. You can decide between the two after weighing their pros and cons based on the current market rate trends and the future predictions.
Other than that, you must know about a secondary loan arrangement that is doing rounds for the perks of its easy financing structure and convenient loan management known as 100% bike financing.
Zero Down Payment Financing of Bike Loan
The primary reason why zero down payment bike financing has caught up quick with the borrowing class is its simplistic loan arrangement. Unlike the traditional financing structure that requires you to self-finance a certain percentage of your bike’s cost as down payment and the remaining as loan, this financing arrangement provides 100% funding of the cost.
This enables those who cannot make a down payment in lump sum eligible to avail funding for their desired bike purchase. Although this subjects the borrower to bear the cost of financing the entire price of the bike, a competitive levy of the two wheeler loan interest rate makes up for the affordability.
Now, since the financing value is high with zero down payment from the borrower, the lender is also subjected to a higher degree of risk in funding such purchase. To make up for this enhanced risk, lending institutions thus often require the borrowers to meet some eligibility requirements that are set a notch above those for traditional bike loans.
For instance, you may be required to hit a higher income threshold to avail a zero down payment two wheeler loan, which keeps your repayment capacity high too for easy accommodation of EMIs. Further, you may be asked to hold a minimum credit score of 750 to avail this loan easily and your past repayment record should be clean. Also, your current credit load should be minimal, and credit utilisation low to be able to avail the advance with ease.
Avail a zero down payment bike loan:
When planning to avail a zero down payment bike loan, make sure to check all the loan features and facilities as well. And see if you meet all the eligibility criteria and document requirements for an easy and hassle-free loan processing. If not, you may apply with a co-borrower as well to increase your eligibility for the advance. And of course, check for the applicable two wheeler loan interest rate and other charges applicable on the advance to determine the overall cost of your loan to apply accordingly. Better yet, use an EMI calculator to determine how much to borrow to keep your repayments affordable.
Applying for a two wheeler loan is simple and convenient with both online and offline modes available for application. Choosing to apply for it online, however, comes with additional perks as you do not need to go through long waiting lines, or completes several redundant steps to complete the process.
You simply need to visit the official website of your selected lending institution and go to the online application form page. Proceed to fill it up with the necessary details and recheck your entries for accuracy. Once all the requirements are filled up, you can submit your application and wait for a lender representative to contact you, who should do so shortly.
Some lending institutions have made the application process completion for two wheeler loans simpler than ever with their doorstep document collection facility, loan approval, and agreement signing process. Once you receive your sanction letter, make sure to check all loan details, including your two wheeler loan interest rates and charges, to keep yourself aware of the terms of your agreement. Also, read the fine print of the letter for any clauses and terms that you must know about before agreeing to the loan terms.