Back in the day, it was a common practice to buy a motorcycle with cash, but those days are long gone. The average ex-showroom prices of motorcycles sold in India have been hiked manifolds over the years.
Hence, to avoid adding to their financial burdens, people look up lenders who offer Two wheeler loans.
Since there are countless lenders and bike loan schemes available in India, how can a person choose the best bike loan?
That is an easy task when one follows the tips mentioned below –
It is Best to Research Lenders Thoroughly.
Countless lenders in India offer numerous bike loan schemes. Hence, one might find it challenging to choose the right one that suits their needs. The right approach is to take the time needed to research a lender and its products. Thorough research will help them understand if the lender’s terms align with the loan applicant.
Thorough research will also reveal the upfront costs of a bike loan. Upfront costs consist of –
- The processing fee
- The foreclosure charges
- The prepayment charges and
- Loan rescheduling charges.
Conducting thorough research will help applicants gauge whether the expenses mentioned above are within their budget or not.
The Loan Amount should be a Balanced One.
There are lenders in India who are ready to bear 90 – 95 percent of the bike’s costs. Then there is the provision of 0 downpayment loans. In 0 downpayment loans, the loan applicant would not need to pay a single penny as an upfront cost.
In both cases, the loan applicant might think they are on the winning end, but that is not the case. Loans where the loan amount is 90 – 95 percent of the bike’s MSRP come with high EMIs and interest rates. At the same time, the interest rate and EMIs for 0 downpayment loans are hefty as well.
So what is the solution?
According to experts, loan applicants should apply for a loan where the principal amount is 20% of the bike’s MSRP.
For instance, if the price of a bike is one lakh, the loan amount should be INR 20,000.
If a loan applicant follows the above advice, they will be on the winning end. It is as simple as that!
The Interest Rate Offered should be Affordable.
It is to be noted that the ideal bike loan should come with low-interest rates. Otherwise, the loan for the new bike would add to the financial burden of the loan applicant. Lenders rely on myriad factors to determine the interest rate for a bike loan.
Those factors are –
- The loan applicant’s income (monthly/annual)
- Applicant’s age
- The loan applicant’s earning method (salaried individual or entrepreneur) and
- The loan applicant’s credit history.
There are factors that a loan applicant cannot control, such as their age or employment method. But, one can always control their credit history. One should apply for a bike loan only when they have an excellent credit score. It is the only way to enjoy low-interest rates. One can still get a bike loan with a low credit score, but the interest rate for the loan will be very high.
Before applying for a bike loan, one must keep the information mentioned above in mind for the best results.
Comparing APR offered by one lender with others is a way of the wise.
One must compare the APR (Annual Percentage Rate) offered by the chosen lender with other lenders. This would allow the loan applicant to select a loan scheme with the lowest upfront expenses.
Always Check the EMI with an EMI Calculator Tool.
Using the bike loan EMI calculator tool available on the official website of lenders is the way of the wise. These are free-to-use tools. These tools allow loan applicants to learn about the tentative EMI they need to bear for the bike loan.
For more details, get in touch with a reputed bike loan lender today.