Prices for two-wheelers and bikes have risen dramatically in recent years. As a result, many people resort to a two-wheeler loan to buy a motorcycle or scooter. However, over time, the amount you wind up paying in interest increases when you finance the purchase of a two-wheeler. The financial burden also increases as you have to get bike insurance. Therefore, it would be really helpful if you could save some money from those interests if possible.
You can, fortunately, use a few helpful tips to negotiate the lowest interest rate for your two-wheeler loan.
• Compare interest rates online
Interest rates and fees on two-wheeler loans differ from one bank to the next. Therefore, comparing the different two-wheeler loans on the market is wise before applying. You should compare loans using parameters such as interest rates, processing fees, and additional costs such as penalties, prepayment penalties, pre-closure penalties, late payment penalties, and so on.
• Consult NBFCs
Applying for a loan from a Non-Banking Financial Company is an option if you need excellent credit with good interest rates and the major banks aren't approving your loan requests. The loan process for NBFCs is a lot more relaxed. Thus, your chances of obtaining a loan accepted are substantially higher.
• Seek pre-approved loans
You can ask your bank about your eligibility for a pre-approved loan for a two-wheeler if you have a solid credit history and a positive relationship with them. The majority of the time, pre-approved loans have lower interest rates. If it gets approved, the bank will inform you about the loan amount, interest rate, repayment period, and other factors.
• Check for dealer connections.
Most likely, your two-wheeler dealer has agreements with numerous banks for EMI and financing choices. You can ask the dealer for the loan offers that are currently available when deciding which two-wheeler to purchase. You may find an excellent loan package with competitive interest rates among the possibilities supplied by your bike insurance dealership.
• Maintain an excellent credit score
You must have a strong credit score to be approved for a loan. Maintaining a strong credit score over time can be quite beneficial in various ways. In the beginning, securing loan approval will be more straightforward. The second and most significant benefit is that you will enjoy cheaper interest rates because the bank sees you as a trustworthy borrower. The best way to keep your credit score high is to use your credit card frequently for small purchases, make them on EMI, and promptly pay the monthly installments.
• Consider the loan's duration.
When looking for a loan to buy a two-wheeler, select a loan with a shorter term rather than one with a longer duration. A loan with a longer time may initially offer cheaper interest rates. Still, you may spend more overall because you will be paying interest for a more extended period.
We hope these tips will help you get the best interest rate for your two-wheeler loan. Remember to choose only reliable and registered insurance providers for the seamless process.
Disclaimer: The content provided is for education and informational purpose only, none of the information contained in our blog amounts to any form of opinion or advice. Please go through policy related documents carefully or consult an expert before making any insurance-related decisions.