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The introduction of bike loans has made the purchase of two-wheelers quite affordable and convenient. With a two-wheeler loan of a suitable interest rate, you have the ease and flexibility to pay the bike’s price in small instalments.
However, choosing a loan with unfavourable interest rates will not maximise your loan benefits. Therefore, it becomes imperative to understand what factors affect bike loan interest rates before you apply bike loan.
With the facility of loans, you can easily finance the bike you wish to purchase. However, before applying for a bike loan, selecting the right two wheeler bike loan interest rate is crucial. Hence, knowing and understanding the factors that affect the interest rate can help you choose the right loan for you.
Let's look at some of the factors that majorly affect the bike loan interest rates:
Credit history is pivotal in determining the loan amount you are eligible for to purchase your bike. Thus, your Credit Information Bureau India Limited (CIBIL) score, repayment plan, and previous loans play an important role in deciding your bike finance interest rate.
Down payment refers to the amount of money that the person can pay right at the moment of purchase, excluding the loan amount. If you can pay a high sum amount, 50% or 70% of the total amount, you can enjoy cheaper interest rates. Hence, the higher the down payment amount, the lower the bike loan interest rate.
Income source or salary amount is undoubtedly one of the most crucial factors that play a major role in determining your 2 wheeler bike loan interest rate. For example, if you are a salaried employee, it would be easier to get your loan approved. This would, in turn, act positively in getting you affordable interest rates.
The place you reside will help you determine the debt to income ratio. Thus, it plays a significant role in determining the two wheeler bike loan interest rate.
For instance, someone who lives in a metropolitan city needs to have a higher rate of earnings than those living in a two-tier city. Thus, your standard of living plays an active role in determining your interest rates.
The age of the purchaser affects the rates to quite an extent. A person who is pretty close to their retirement might not have the means to pay an outstanding loan with a high-interest rate. In such cases, your loan might cost you extra, in turn increasing your bike loan interest rates.
Your income is one of the most important factors that play a role in determining the interest rates. For a superbike loan, you must have a minimum earning of INR 15 lakhs if you are a salaried employee. If you are self-employed, you would need at least a making of INR 5 lakhs per month.
However, this might not be the case for a regular bike. Nevertheless, having a good income can convince the lender to give some relaxation in the interest rates.
Considering the factors that affect your 2 wheeler bike loan interest rate is crucial before proceeding further with your bike loan. However, choosing the right financial service will make the process easier and less time-consuming.
Bajaj Auto Finance, one of the leading services in the financial sector, provides loans with low and suitable interest rates that directly translates into your savings. Their interest rates are affordable, with good flexibility in repayment tenure and general terms and conditions.
Therefore, apply bike loan today at Bajaj Auto Finance to get your dream bike home!Apply for Loan Calculate Your EMI