Two-wheelers are considered cost-effective amid rising fuel costs. That is why a two-wheeler is a preferred mode of transport among Indian families. When you take a loan to buy a two-wheeler, it helps you buy your favourite vehicle and improves your credit score if you pay back your loan on time. Availing a two-wheeler loan can be a good idea when you don’t want to disturb your liquidity, or there is a cash crunch to buy your favourite bike or scooter.
Here are some tips to help you avail the best rates on a two-wheeler loan.
Check Your Credit Score
Adhil Shetty, CEO, Bankbazaar.com, explains, “A clean credit history and good credit score are prerequisites of availing a two-wheeler loan at an attractive interest rate. It also ensures the financial institutions that lending to you is not fraught with risks.”
On the other hand, if your credit score is poor, the bank charges additional interest as a risk premium over and above the regular interest rate on the two-wheeler loans. With a credit score of 750 and above, you can easily avoid the risk premium and get the two-wheeler loan at the lowest offered interest rate. Always check your credit score in advance, and if it is not good enough, take corrective measures to improve it before applying for a two-wheeler loan.
Compare Interest Rates
Interest rates and charges on two-wheeler loans vary from bank to bank. So, it’s advisable to compare the various two-wheeler loan products available before applying for them. Compare the loans based on parameters like interest rates, processing fees and other charges such as penalties, pre-payment charges, pre-closure charges, late payment fees, etc.
The interest rate on two-wheeler loans in the table below will help you compare interest rates and take a call per your requirements.
Compiled By Bankbazaar.com
Data collected from respective bank’s website as on 20th June 2022. Lowest interest rate offered by banks on two-wheeler loans is shown in the table, irrespective of the loan amount and tenure. Interest mentioned in the table is indicative and for illustrative purposes only. Interest rate may vary in actual condition depending on bank’s applicable T&C.
Check The Tie-Ups
You have two options for getting a two-wheeler loan. Choose the lender yourself for the loan or check with the two-wheeler company if they have an exclusive tie-up with banks or NBFCs. Often lenders have tie-ups with the two-wheeler companies who waive off processing fees, process the loan quickly and charge a lower interest rate. You must check the loan offered by the lender with an exclusive tie-up with the two-wheeler company and then compare it with the loan offers of different financial institutions to make the right decision.
Special Offers On Two-Wheeler Loans
Most banks come up with special two-wheeler loan offers from time to time. For example, you can get a good deal during specific days or times like festivals, New Year, Independence Day, etc. You can get a two-wheeler loan at an attractive interest rate, and you may also get a chance to grab the loan at zero processing charges along with other offers.
Check For A Pre-Approved Two-Wheeler Loan Offers
If you have a good transaction record in your bank account and have a healthy financial relationship, your bank may offer you a pre-approved two-wheeler loan. Usually, in such loans, you get prior information about the loan amount, interest rate, and charges. “Pre-approved loans are processed quickly. Banks inform their customers about pre-approved loans through emails, SMS, and phone calls, or you may check the same by logging in to your online banking or an aggregator platform such as ours,” adds Shetty.
Sometimes, borrowers face problems like low credit scores or can’t fulfil the bank’s eligibility criteria. In such cases, they can approach an NBFC for a two-wheeler loan. Some NBFCs are flexible about eligibility norms when giving the two-wheeler loans, but they may charge you a higher interest rate and processing fee. It is advisable to take a two-wheeler loan as per your actual requirement and when you are sure to prepay the loan without defaulting on it. Never miss the timely repayment of your loan EMIs to continue your financial journey hassle-free.