Bike loan interest rate features as one of the major components every time a lender determines the EMI that the borrower needs to repay. To this effect, the lower the rate of interest, the better it is for the borrower, and vice versa. Given its importance, you as the borrower should not only be aware of the types of interest rate but also how to lower the figure when you avail of a two wheeler loan in Bajaj Finance.
Regardless of whether you opt for a fixed or floating rate of interest, your credit score and credit history are likely to be scrutinized prior to setting a figure. Lenders tend to appreciate a high credit score and a flawless history, and if you have both, then securing a low interest becomes easy. Ideally your debt should also be low, but in case you lack in these aspects, negotiating with the lender is the way to go.
When it comes to moving around independently, nothing can beat your two wheeler, particularly one which comes at a relatively lower bike loan interest rate. Nowadays it is indeed possible to purchase a two wheeler of your choice without draining out your savings. All you need to do is avail of the two wheeler loan in Bajaj Finance to acquire a vehicle at affordable and flexible terms.
Having decided to buy a two wheeler, the next step entails conducting research as regards the brand, model and entities who can provide a loan. While you might find multiple lenders offering two wheeler loans, the onus is to identify one that provides the loan at low interest rates and easy tenure for repayment. An important fact regarding the interest rate that you must realize is that this percentage depends on a number of different factors. Hence, it is different for each individual, as ascertained by the lender.
Given the importance of a bike loan interest rate, discussed as follows are aspects that you need to be aware of –
Interest rate types and calculation
Interest rate that lenders levy on a two wheeler can be of the following types –
- Fixed, wherein the rate of interest remains the same throughout the tenure owing to being totally immune to market fluctuations;
- Floating or variable rate of interest, which is prone to rise/fall as per the market trend, and hence varies as per the repo rate;
Lenders use a specific formula to calculate the rate of interest when a customer avails of a two wheeler loan. Going ahead, they use the same interest rate to calculate the EMI which the borrower needs to pay every month in the form of installments. What you need to do is choose between the fixed/floating rate, depending on your financial situation. For example, when you avail of the two wheeler loan in Bajaj Finance, the EMI which you need to pay every month will be an outcome of the type of interest rate chosen.
How to lower interest rates
Regardless of whether you opt for fixed/variable interest rate, the objective should be settle for a percentage which is as low as possible. A direct benefit of a lower interest rate accrues in form of lower monthly instalments, and hence a lesser financial burden on you. While this task may be difficult to achieve, it is definitely not impossible, particularly if you bear in mind the following tips –
Maintain a good credit score – Because lenders rely on credit score to judge your reliability as the borrower, this aspect is important. Someone with a flawless credit history will most likely have a good credit score, and hence a worthy candidate for a lower rate of interest. The vice versa is just as true, which is why you must be careful about your financial transactions and bills.
Low debt – As far as possible, try to minimize your debt, especially if you are likely to apply for a two wheeler loan in Bajaj Finance. The lower the debt, the higher is your financial credibility, and more convinced the lender will be to bring down the interest rate.
Negotiating prowess – In the event that you may not fulfil all the eligibility criteria, or have a lower credit score, it is time to put your negotiating skills into action. One of the ways that you can negotiate entails comparing the terms with those being offered by other lenders. Alternatively you can present them with the information pertaining to a new income source that will improve your financial situation going ahead.
While remaining focussed on the bike loan interest rate has its advantages, you must also bear in mind other related factors that can also impact the repayment amount. Processing fees and other charges that lenders levy can matter in the long run.
Bajaj Finserv should feature on your list owing to offering two wheeler loan at attractive interest rates.