Every sector of the Indian economy is scrambling to remain afloat in these turbulent times. The Indian two-wheeler industry is no different. This is the reason why the bike brands in India have increased the sticker prices of their bike ranges. Thus making it hard to buy a bike with cash these days!
What is the solution?
Bikers now prefer to buy their dream bikes with the help of a bike loan. This is the reason why reputed market researchers are witnessing growth in the bike loan sector in India. As per experts, the sector is expected to surpass $12.3 billion by the end of 2025! In this context, it is best to remember that one must prioritise using a bike EMI calculator before applying for a bike loan.
The next priority should be to choose a lender that offers bike loans at affordable Two wheeler loan interest rates. However, one must remember that the interest rate of a bike loan will depend on a myriad of important factors.
Some of those factors are mentioned in the sections below –
The kind of bike one is planning to buy
The interest rate of a bike loan will fluctuate with the type of motorcycle one is planning to buy. For example, one would need to pay high-interest rates for a motorcycle with more than 500 CCs. Whereas the bike loan interest rate for a two-wheeler with a 100 CC engine will be nominal.
The salary or income of the loan applicant
The next factor that affects the interest rate of a bike loan is the average salary of the loan applicant. If the loan applicant is a businessperson then the motorcycle loan interest rate will depend on their average income.
People who earn more will be offered low-interest rates. The reason is that they are categorized as low-risk clients by the lender, hence, the discrimination.
The age of the loan applicant
Young bike loan applicants who do not have any underlying medical conditions will be offered low-interest rates. On the other hand, loan applicants above the age of 50 will have to bear high bike loan interest rates.
The tier of the city where the loan applicant resides in
People, who live in top-tier cities like Mumbai, would need to bear high-interest rates for their bike loans. The reason is simple – top-tier cities have higher standards of living compared to tier-2 and tier-3 cities. Hence, as per lenders, people living in top-tier cities can bear more interest rates as they have more spendable money. It is kind of illogical but that is the way things work!
The credit score of the loan applicant
People with high credit scores such as 750+ can enjoy low-interest rates when they apply for a bike loan. On the other hand, people who have low credit scores will be charged high bike loan interest rates. Furthermore, loan applicants with low credit scores also are at risk of getting their loan applications cancelled. The reason is simple – in the eyes of lenders, loan applicants with bad credit scores are high-risk cases. Hence, to keep their business interests intact, lenders refrain from handing money to loan applicants with a bad credit scores.
The down payment the loan applicant is willing to pay for the bike
Bike loan applicants who make lump sum down payments while applying for a bike loan will enjoy low-interest rates.
If one covers (+-) 50 % of the bike’s price as a down payment then they can enjoy low-interest rates. This is the trick that everyone should follow to make sure the bike loan remains an affordable financial decision.
If one has made up their mind to apply for a bike loan then they should prioritise the above-mentioned factors. For more details or expert advice, one must consult with the spokesperson of their preferred lender at their earliest convenience.