Last Updated on 2022-07-27 by AlexHales
If you are planning on getting your own two- wheeler, one of the first steps is to find out how to get a two- wheeler loan in Bangalore. The critical aspect here is to get an affordable loan with terms that are favourable to you. A loan with high interest puts a burden on your finances month after month until it is paid in full. However, with some care you can find a suitable loan with an attractive interest rate. Here are some tips you can use.
Tweak the amount of loan
The higher the amount of loan you take, the higher the interest you end up paying every month. A simple way to bring this down is to see if you can pay a larger down payment and thus take a lesser loan amount. If you have been planning long for your new bike, chances are you have been saving too and can put down a bigger cash amount initially. However, if not, then see if you can postpone your purchase for a few months while you build up a little nest egg to make a big down payment to reduce the total loan amount.
Maintain a good credit score
When you apply for a two- wheeler loan in Bangalore, the critical factor that the provider looks at is your credit rating or score. Your credit report gives your credit score and gives a summarized picture of whether you are a good credit risk or not. In short, a good credit score tells the loan provider that the chances of you repaying the loan in full, on time, are very high. A bad credit score tells them that the chances of them losing their loan amount is high. To offset the risk in lending, loan providers tweak the two- wheeler finance interest rate based on your credit score.
Before you start applying for loans, download your credit report and check what it says about your credit worthiness. If you can pay off some big dues or some very long- standing ones, it can improve your score. Also check for errors such as paid bills showing up as unpaid etc. to have a credit score that reflects your credit worthiness accurately. This gets you a fair rate on your new loan.
Show all your income
This is especially relevant for those who have income from various sources, such as consultants and freelancers. Keep in mind that the lender is more confident about your repayment ability if your regular income is high. So, make sure you list out all your income when you make your application. Leaving out some and showing a smaller income that you actually get can result in a higher two- wheeler finance interest rate being offered to you.
Financial statements showing a good balance in your accounts are also a great help here. Savings stashed away in bank FD or savings accounts tell the lender that if you run short of money to pay an EMI, all you have to do is draw from savings. This assures the lender that you will not default on the payment and this makes you a good risk for them.
Adjust the tenure
There may be a situation where you cannot take up a loan that demands a high two- wheeler finance interest rate. If this is so, choose a longer tenure for the loan so that your EMIs are smaller and spread over a longer duration. However, you must remember that the longer your loan extends, the more you pay overall in terms of interest. Extending tenure may keep interest rate low but at the end of the loan period, you have paid more overall than you would have with a short tenure loan.
Equipped with this information on how to get an attractive rate for your new two- wheeler loan in Bangalore, you are now ready to make your application. Use an EMI calculator if needed to understand the exact outgo you will have to make with different interest rates on the loan. This gives you a clear idea of whether you can afford to take the loan or if you should work a little more towards lowering the interest rate.