5 ways to get the best interest rate on a two wheeler loan
1. Study and compare the interest rates charged by different financial institutions for two wheeler loans:
The interest rate and the associated fees for the two-wheeler loan vary from bank to bank. You can make a comparison considering such parameters as interest rates, processing fees, other fees including penalties, foreclosure fees. prepayment fees etc.
2. Pay attention to your creditworthiness:
The credit score is a measure of a person’s creditworthiness, or in other words, a measure of a person’s ability to pay off debt. The CIBIL Credit Score is a three-digit number between 300 and 900, with 900 being the best score. So if you have good credit, say between 750 and 900, you can expect to get the best or cheapest interest rate available on the loan. Otherwise, if it is on the lower side, the institution will charge you a higher interest rate as a risk premium over the usual rate charged for two wheeler loans. But here you need to be proactive in the sense that you need to know your credit score first and if it’s low you should probably work on improving it and then maybe apply for the loan later.
3. Look for pre-approved two wheeler loan offers:
If your transaction record with the bank is in order and you have consistently developed a healthy relationship with your banker, the lending institutions will make special pre-approved loan offers in such a case. Typically, with this type of loan, you are familiar with the loan amount, rate, fees, etc., so the terms of the loan are much more obvious. These loans are also processed and paid out very quickly. To find out about such offers, you can either visit your bank branch or access the Net Banking facility.
4. For an even better deal, you can apply for the 2 wheel credit when special offers are available:
Banks offer special deals on two wheeler loans on occasions like Independence Day, during some festivals, etc. At that time, you can get a competitive interest rate, but banks always take your risk profile into account. In addition, you can even get a loan with no processing fee as part of these offers.
5. You can also opt for a two wheeler loan available in conjunction with the car company:
If you are a potential two-wheeler borrower, you have two options. On the one hand, you can choose the lender yourself, on the other hand, these car dealers also have connections with lenders for loans that are processed quickly and at the same time have a low interest rate. Availing a loan through such connections can also earn you a loan with no processing fees.