With the growing number of on-road vehicles and rising fuel costs in the country, exploring viable options has become essential for most commuters. Moreover, public transport can also cause delays, especially when reaching on time is a priority. For such situations, electric two-wheelers emerge as an ideal solution.
They are highly effective for daily and quick commutes in bustling cities. However, along with their extensive benefits, they come with a slightly higher price tag. Worry not because two wheeler loan can help you buy your electric scooter easily. Let’s understand in-depth details about them and how you can secure the best interest rates on them.
Understanding Two Wheeler Loans
Loans for two-wheelers are financial products specifically designed to help you purchase bikes and scooters. They function much like other types of loans. Here, the lender provides you with the necessary funds to buy the vehicle, and you repay it along with interest over a predetermined period.
These loans can be obtained from reliable financial institutions, including non-banking financial companies (NBFCs). Let’s look at how borrowing two wheeler loans from an NBFC turns out to be beneficial.
Benefits of Loans from NBFC
There are several lending institutions in the market from where you can borrow loans. However, NBFCs happen to have certain unique benefits. Here are a few that are worth noting:
1. Flexible Eligibility Criteria
NBFCs often have more lenient eligibility criteria compared to traditional banks. As a result, it makes it easier for individuals with varying financial backgrounds to qualify for a loan.
2. Quick Disbursement
When borrowing a two wheeler loan from an NBFC, you can benefit from their streamlined processes and quicker disbursement of funds. This, in turn, ensures that you get access to the loan amount promptly when you need it the most.
3. Accessibility
Non-banking financial institutions have a wider reach, which means they cater to underserved areas where traditional banks do not have a presence. This, in turn, makes loans more accessible to a larger segment of the population.
4. Innovative Products
NBFCs are known for their innovative product offerings, including niche loan products designed to meet the unique requirements of certain demographics or industries. This also includes loans for two-wheelers, vehicles, smartphones, etc.
Understanding Two Wheeler Loan Interest Rates
Specific interest rates are subject to change and depend on individual circumstances. Therefore, understanding the factors that influence them can empower you to make financially wise decisions. Some key considerations include:
1. Credit Score
Your credit score, a reflection of your past borrowing and repayment behaviour, plays a crucial role in determining your interest rate. A higher score typically signifies financial responsibility and leads to more attractive rates.
2. Loan Amount and Tenure
The two wheeler loan amount and chosen repayment tenure are closely linked. Shorter tenures often translate to higher monthly instalments but lower overall interest paid. Conversely, longer tenures offer smaller EMIs but incur more interest in the long run.
3. Down Payment
When you make larger down payments, it reduces the loan amount and leads to a lower interest rate.
4. Lender Profile
Different lenders have varying interest rate structures and eligibility criteria. Compare offers from banks, NBFCs, and other financial institutions to find the most suitable option.
Tips to Secure the Best Two Wheeler Loan Interest Rates
Now that you have an idea about the key factors influencing two wheeler loan interest rates, let’s explore tips to help you secure the best deal:
1. Boost Your Credit Score
If your credit score isn’t satisfactory, you can start by rectifying any errors in your credit report. Timely bill payments, managing credit card debt responsibly, and taking steps to improve your credit utilisation ratio can impact your score positively.
2. Compare and Negotiate
Compare interest rates, processing fees, and other terms from various lenders. In addition, negotiation can turn out to be fruitful, especially if you have a strong credit score or stable employment.
3. Choose the Right Loan Tenure
Consider your financial situation to plan your repayment schedules accordingly when selecting a two wheeler loan tenure. While shorter tenures may seem appealing, ensure the EMIs are manageable within your budget.
4. Consider Prepayment Benefits
Some lenders offer waivers or discounts on processing fees or remaining interest for early loan closure. Understand these terms and include them in your repayment schedules.
5. Leverage Existing Relationships
If you have a savings account or existing loan with a particular lender, inquire about special two wheeler loan rates offered to existing customers.
6. Explore Government Schemes
The government occasionally introduces schemes focused on promoting electric vehicle adoption. Be informed about any such schemes that could offer subsidised interest rates or other benefits.
Secure Your Two Wheeler Loan Today!
With dedicated loans readily available in the market, the ease of financing them cannot be overstated. Owning a two-wheeler can improve your daily commute significantly. It offers convenience and cost savings. Moreover, if you opt for an electric one, it will have environmental benefits as well.
One thing to note here is the choice of your lending institution. Borrowing from NBFCs like Tata Capital can turn out to be one of the best financial decisions. They offer flexible terms, smooth repayment structure options, competitive interest rates, and many more two wheeler loan benefits.
With the right preparation and research, you can drive away with a great deal that meets your needs and fits your budget. Start exploring your options with Tata Capital and hit the roads with your new ride!
