5 Factors Affecting Two Wheeler Loan Interest Rates

Jan 25, 2024

4 min. Read


Authored By: L&T Finance

5 Factors Affecting Two Wheeler Loan Interest RatesTwo-Wheeler Loan

Two-wheelers are popular with individuals of different backgrounds in India. Many reputed financial institutions have leveraged this demand for two-wheelers and offer attractive two-wheeler loans to eligible applicants. However, many potential borrowers wonder how to get the best two-wheeler loan deal. For this, one must look at ways to reduce the two wheeler loan interest rates. That way, one can lower the overall repayment amount.

Before understanding ways to reduce the two wheeler loan interest rates, it is imperative to learn about the factors that influence the two wheeler interest rate. So, here are some essential points to consider when it comes to bike loan interest rates.

5 Factors Affecting Two Wheeler Loan Interest Rates

Financial institutions critically review the applicant's profile when rolling out a loan deal. Depending on the applicant's repayment capacity, determined by various aspects of the financial profile, the loan amount, loan tenure, and rate of interest are fixed. So, if one has maintained an excellent financial profile, it may be possible to avail of the lowest two wheeler loan interest rates. These are the factors that one must consider:

Credit Score
Credit score, along with credit history, is an important factor when determining two wheeler interest rate. A credit score above 700 or 750 can help applicants get the lowest two wheeler loan interest rates.

Applicant's age indicates the possible years of repayment. If the applicant is closer to retirement age, the interest rate can be higher as the applicant's ability to repay the loan is considered lower.

Working at a reputable company can indicate stable employment and steady income. This can help the applicant get a two wheeler loan with a low interest rate.

Monthly Income
Lenders usually offer different two wheeler loan interest rates to salaried and self-employed applicants. A minimum income criterion is also essential in the eligibility section, and applicants must fulfil this.

History with Lender
If the applicant has a prior positive relationship with the lender, they are likelier to get a two wheeler loan with low interest.
While some of these factors may not be in the applicant's control, one may consider improving credit score, maintaining a steady income, and developing a healthy relationship with a lender.

Enhancing one's financial profile is just one way of getting a two wheeler loan with low interest. Here are some other ways to get a better loan deal.

Larger Down Payment
Opting to pay more in the down payment for the two-wheeler will decrease the principal amount and, in turn, lower the total repayable amount.

Shorter Loan Tenure
Some financial companies may offer lower interest rates on shorter loan tenures as the risk to the financial company reduces. However, despite a lower interest rate, a shorter loan tenure will increase the EMI amount compared to a longer tenure.

Better Debt-to-income Ratio
The debt-to-income ratio is critical in determining the loan amount. Paying off ongoing loans and credit card debts helps improve the applicant's chances of getting a higher loan amount at lower two wheeler interest rates.
Before applying for a two-wheeler loan, applicants can get an idea of the loan amount they are eligible for. Further, it is also possible to find out the probable EMI by choosing a comfortable loan tenure and interest rate. An EMI Calculator can help with this.

Instant Two-wheeler Loans with L&T Finance

L&T Finance offers two-wheeler loans with the quickest turnaround time in the industry. Some key features of L&T Finance loans are:

• 100% funding on the ORP
• Minimal paperwork
• Get loan without income proof
• Tenure up to 48 months

Further, it is a loan with one of the lowest two wheeler loan interest rates. L&T Finance achieves this by having an entirely digital process, which is enhanced by having branches all over India. The loan application process can be initiated digitally using the PLANET App. The loan is open to salaried and self-employed individuals without needing income proof. The applicant's age needs to be between 18 and 55 years. The documents required are:

• PAN Card
• Aadhar Card
• Current Address Proof
• Bank Statement/ Salary Slips / Form 16 (optional)

Taking a bike loan is an excellent option if you wish to own a two-wheeler. L&T Finance offers 100% financing on the two-wheeler's 'on road price'. Remember, while calculating the loan, consider the other costs, like processing fee, late payment charges, etc. So what are you waiting for? Your dream bike is now in your reach.

You can now fasttrack your loan application process with PLANET by L&T Finance. One of the best and most trusted and reliable NBFC loan apps, PLANET brings its users a speedy and secure loan experience. Check it out, NOW!

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