Introduction
Getting a bike is an exciting and crucial purchase for many people. While it is great to have a new bike, it is essential to consider the costs involved before one is overwhelmed by the process.
Depending on the person’s financial situation, they may need to take out a loan to afford a new bike.
If a person is planning to get a bike loan, they are advised to know the factors that affect bike loan interest rates. Being aware of it will allow them to choose the ideal loan.
Usually, the bike loan interest rate ranges from 8.65% to 28.30%.
Numerous factors affect bike loan interest rates, and understanding these factors can help obtain a lower interest rate.
Factors that affect bike loan interest rates
A few factors that affect the bike loan interest rates are:
-
Credit Score
A lender uses the credit score to determine if the borrower is creditworthy and what interest rate they will charge them.
A higher credit score indicates to the lender that the borrower has a history of handling money well and will more likely pay them back on time, thus lowering the interest rate.
A lower credit score indicates that they may be more of a risk (less likely to pay back the money), thus higher the interest rate.
-
Income
One of the most important factors that lenders evaluate when determining the bike loan interest rate is the individual’s income.
As a result, if the borrower’s income is low, they may need to seek a loan with a higher interest rate. Higher-income borrowers, on the other hand, frequently receive a lower interest rate.
A borrower must meet certain income conditions to acquire a bike loan from Muthoot Capital. Click here to learn more.
-
Age
The interest rates for bike loans are also affected by the borrower’s age.
Because the repayment period for these loans is longer, applicants of a younger age will have a lower interest rate and vice versa.
To apply for a Muthoot Capital bike loan, borrowers will have to meet some eligibility criteria. Click here for more information.
-
Bike Model
The interest rate on a bike loan is determined by the type and model of bike borrowers want to buy.
The interest rate will be positively correlated with the model and price of the bike, i.e., the higher the model and price, the higher the loan amount and the interest rate.
-
Loan Tenure
The interest rate on a bike loan is also determined by the length of the loan.
Lenders will charge a higher interest rate if the loan term is shorter, and vice versa.
Conclusion
The most significant advantage of applying for a two-wheeler loan online is the convenience it provides.
However, comparing interest rates and fees from other lenders is the first step to ensuring one is getting a significant deal for the loan.
As a result, it is a good idea to compare loans from many lenders to choose the one that best meets the borrower’s demands and has an affordable interest rate.
Muthoot Capital makes it simple and easy to secure a two-wheeler loan, with affordable interest rates starting at 0.99%, minimal documentation, and quick customer support.
