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Two wheeler loan interest rate 2022?
Posted on Thursday, August 11th, 2022 | By IndusInd Bank
Are you considering purchasing your dream bike and financing it using a two wheeler loan? While you can easily get a two-wheeler loan, the interest rate is a concern for many people. However, there are a lot of different factors that have an impact on the interest rates of the two-wheeler loan. So, in this blog, we will help you understand these factors that affect the two-wheeler loan interest rates. Read on.
Two wheeler loan interest rates
Interest rates are affected by many different economic factors. In addition, the interest rates on two-wheeler loans also fluctuate continuously and differ from bank to bank. Depending on your particular case, you can get a two-wheeler interest rate quote of anywhere between 6% and 28% per annum. However, the interest rate you will be able to get will depend on many factors. Let’s explore some of them in the next section.
Factors that will impact your two-wheeler loan’s interest rate
Some of the factors that will impact your two-wheeler loan interest rate are as follows:
Credit Score
It’s the first thing any lender will check before approving your loan application and quoting you an interest rate. Higher the credit score, the lower the loan’s interest rate. You can get a much lower interest rate quote, if you have a good credit score. However, this doesn’t imply that a person with a lower credit score can’t get a two-wheeler loan. You can still get the loan approved, but you will need to pay a higher interest rate.
Employment Type
When approving your loan, the lenders also check whether you are a salaried or self-employed individual as the criteria for both are different. Salaried individuals need to have a minimum gross salary of Rs. 10,000 per month to get a loan whereas when it comes to self-employed individuals, they need to have a stable business experience for 3 years.
Down payment
Down payment is the portion of the cost of the two-wheeler that you pay upfront. The higher the down payment you are willing to make, the lower will be your interest rate. So, if you can make a larger down payment, consider bringing down your interest costs.
How to calculate two-wheeler loan EMI?
EMI is the monthly payment to repay your loan. Calculating your two-wheeler loan EMI in different scenarios will let you plan better. So, it makes sense to learn how to calculate it yourself. Don’t worry! There are many EMI calculators out there that you can use to make the calculations for you. Here’s one for your reference. The idea here is to give you a sense of what factors decide your EMI.
So, your loan’s EMI is a function of 3 things: the principal, the tenure, and the interest rate. Once the interest rate is figured out, you can play around with the principal and tenure to get a monthly payment that best suits you. Remember that the higher the tenure, the lower the EMI, but the higher the total interest cost.
Bottom line
By now, you should have a good sense of what all factors decide your two-wheeler loan interest rate. If you wish to get an exact quote, apply for a two-wheeler loan today.
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.
