Table of Contents
- What is a two-wheeler loan by Shriram Finance limited?
- Factors affecting interest rates on two-wheeler loans
- CIBIL™ Score
- Salaried income loans
- Down payment at the time of loan approval
- Residence
- The model of a two-wheeler
- Age factor
- How to lower the interest rates on a two-wheeler loan?
- Maintain a good CIBIL™ score
- Debt to income ratio
- Negotiation
- Conclusion
What is a two-wheeler loan by Shriram Finance limited?
A two-wheeler loan is the best way to finance your dreams such as a bike. The loan carries a small interest rate. The interest is paid till the maturity of the loan in equal monthly installments. Both salaried and self-employed persons can apply for a two-wheeler loan.
Shriram Finance limited offers easy two-wheeler loans. It does not follow any bulky process for loan approvals.
Shriram Finance limited is India's largest two-wheeler financer. It also provides online two-wheeler loans. Shriram Finance is specialized in two-wheeler financing solutions and fulfills customers’ dreams. It provides up to 100% finance for a two-wheeler loan. It has many financing partners or deals with several scooters and motorcycle sellers to give their references for financing bike loans. Shriram Finance offers the best services, which helps make your dream bike and favorite bike come true.
Factors affecting interest rates on two-wheeler loans:
For most people, buying a two-wheeler is like a dream. With the help of a bike loan calculator, anyone can calculate the amount of EMI according to their CIBIL™ score. But some factors affect the two-wheeler loan interest rates. These are mentioned below:
1. CIBIL™ score:
The interest amount over the amount of the loan is determined or generally based on the CIBIL™ score of the person. The CIBIL™ score indicates the person's creditworthiness, which shows previous loans and their repayment details. If the borrower's CIBIL™ score is good, the loan is approved, and if not, the loan application is rejected.
2. Salaried income loans:
The loan is provided over collateral security. A salaried income is considered collateral security, and a loan is granted. The lender determines the repayment amount as EMIs. If the borrower debt to income ratio is higher, the lender may mitigate their risks by charging a high-interest rate.
3. Down payment at the time of loan approval:
The loan amount which the borrower needs to pay on the day of purchase is called a down payment. The down payment covers 50-70% of the total loan amount. The higher the down payment, the lesser the interest rates over the loan amount. The interest rate will be higher if the loan is financed 100% for a two-wheeler loan.
4. Residence:
The residence of a person determines the person's debt to income ratio. The place plays a significant role in deciding interest rates on your two-wheeler loan. If the borrower lives in a metropolitan Finance like Delhi and Hyderabad, the daily expenses are higher than in other cities. The lender can significantly charge higher interests on the two-wheeler loan.
5. The model of a two-wheeler:
The interest rate is also based on the model of the two-wheeler. If the customer selected the premium model of the two-wheeler, the interest rates are considerably higher. If there is a default on your previous loan amounts, the interest rate is charged higher on the currently financed two-wheeler to cover up the losses. The higher the rate of the model, the higher the interest rate according to its price.
6. Age factor:
The age also affects the interest rates the borrower will pay. If the age of a person is more than 50 and nearer to retirement, it will charge a higher rate of interest. Because as the customer gets closer to its retirement age, it decreases the ability to pay off debts.
Many factors affect the two-wheeler loan interest rates and determine it. The CIBIL™ score plays a significant role in deciding about the interest rates. The higher the loan amount, the higher the interest rate charged. The interest rate is affected by the residence of a person, model of two-wheeler, age, the amount of down payment, etc.
How to lower the interest rates on a two-wheeler loan?
The loan amount is highly affected by the rate of interest charged over it. Many factors affect the interest rates to be charged higher. To lower the interest rates there are some suggestions mentioned below:
1. Maintain a good CIBIL™ score:
A good CIBIL™ score can help the customer get a loan at cheaper rates. The CIBIL™ score plays a vital role in deciding the interest rates. The customer should work hard to improve the CIBIL™ score before applying for any two-wheeler loan.
2. Debt to income ratio:
The debt-to-income ratio also affects the interest rate. The debts over the current income are reduced by paying off old loans, repaying credit card payments, and reducing other irrelevant expenses. The smaller the ratio, the more likely the customer will receive favourable rates on the two-wheeler loan amount.
3. Negotiation:
Negotiation is another solution for getting a cheaper interest rate over the loan. Negotiating with the lender about expected money in the future will sometimes result in a lower interest rate. This needs to show proper documentation of the estimated money in the future.
Conclusion
Shriram Finance limited offers a good opportunity to finance your two-wheeler with the lowest interest rates. The company offers instant service. A customer can apply for an online two-wheeler loan sitting at home, any time by clicking on the apply option on its website. The customer would receive the call from executives, who will guide them on the loan application process. Shriram Finance aims to fulfil every individual’s dream to buy a two-wheeler. It needs minimum documentation and gives an approved loan amount on the same day. Everyone should take the benefits of buying a two-wheeler loan from Shriram Finance limited.
