India is the land of the youth. This is not just a hollow statement but a fact. More than 65% of India’s population is below the age of 35. Unlike their predecessors, the youth of India take calculate financial steps. To put things into perspective, the Indian youth, even with their increased spending capabilities; choose to buy bikes over cars.
A motorcycle, unlike a car, allows the owner to save a lot of money. The savings begin from the dealership. Unlike a car, a motorcycle entails affordable price tags and low ownership costs. On top of this, travelling by car in India is excruciating. The nation is densely populated. Traffic conditions are poor due to bad road conditions and poor city/rural planning. Then there is the issue of fewer parking spaces. Car owners often park their vehicles far from their homes or workplaces.
A motorcycle on the other hand consumes less fuel, emits fewer fumes and is easy to cut through traffic. On top of this, parking a bike is easier compared to parking a car due to the former’s limited dimensions.
The incessant ex-showroom price hikes of motorcycles are a headache for buyers!
The sales of motorcycles in India have been spiking in recent years. To monetize this opportunity, OEMs have hiked the prices of their bike line-ups by several folds. This led to a situation where even entry-level bikes cost more than INR. 80,000. Even if one will be saving money in the long run, one would have to bear the high bike MSRPs. Hence, as a form of financial buffer, bike buyers apply for bike loans.
What about the high-interest rates that lenders typically charge?
Well, borrowers can follow certain steps to somewhat compel the lender to offer them low-interest rates. Some of those steps are mentioned in the sections below.
Borrowers need to look at financial products from multiple lenders
Banks and NBFCs will offer low bike loan interest rates on bike loans to borrowers in a bid to secure the client. There are countless lenders currently operating in India. Hence, competition among lenders is fierce. Borrowers can use this information to their advantage by consulting with multiple lenders. When lenders understand that a borrower has been looking at loan options from rival institutions, low-interest rates will be offered.
It is basic business dynamics.
Low-interest rates can be enjoyed by simply being a careful consumer
Borrowers should choose a motorcycle loan based on certain parameters. Those parameters are mentioned below.
- Loan processing fees
- Penalties added in case of late EMI payment
- Penalties are added in case of repayment of debt before the tenure ends etc.
By choosing a loan with low processing fees, no penalties and favourable clauses, borrowers can enjoy low-interest rates.
Borrowers with high credit scores should apply for a loan
Lenders tend to offer borrowers low-interest rates when the loan applicant’s credit (CIBIL) score is above 750. A borrower with a high credit score is considered a ‘low-risk’ case by a lender.
Lenders are in the market to make a profit. Hence, they would charge high-interest rates on borrowers with a poor CIBIL score. On top of this, borrowers with poor credit scores can also face loan application rejections. Hence, one should work to improve their CIBIL score before applying for a loan. In this way, one will be able to enjoy low-interest rates.
Borrowers with spotless credit histories should apply for a bike loan
Borrowers with stellar credit histories can enjoy low-interest rates from lenders when the former apply for a motorcycle loan.
A spotless credit history means that a person has never failed to repay their debts to their lender. Timely payments of EMIs and limited debt accounts can allow one to keep their credit history spotless.
The financial advice mentioned above is for general understanding. For in-depth details, it would be better if the reader consults a professional financial advisor.