You have been planning to purchase your dream bike for months. You have watched all the possible content, from Instagram reels to long YouTube review videos.
Even though you don’t have the bike yet, you can imagine what giving it a rev feels like. You have a good idea of how riding it would feel, so do not forget its road presence and the heads it will turn, thanks to its stunning looks.
Only one thing comes your way – financing your bike. We get it. Not finding a way to fund your bike can be frustrating. Let’s understand how to get the best Bike Loan deal and learn about Bike Loan interest rates. Read on.
Interest rates on Bike Loans can be very different based on the market, the lender’s rules, and the borrower’s credit background.
Most Bike Loans cost around 8.5 to 10.5% a year to repay. Applicants with good credit scores (over 750) are likelier to get lower interest rates when they borrow money, while those with scores less than 700 may have to bear high interest rates.
Most Bike Loans have fixed interest rates for the whole loan period, enabling monthly payments. On the other hand, reducing rates of interest, as the name suggests, reduce over time in proportion to the principal amount.
However, floating interest rates may start at a higher rate than fixed ones. Understand the difference between the two before selecting the one that best fits your needs.
Several factors influence the interest rate you might be offered:
Your credit score is one of the most critical factors affecting how much interest you pay on a loan. Pay your bills on time and only borrow what you need to maintain a high credit score. Also, check your credit report every once in a while to know where you stand. If your score is above 750, you can get better interest rates.
Each loan has its own terms and interest rates. Do not rush into taking the first offer that comes your way. Instead, look at the loan deals that banks, non-banking financial companies (NBFCs), and online lenders offer. This will allow you to compare rates and terms to find the best one for bikes on loan.
If you choose a shorter time for loan repayment, you can save money on the interest you had to pay if you continue paying the EMIs for a longer term (each EMI consists of principal and interest components). While this means the monthly EMIs will be more, you can save on the extra interest over the long term.
Knowing Bike Loan interest rates and how to get the best deal will ensure that you buy your dream bike with the best possible financing.
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