Top Factors That Determine Two Wheeler Loan Interest Rates?

Muthoot Capital offers the best two-wheeler loans in India that are offered by some of the top banks for buying your dream two-wheeler. You can compare, choose and apply online for your two-wheeler loan in minutes through our partner banks. These bank loans are available for salaried individuals as well as self-employed individuals. A wide range of two-wheeler loans available across many popular two-wheelers up to 7 lacs.

The interest rate that you will be required to pay on a two-wheeler loan will depend on various factors, some of which are listed below:

Credit Score

A debt-to-income ratio refers to the relationship between your monthly debt obligations, such as payments on your credit card and personal loans, and your income. Lenders use this ratio to decide how much of a loan you can take; that is, how big the EMIs must be.

The highest annualized interest rate for two-wheeler loans is 18 percent, according to the Reserve Bank of India. A good CIBIL score (credit bureau of India’s consumer confidence index) will ensure that you get better terms and interest rates from banks, NBFCs and other lending agencies. It will also help you get lower EMIs on your loans. The NIBM offers a free CIBIL score once in a year for students irrespective of whether they take any loans or not. The score is available after 3 months of applying for it .

With a solid CIBIL score, you can get up to 90% of the value of your two-wheeler as a loan from any lender of your choice. The EMI and interest rate will be decided by the lender. You can even choose to pay interest only on the amount borrowed, resulting in lower EMIs. Plus, instant EMI options mean you need not wait for the loan approval to buy your two-wheeler.

Down Payment

Down Payment is the amount of payment that you are able to make toward your purchase. This is important for purchasing a new vehicle so you can lower your loan amount and pay over time with lower interest rates. The more money that you put down, the lower your monthly payments when financing, and the quicker you will be paying off your loan!

Thus, if your payment covers up to 70% of the price of your desired vehicle , the loan amount you require from your lender will be lesser and your lender will be more inclined to provide you with lower interest rates. This enables you to purchase a two wheeler at a lesser loan amount and consequently a lesser monthly repayment for your motorcycle.

Interest Rates

Interest rates in India are generally up to 12.5%. But, you should know that interest rates on two-wheeler finance differ by factors other than the above two. For instance, interest rates also depend upon your place of residence and occupation.

Muthoot Capital will calculate interest rates based on your place of residence. We have tie-ups with banks to get you the best interest rate possible (on the higher side) on your loan product.

Make & Model

Among the many factors that determine interest rates is the make and model of a vehicle too. While some two-wheeler manufacturers’ is more popular in terms of demand, others are recognized for their performance, thereby drawing up higher rates from lenders. To avoid overspending and getting stuck with an inefficient or underperforming vehicle, consider observing several variants of the make and model you have your eyes on.

Two Wheeler Loan offered by Muthoot Capital provides you the flexibility to make a quick down payment of 50% and can be repaid in easy EMIs, with attractive interest rates. To ensure that repayment of your loan doesn’t come in the way of your purchasing power, we offer a wide range of plans from industry-leading. And if you have an exceptional credit history, you can get additional benefits through our special schemes!

Visit the Muthoot Capital website today to find out more about what we have to offer you and check muthoot share price as well! Whether you want to apply for a two-wheeler loan or other types of loan, we have it right here for online application.

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