Get the Tata Capital App to apply for Loans & manage your account. Download Now

Blogs SUPPORT
Loans For You
Loans for Business
Investment
Insurance
Apply

Quick Links for loans

Quick Links for Insurance

Investment

Offers Quick Pay
Back

Equipment Finance

Avail Digital Equipment Loans
up to Rs. 1 Crore

  • Attractive ROIs
  • Customizable Loan tenure
Know More
Back

Equipment Leasing

Avail Leasing solutions
for all asset classes

  • Up to 100% financing
  • No additional collateral required
Know More
Back

New Commercial Vehicle Financing

  • First time user
  • Retail and strategic Clients
Know More
Back

Used Commercial Vehicle finance

  • Repurchase
  • Refinance
  • Top up
  • Balance Transfer
Know More
Menu  
 
Apply Now

Tata Capital > Blog > Loan for Vehicle > Factors that Determine Two-Wheeler Loan Interest Rate

Loan for Vehicle

Factors that Determine Two-Wheeler Loan Interest Rate

Factors that Determine Two-Wheeler Loan Interest Rate

Have you always wanted to own a two-wheeler? Wanted to feel the convenience it offers? But how do you purchase your desired bike without burning a hole through your savings? Well, applying for a two-wheeler loanis one of the most convenient options.

While applying for a loan, however, you have to consider several costs. The interest rate charged on loan is perhaps the most vital cost and depends on various factors.

Let’s look at some key factors below.

1. Credit score

Your credit score and history are vital determinants of the two-wheeler loan interest rateyou’re eligible for. Your lender will evaluate your CIBIL score, previous loans, and repayment history to ascertain your creditworthiness before approving your loan.

The higher your credit score, the lower is the interest charged. You can also negotiate for favourable interest rates in such a case.

2. Income

Before giving loan approval, lenders usually check your income level to gauge your repayment ability. If you’re a salaried employee, you’re more likely to get loan approval for a bike because of a steady source of income. But if you don’t earn a fixed amount every month, you may need to show additional income stability proof to secure approval.

In any case, your salary will directly affect the interest rate your lender will charge. You can also use a bike EMI calculator online to get an estimate of your EMI payments beforehand and choose a two-wheeler loan plan accordingly.

Additional Read: 5 Factors That will Increase Demand of Two-Wheelers in Post Pandemic Period     

3. Down payment

Down payment is the amount you’re willing to pay upfront towards purchasing your two-wheeler. Typically, the higher the down payment, the lower is the loan amount and the interest rate.

For instance, if you can afford to put 60% of the bike cost as a down payment, the loan amount you need will be less. So, the lender might agree to offer you a lower interest rate. However, if you have a spotless past record, you can still secure a competitive interest rate for financing your vehicle.

4. Bike model

The type and model of the two-wheeler you intend to purchase also affect the interest rates you’re charged. 

When you take a loan for a vehicle, it acts as collateral during the loan period. As a result, loans for best-selling bike models generally come with an affordable interest rate because their resale value is comparatively higher.

Additional Read: 5 Reasons Why Getting a Two-Wheeler is the Need of the Hour

5. Residence

While it may sound odd, your place of residence plays a significant role in deciding your two-wheeler loan interest rates. If you live in a metropolitan city like Delhi or Mumbai, your living expenses are likely higher than if you reside in a Tier-2 city. So, you should be earning accordingly to make up for the expenditure and afford the loan.

Over to you

Have your eyes on your favourite bike but worried your savings aren’t enough? Time to let go of your financial worries with Tata Capital!

We offer affordable loans at reasonable interest rates and flexible EMI options. Avail a loan amount of up to Rs. 3 lakhs or 100% financing of up to Rs. 1.5 lakhs with quick loan processing.

Your dream bike is now a click away! Contact us to know more.

Apply Now

Your Smooth Ride Awaits: Take a Quick and Easy Vehicle Loans!

Apply now
Popular Searches
safest car in india car down payment pdi full form tax benefit on car loan pdi checklist best cng mileage car sedan cars under 10 lakhs what is adas top rated electric cars best sedan cars in india
Disclaimer

Most Viewed Blogs

Trending Blogs

Calculator

Personal Loan EMI Calculator

Personal Loan EMI Calculator
Home Loan EMI Calculator

Home Loan EMI Calculator
Business Loan EMI Calculator

Business Loan EMI Calculator
Used Car Loan EMI Calculator

Used Car Loan EMI Calculator
Two Wheeler Loan EMI Calculator

Two Wheeler Loan EMI Calculator
Loan Against Securities Calculator

Loan Against Securities Calculator
Loan Against Property Calculator

Loan Against Property Calculator
More Tools
Our Subsidiaries
Our Other Websites

Useful Links and Resources

Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download

Policies, Codes & Other Documents

Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download

Tata Capital Solutions & Services

Uh oh, something went wrong

Please try again later.