It relieves the strain of having to pay the complete cost of the two-wheeler all at once. This offer could be improved by obtaining a lower interest rate on the loan. Borrowers with a solid credit history are preferred by lenders since they are deemed less hazardous. It is recommended that you obtain your credit score from a credit rating service. This score is based on your credit history. Anything above 750 is usually considered good credit and will help you secure a lower-interest-rate bike loan. However, if you have a low credit score, you can raise it by:
Paying off previous loans on time.
If you have many loans, you might think about debt consolidation.
On-time payment of credit card bills.
Managing a Diverse Credit Portfolio.
Determine the maximum bike loan amount.
People looking for answers of how to get loan on a motorcycle (ไฟแนนซ์มอไซค์มือสอง, term in Thai) should know that lenders also provide pre-approved offers to candidates with good credit score with whom they already have a business relationship. Before applying for a bike loan, you must choose the maximum amount you wish to borrow. A larger loan amount allows you to fully fund your two-wheeler purchase, but at a higher interest rate.
Choose the appropriate loan term
It is critical to find the proper balance between loan term and interest rate. It is recommended since the appropriate loan tenure can help you achieve a cheaper interest rate. However, if the loan term is short, you may be required to pay larger EMIs.
Increase your down payment
A larger down payment reduces the principle amount, allowing you to borrow a smaller loan at a cheaper interest rate. It also shows the lender that you’re a responsible borrower. However, you should only make a larger down payment if the likelihood of an emergency is low or if you have sufficient disposable cash. And you can simply show the lender that you are a responsible borrower by having an excellent credit history.
Provide a reliable source of revenue
Borrowers with a consistent source of income are preferred by lending organizations. If you do not offer a reliable source of income, lenders may charge you a higher interest rate on your bike loan. It is also critical that you furnish documentation, such as pay stubs. Providing information regarding the source of income is very important for self-employed loan applicants. So, to maximize your chances of acquiring a reduced interest rate, make sure to provide all relevant income documents and bank statements.
Improve your debt-to-income (DTI) ratio
The DTI ratio is the percentage of your monthly income that goes towards debt repayment. When deciding the interest rate on a bike loan, lenders take your DTI ratio into account. It is best to reduce your DTI by repaying your loans or combining them into a single loan. This can help you cut your monthly debt payments and improve your DTI, enhancing your chances of acquiring a bike loan with a cheaper interest rate.