Today, many buyers are choosing to purchase two wheelers by availing a two wheeler loan. Paying off any loan faster helps lessen the burden on your finances. The sooner you pay off your two-wheeler loan the better. You can choose to prepay your loan. But you can only use the prepayment option when you have some surplus money other than your monthly income. Also, many banks and NBFCs will charge you a certain amount of pre-payment fee. There are a few other options which you can consider to pay off your two wheeler loan faster.
1. Use Your Surplus Income
You might have other investments or savings such as bank deposits, dividends, a bonus payment in the workplace etc. These are some avenues from where you can get a lump sum amount. You can use these to repay your loan and not fall for the urge to spend it elsewhere.
2. Fix A Bi-Weekly Repayment Model with The Lender
When you are in talks with your lender regarding the loan repayment schedule, you can come to a bi-weekly EMI payment agreement instead of a monthly EMI payment. This will help you to repay your loan faster as compared to paying just once a month. This method will also help you to save on the interest rates. The two wheeler loan interest rate is something which you cannot run away from. But you can save yourself from paying a high interest rate. The longer the tenure, the higher the interest rate, the shorter the tenure, the lesser the interest rate.
3. Round Off the Payments
When you apply for a bike loan, you can calculate your EMIs using the two wheeler loan EMI calculator. If your EMI amount is an odd number, then you can round it off for a few payments accordingly. This way you will lessen the amount and also the number of months significantly.
4. Try Working Towards Alternate Sources of Income
If you do not have surplus money and still want to pay off your two wheeler loan faster, then you can take up some extra projects and earn some income from them. You can use this money to repay the loan.
5. Opt for Auto Payments and Statements Services
Some Banks and NBFCs offer you discounts if you choose to use their service of auto payments and statements. This helps you to do your payments seamlessly. The discounts help you to save some money.
Benefits of Paying Off Two Wheeler Loan Early
Other than making you stress-free there are a few more benefits of paying off two-wheeler loan faster.
1. Future Savings
You can pay your two wheeler loan faster and save on the interest rate. This will help you to save more money and accumulate saving for the future. Your financial position becomes strong.
2. Improved Debt-to-Income Ratio
Paying loans faster helps improve your debt to income ratio which is the first thing lenders consider while reviewing a loan application.
3. Better Credit Score
When you repay your two wheeler loan faster, it reflects positively on your credit report.
Follow the above tips and repay your two wheeler loan faster. This way you can be stress-free and zoom away on a road trip on your two wheeler.