The two-wheeler industry has witnessed a massive expansion in recent times. Many urban citizens are purchasing two-wheelers by availing a two wheeler loan. You must always look for a two wheeler loan with low interest rate. This will reduce the overall cost of borrowing and help you save a large amount of money in the long run. Another way to reduce the cost of borrowing is by repaying the two wheeler loan as soon as possible. You can use the prepayment option offered by financial institutions in order to prepay your two wheeler loan. However, you’ll have to bear the prepayment charges levied by financial institutions for the same. Below aresome other options which you can consider to pay off your two wheeler loan faster.
Utilize your surplus income
You can use your surplus income such as bank deposits, dividends, etc. to repay the loan amount at the earliest.
Round Off the Payments
While applying for a two-wheeler loan, you can calculate your EMIs using the online EMI calculator. If your EMI amount is an odd number, then you can round it off for a few payments. This will help you lessen the loan tenure significantly.
Look for alternate sources of income
If you do not have access to surplus money, you can consider taking up some extra projects to generate more income. You can use this money for the repayment of your two-wheeler loan.
Bi-Weekly Repayment Model
Instead of going for a monthly EMI payment, you can ask your lender to schedule a bi-weekly EMI payment. This will not only help you to repay your loan faster but also allow you to save on the interest rates. Longer-tenure loans comewith a high interest rate, hence opting for a short term loan can be extremely beneficial.
Opt for Auto Payments
Some financial institutions offer you discounts if you choose to use their service of auto payments and statements. This service allows you to make timely payments. The discount offered can help you save some money too.
Now that you are well aware of some of the methods of repaying the two wheeler loan faster, let’s have a look at some of the benefits of early repayment.
Since early repayment allows you to save on the interest rate, you can save more money and accumulate saving for the future. These savings can be extremely helpful in dealing with unexpected financial emergencies.
Better Credit Score
Repaying a loan faster will boost your credit score. This will increase the chances of your loan approval in the future.
Improved Debt-to-Income Ratio
By paying off your two wheeler loan faster, you can keep debts at bay. This improves your debt to income ratio which is the first thing financial institutions consider while reviewing a loan application.
Repaying loans faster will help you lessen the burden on your finances and lead a stress-free life. Therefore, the sooner you pay off your two-wheeler loan the better it is.