Tips to Pay-off two-wheeler loans faster

Two-wheeler loans act as the best financing option to add comfort to your daily life. When you apply for a loan, you enter into a loan agreement that defines your repayment terms and other loan details. You must pay your dues in a timely and disciplined way; here are a few tips to pay off the two-wheeler loan faster:

Choose bi-weekly payment mode

You can choose a bi-weekly payment mode to pay off the loan faster. In this mode of payment, the lender and borrower agree on a bi-weekly EMI payment agreement. The borrower pays the amount twice a month. This will help in repaying the two-wheeler loan faster. Also, accelerated repayment of the loan will help the borrower combat the impact of compounding interest over the tenor.

Choose a short tenure

The amount, interest rate, and tenor are the key parameters in deciding the monthly installment of a loan repayment schedule. Generally, the shorter is the tenures, the faster will be the loan pay offs. Clearing the liability sooner frees you from psychological stress and substantial financial burden.

Go with auto-payments

Some lenders even offer discounts if the borrower opts for their service of auto payments and statements as it saves a lot of time and paperwork for the former every month. Since the payments are made seamlessly, there are no late fees, and the discounts help you to save a few bucks.

Adopt the 50-30-20 rule of budgeting 

Another way to repay the loan faster is by making loan prepayment. The borrower can prepay the loan with surplus funds in any given month. Although, certain financial institutions may charge you a certain amount as a pre-payment fee. However, there are lenders, who are willing to accept one of two extra EMIs. Borrowers should take advantage of that option to reduce the financial burden. Foreclose a loan only if the savings in the interest is more than the foreclosure charges. However, if you have surplus funds, you can pay an extra one or two installments from time to time, without any penalty.

All the above-mentioned ways help you repay the loan easily and in some cases even faster. Be a responsible borrower and repay your dues on time.