Tips To Pay Off The Two-wheeler Loan Faster

Two wheelers are a preferred mode of transportation in India as the majority of people fall in the middle-class income group. They are cost-effective, fuel-efficient, and operationally cheap than other automobiles. Many prefer to buy two-wheelers through loans in order to reap the benefits offered by financial institutions. However, a loan can stretch the monthly budget, as you have to pay the EMIs on time. This increases the burden on your finance. Hence, people want to be debt-free as soon as possible. If you are among those looking to pay off the two-wheeler loan faster, then these six important tips can help you do that easily.
 
     1. Bi-weekly payments models
 
You can choose a bi-weekly mode of payment. The borrower and lender can come to a bi-weekly EMI payment agreement. This way, instead of a monthly EMI payment, the borrower can pay the amount twice in month. This will help you repay the two-wheeler loan faster. Also, accelerated repayment of the loan will help the borrower combat the impact of compounding interest over the tenor.
 

1. Select a short tenor

The tenor, interest rate and the amount of loan are the key parameters to decide the monthly installment of the loan repayment schedule. The tenor of the loan essentially determines the monthly amount that needs to be paid by the borrower. A shorter tenor generally ends up with a higher monthly installment, thereby, quickly repaying your loan advances. Clearing the liability sooner frees you from psychological stress and substantial financial burden.
 
Also Read: 5 Tips to Pay Your Bike Loan Easily
 

1. The 50/30/20 rule of budgeting

 
According to this rule, an individual should spend 50 % on needs, 30% on wants and 20% on savings. This approach distributes your finances towards different goals in a practical way. When you are saving; you must create an emergency fund, which can be used to pay off the outstanding amount. This way you can make extra payments and get rid of the debt faster