Closing a Bicycle Loan, is that Worth the Trouble?
The electric bicycle has a greatly increased popularity. This is certainly not escaped by the banks. Increasingly more and more financial institutions offer their customers the possibility to take out a special bicycle loan. Belgians increasingly go to the bike to move. That is not so strange. Taking the bike is fun, it is good for health and moreover it is cheaper than getting the car out of the garage. On the other hand, purchasing a quality electric bicycle can cost a considerable sum of money. Whoever buys such a bicycle via the internet can quickly pay around 2,000 euros. For the best private models, the cost price rises to just under 6,000 euros or more. It is therefore not surprising that more and more people are looking in the direction of a lender for the purchase of such a bicycle.
Increased interest among large banks
Several major banks such as AWR and Bikeryz that offer a special loan for the purchase of an electric bicycle note that the number of people who opt for such financing increases significantly. Belfius claims that in the past year, just four times more bicycle loans were taken out. At AWR it can be heard that during the first quarter of this year they have granted three times as many loans as in the same quarter last year.
The popularity of the bicycle loan has not escaped other players in the financial market. It can be established that the number of parties offering a bicycle loan is also on the rise. For example, Argenta has opted to include this type of financing in its range from the beginning of this year. This followed in the footsteps of not only major banks such as AWR and Bikeryz, but earlier BNP Paribas Fortis, Beobank as well as Cetelem also announced that they would offer a special loan for an (electric) bicycle.
How much does a loan for an electric bicycle cost?
The moment you wish to borrow money for the purchase of an electric bicycle, you can take into account that the cost price you have to pay is in line with that of an electric car. The cheapest rate on the market at the time of writing is 0.85 percent. The moment you choose to take out a bicycle loan for an amount of 2,000 euros, it is possible to use a repayment term of up to 24 months. This ensures that people have to take into account a monthly payment of 84 euros for their electric bicycle. Eventually they will have paid a total interest of 17.71 euros at the best cost price.
Rate increase for bicycle loan in sight
The particularly competitive rates offered by AWR & Bikeryz of 0.85% at the time of writing are only of short duration. Both banks have now noted that this rate is only valid until 30 April 2018. From that moment onwards, the interest rate will in all likelihood be raised considerably. At the time of writing, for example, Beobank uses a current interest of 1.29 percent. This means that its financing is a good 0.20 percent below that of Argenta. At Cetelem, the interest on a bicycle loan currently amounts to 2.99 percent.
Close a bicycle loan or not?
In the end we still have to give an answer to the key question of this article. Is it worth it or not to take out a bicycle loan for the purchase of an electric bicycle? It is a fact that these bikes are getting better and better. The possibilities are increasing, the quality is improving and so the average price tag is also rising. Moreover, it is striking that more and more people prefer to invest once in a really good electric bike, which is slightly more expensive than opting for a cheap copy which they have to replace in the foreseeable future. Does this also apply to you, but do you feel very little about getting into your savings account for that?