Taking a loan for two wheeler in 2021 has become a lot easier. There are a lot of banks and NBFC’s that provide motorbike loans with repayments in easy installments and attractive interest rates. A two-wheeler loan is a type of financing that enables you to purchase a two-wheeler without straining your finances. These loans are secured by collateral too through hypothecation of the bike to be purchased.
However, if you need financing for a motorcycle or a scooter, you must pre-plan repayment strategies ahead of time. You should be certain about how much funding you will need for your two-wheeler and how much you can afford each month as EMI payments.
You can obtain a loan for two wheeler in a variety of ways. These points can make the entire process easy:
- You can apply with a lender of your choice: Many lenders offer zero processing fees, free accessories, or insurance, and even free or reduced interest rates.
- Be eligible: If you are eligible, you can negotiate the terms with the lender to get the best rate and other favorable terms on the loan.
- Keep all documents ready: Before applying for a two-wheeler loan, you should have the required documents ready for submission as and when needed.
Why Take a Loan for Two Wheelers?
There are many benefits to applying for a loan in order to purchase the bike of your desired make and model.
Here are some of them to recognize:
- You can get the entire funding you need for the bike of your dreams through 100% bike financing.
- It gets easier to avail funding that you need if you apply with a co-applicant or guarantor holding high creditworthiness.
- You can avail affordable interest rates on your bike loan, which makes it convenient to manage your repayments and save on unnecessary expenses.
- There are many loans repayment options to choose from.
- It is possible to improve your credit score if you pay your EMIs in time and in full.
Important Documents Needed to Avail a Bike Loan:
- ID proof: PAN card, voter ID card, passport, driving license, etc.
- Address proof: Voter ID card, passport, driving license, utility bills, etc.
- Proof of income for salaried individuals: Last 3 months’ salary slips, ITR of past 3 fiscal years, bank account statements of at least 6 months
- Income proof for self-employed: Bank statements of at least 6 months, ITR of 3 fiscal years, audited financial statements
Things to Consider Before Sending Your Bike Loan Application
These tips will help you get the right loan affordably and on favorable borrowing terms.
- Research is key: Before applying for a motorbike loan, do your research.
- Compare the varied loan options offered by different lenders.
- Compare interest rates, processing charges, repayment options, as well as other terms.
- This will allow you to choose the most affordable option.
- You should choose your tenure carefully: The term of your loan will affect how much you must repay each month.
- Likewise, you must ensure that you have the funds to pay your EMIs.
- A shorter-term will allow you to repay your loan more quickly.
- However, your EMIs may be higher with long tenures.
- Financial stability: You need to be certain about your monthly expenditure, so you face no issues to clear your monthly EMIs.
- Compare between fixed and floating rate lending systems: Depending on the lender, you might be offered options to choose between fixed and floating rates of interest.
- A floating rate of interest changes according to changes in market rates.
- Market rate changes do not affect fixed rates.
- Floating rates, however, are generally lower than fixed rates by a few notches.
- Calculate your EMIs before you apply: Compare your loan options and make sure to compare the respective EMIs before finalizing your loan option.
- It is wise to select a loan option with easy EMIs and tenure flexibility for affordable repayments.
- Enquire about pre-closure charges: If you are planning on prepaying or closing your two-wheeler loan account at any point before the tenure ends, enquire about the fees involved.
- While some lenders might charge a fee, others may not.
Tips to Complete a Two Wheeler Loan Application Successfully
Sometimes, loan applications sent by certain individuals get rejected. This is certainly not a good experience and can impact your credit score negatively too.
The following list contains tips that will help you successfully apply for a loan for two wheeler.
- Assess the exact amount you need: Determine your funding needs and figure out how much money is needed to purchase the bike you want. Do not apply for a loan amount that is more than what you really need.
- Review your credit score: Credit score is one of the most important factors that affect loan approval.
- Check with the lender to see if your credit score is sufficient.
- Generally, applicants with lower credit scores face more rejections by lenders due to increased financial risk.
- Before applying for a loan, take measures that can help improve your credit rating.
- Fill out your loan application precisely: Be sure to include all details required by your lender. Submitting application forms with inaccurate details may increase the chances of rejection.
- Send all necessary documents: Before you submit your loan application, be sure to include all documents required by the lender.
- Failing to submit necessary documents may result in the rejection of your loan application.
- Apply with your existing lender: Applying for a loan with your existing lender increases the chances of your loan approval even though you don’t meet all their requirements.
- As you are an existing customer, few lenders may overlook your application’s shortcomings because of your good relations with them.
- It also helps eliminate lengthy paperwork requirements as your important documents are already available with your lender.
If the above-mentioned points are followed accurately, then availing a loan for two wheeler becomes easy for your desired bike purchase. In addition, be sure to choose a bike model that is a balanced combination of affordability and performance so your expenses on the vehicle are kept in check, eliminating unnecessary costs.
