Owning a bike or scooter makes daily commutes so much more easier and convenient. However, buying a two-wheeler vehicle is no small task. Such large-ticket purchases require thorough financial planning and management. A great way to buy a bike or a scooter is to get a bike loan.
A two-wheeler loan is a great way of acquiring the required funds at competitive interest rates. This credit facility makes it easy for you to get the bike of your dreams. Let us delve deep and look at some of the advantages a two-wheeler loan has to offer.
Benefits of a Two-Wheeler Loan
Here is a list of some of the most significant benefits of financing your next bike purchase with the help of a two-wheeler loan.
- Up to 100% Financing
You can secure up to 100% of your two-wheeler’s on-road costs with the help of a bike loan. You are required to make a nominal down payment, while the rest of the expense can be taken care of with this loan. The sanctioned amount depends on your eligibility and repayment capabilities. Thus, in order to get a higher amount, it is essential to keep a constant check on your credit score.
- Cash Repayments
As amounts sanctioned under bike loans are lower compared to other loans, some lenders allow borrowers to repay the amount in cash. This facility can be of great help to individuals who do not have a bank account and wish to get a loan.
- Flexible Repayment Options
Depending on your financial situation, you can choose a repayment tenure that suits you the best. Generally, you are offered two-wheeler loans with tenures of up to 5 years. The tenure you opt for plays a significant role in determining the EMIs you are liable to pay and the cumulative cost of your loan repayment. Your instalments are likely to reduce with a longer loan tenure as it increases the cash outflow towards interest. Meanwhile, a shorter tenure enables you to save on interest dues by increasing your EMI amounts. Thus, it is important to assess your finances prior to deciding on the tenure for your loan.
- Quick Processing
Getting a bike loan has become way more quicker and convenient in today’s day and age. If you choose to apply for a two-wheeler loan online, the application is processed faster and the disbursals take just a few hours. This allows you to buy the bike you want without having to face any kind of delay.
- Minimal Documentation
When looking to get a two-wheeler loan, you do not have to worry about handling a mountain of paperwork. You are no longer required to submit a huge mound of proofs and documentation when getting a two-wheeler loan. Simply, submit your KYC documents and get the required loan instantly. In addition to this, digital journeys have made the process much more seamless. This significantly reduces the effort and time involved in the application process.
- Competitive Interest Rates
You can find numerous lenders offering a variety of two-wheeler loans in India. In an attempt to stand out and attract more customers, they are likely to provide the required credit at attractive bike loan interest rates. These usually range between 10% to 25%. Make sure to pick the offer that suits your requirements the best.
- Prepayment & Foreclosure Facility
With prepayment and foreclosure facilities you can make lump sum payments to lower the principal amount due or repay the entire balance in one transaction. In either case, you end up closing your loan prior to the end of your loan term. Some lenders offer this facility for free while others charge a nominal fee.
- Additional Offers
A majority of lending institutions have tie-ups with bike dealerships and automobile companies. Under such partnerships, you can get attractive offers like cashbacks, discounts, free insurance covers, and so on with your bike purchase. In addition to this, you are also offered favourable loan terms like flexible repayment schedules, lower processing fees, and so forth.
Things To Keep In Mind When Applying For a Two-Wheeler Loan
To make sure that you can enjoy all the benefits a two-wheeler loan has to offer, it is essential to get the loan at terms that suit your finances the best. Here are some things to consider before applying for a two-wheeler loan.
- Credit Score
Maintaining a good credit score can help you get the loan you need at the desired interest rates. Your credit score allows the lender to gauge your creditworthiness, helping them analyse the risk associated with lending their money to you. The credit score usually ranges between 300 to 900, where a score of 750 and above is usually considered to be an excellent score. Having a good credit score increases your chances of getting a higher loan amount with favourable terms.
- Debt-To-Income Ratio
If you have too many debts at the same time, your finances are likely to suffer from the pressure of repayments. Your lender also understands this and will thus check your debt-to-income ratio. The lower the ratio the more likely you are to get the required loan. This assures the lending institution of your repayment. Thus, it is advisable to close any ongoing debts prior to applying for a two-wheeler loan. This will not only increase the possibility of you getting the bike loan, but also, allow you to manage this new loan easily.
- Employment & Income
Your income and employment indicate your ability to repay the loan. A stable income and good employment history are key to getting a new two-wheeler loan. This is an integral part of the eligibility criteria for getting a two-wheeler loan. The minimal income and work experience required may differ from one lender to another. Generally, individuals with 2 to 3 years of work experience and an income of about ₹10,000 a month can get a two-wheeler loan.
Getting a two-wheeler loan is a great option to finance your next bike purchase. Some lenders even allow you to borrow money to buy a used bike or scooter. Check the multiple options available to you, prior to making a decision. Make sure to evaluate your options well and choose a loan offer that suits your monetary requirements. Get started today!
