When you think about easy manoeuvrability, less fuel consumption, and easy daily commuting, the first thing that comes to your mind is purchasing a scooter, e-bike or motorcycle. Compared to cars, two-wheelers are affordable and have lower maintenance costs. While you will find hundreds of options in the Indian two-wheeler market, one thing you must be worried about is their ownership cost. That is when a two-wheeler loan provides the necessary funding.
You can bring your favourite bike home by making a small down payment and paying its remaining cost in EMIs to the lending institution. However, choosing the best bike loan is essential to enjoy the maximum benefit. Here is a complete guide to help you choose the best bike loan.
Always check the maximum loan amount a lender can provide to fund your desired bike purchase. If the bike you want to purchase is expensive and your savings are insufficient, a two-wheeler loan can fund its purchase without asking you to make a bigger down payment. Some lending institutions also offer zero down payment bike loans, a bonus for those falling short of funds.
While looking for a bike loan, opt for a lender funding up to 95% of the bike’s cost. However, evaluating your finances and avoiding over-borrowing is also essential, as borrowing more than you can repay will create a debt circle that can damage your financial well-being.
Each lending institution has specific eligibility criteria loan seekers must fulfil to qualify for their loan. These include their age, employment status, work experience, monthly income, etc. Go through your selected lender’s eligibility conditions and ensure you fulfil each criterion before applying. The eligibility criteria should suit your profile and enable you to get an appropriate loan plan.
While applying for a two-wheeler loan, you must check the lender’s documentation requirements to complete the loan process. Most lending institutions ask for your KYC documents, identity proof, address proof, income proof, etc. Depending on whether you are a salaried or a self-employed individual, you must provide different documents according to the lender’s policy. So, check their documentation requirements and keep them ready at the time of application. Before applying, ensure you can fulfil their needs to avoid the hassle.
Finance providers determine two-wheeler loan interest rates based on your income, credit history, debt-to-income (DTI) ratio, loan amount, down payment, repayment tenure, work experience, employment history, etc.
When you purchase a bike with a loan, although you can use it for your personal purpose, its ownership stays with the lender until you repay the borrowed amount with interest. If you default, the lender can seize and auction your bike to recover the unpaid amount. Therefore, compare different lenders’ interest rates and opt for the lowest rate offer to minimise your loan cost. A lower interest rate will make the repayment easier, avoiding default and saving your bike loan from foreclosure.
The flexibility of repayment is a bonus you get with a bike loan. You can fund up to 95% of your bike purchase and repay it to the lender in easy EMIs according to your repayment capacity. Lenders offering flexible loan tenures do not force you to repay the loan within a fixed period. You can choose a repayment term according to your affordability and repay the EMIs without stressing your budget. A two-wheeler loan EMI calculator helps select EMI amounts for different loan terms, allowing you to choose a repayment schedule with budget-friendly EMIs.
A longer-term reduces the EMI amount and makes them more manageable, while a shorter term increases the monthly obligation. Only a select few with high monthly affordability can manage big EMIs conveniently in their budget. So, opt for a lender with repayment flexibility and use a bike loan EMI calculator to choose a loan term with affordable EMIs.
Lenders use various methods to calculate the interest. Some lending institutions charge a flat interest rate, while others levy a floating one. A flat interest rate remains the same throughout the loan tenure, while a floating interest rate fluctuates according to the repo rate. As the RBI increases or decreases its repo rate, your two-wheeler loan interest rate responds too. So, before opting for a loan plan, enquire about the interest type they charge on bike loans and see if you are comfortable with it.
Earlier, applying for a bike loan was a complicated and time-consuming affair. These days, many NBFCs offer hassle-free loans with instant approval and quick disbursal procedures. Check their eligibility conditions, documentation requirements, the loan application process, verification methods, and approval speeds before finalising a lender. Prefer a loan provider that sanctions loans without calling you to their branch office or asking for documents in physical form. This can save you time and effort.
The lender’s online reviews and customer service also matter when selecting a loan provider. Read their online reviews to check what their past and current customers say about them. Call their customer service number and see how their representatives respond to your query. Their customer service should be easily accessible, and reviews should be mostly positive to build an impression.
A two-wheeler loan comes with numerous benefits. Besides allowing you to commute conveniently, owning a bike saves money on fuel and maintenance costs. Cover your bike’s purchase with a minimal down payment and repay it in easy EMIs. Choosing a suitable loan tenure and some planning will go a long way!
Are you looking for an ideal bike loan in India? Use the above tips to choose the best loan plan and take advantage of quick loan processing, hassle-free documentation, easy eligibility conditions, and attractive two wheeler loan interest rate.