A two-wheeler loan is the simplest way to finance a vehicle of your choice. You can purchase a scooter or motorcycle without worrying about the entire cost by availing a 2-wheeler loan. You can repay the amount in full with interest in small EMIs. Banks usually disburse loan based on vehicles cost and your repayment ability.
Banks offer affordable 2 wheeler loan interest rates as it is rising in demand among the youth. You can use a two-wheeler loan calculator to check your EMI liability before applying for a loan. To secure the best finance option for making your purchase, you need to understand the A-Z of two-wheeler finance.
This article will help uncover every crucial detail you need to know for availing a 2-wheeler finance.
Types of two-wheeler loans
Bike loans are available in either of these two choices.
1. Secured 2-wheeler loan:
You can avail a secured loan by providing collateral for security. It is advisable to choose the vehicle as collateral, thereby giving the lender a legal right to seize the bike if you default on making its repayment.
2. Unsecured 2-wheeler loan:
Availing of an unsecured loan does not require you to provide collateral. However, most lenders would need a strong credit profile and good financial health to approve unsecured financing of a vehicle.
Two-wheeler loan eligibility
To be eligible for a 2-wheeler loan, you must be at least 21 years of age. The upper limit of age is 60 for salaried class and 65 for self-employed individuals. Also, you need to maintain a decent CIBIL score to prove your creditworthiness.
Further, you might need to prove your ability to repay the loan (source of income, salary slips, current financial health, etc.). It helps banks ensure that you will not default on the repayments. You can use a 2-wheeler loan eligibility calculator on your lender’s website to verify your eligibility status.
Advantages associated with two-wheeler finance
Some crucial benefits connected to a bike loan are listed below:
- Due to the high demand of 2-wheeler finance, you can avail a loan with minimal documentation.
- By making timely repayments, you can improve your credit score, and build a decent credit history. It will help you improve your eligibility for availing a loan in future.
- You can easily apply for a bike loan online through your lender’s website, or by asking your bike dealer for an offer available. Look out for seasonal deals and offers if available.
- You can choose a flexible tenure for making repayments in small EMIs.
- A 2-wheeler loan is sanctioned quicker as compared to most other loan options.
Things to keep in check while applying for a bike finance
An easily accessible loan might not be the best financing instrument available to you. So, before filling out an application form for a 2-wheeler finance, check out the listed things.
1. Compare interest rates:
Many financial institutions offer two-wheeler loans, but there might be a difference in interest rates. A slight change in 2 wheeler loan interest rate can make a significant change in the amount you have to repay. Choose the lender who is offering the loan as per your requirements in the lowest interest rates.
2. Make a repayment plan in advance:
Defaulting on a bike loan repayment can have a significant impact on your credit score. So, to make sure you can repay in time, do check out the two-wheeler loan calculator to understand your EMI liabilities.
3. Don’t over-borrow:
Even if you are eligible for a bike loan, it doesn’t mean you can repay the amount on time. At times, you might face a sudden capital requirement during your repayment tenure, so make sure you can manage to make repayments without compensating your monthly expenses.
Conclusion:
Undoubtedly, a two-wheeler loan can help finance your dream vehicle. Today, it is easy to avail a bike loan because of increased competition among lenders and massive demand for 2-wheeler finance. You can check out your eligibility using a bike loan eligibility calculator online. Before filling out your application, use a two-wheeler loan calculator to understand the EMI liability. Go through this article to understand every crucial aspect of bike finance to get the best deal for your purchase.
