Two-wheelers have substantially improved the convenience and ease of our lives. In addition to being a popular choice for travel, they offer good mileage and produce fewer pollutants than large vehicles. More and more people are able to ride their dream bikes home thanks to the various repayment options and low-interest rates offered by these loans. However, investing in them for daily transportation to the grocery store, office, college, etc. is worthwhile. A two-wheeler loan is one that is given to people who want to buy a motorcycle or scooter of their choice and pay for it with equated monthly instalments (EMIs)
Unquestionably, one of the fastest-growing industries in India is two-wheeler loans. It reduces financial stress by offering enticing two-wheeler loan interest rates and, for some customers, quick disbursement/approval.
You can get the precise amount of money you need to buy a bike with a two-wheeler loan. A two-wheeler is very important to our daily lives, and anything that is important to us is worth taking any financial risks for. These lending institutions assess your qualifications and ability to repay the loan before applying a specified rate of interest. You have the option of choosing monthly instalment plans to pay back your loan. Throughout the loan’s term, you must make sure you make on-time EMI payments.
Here is the checklist and requirements for a two-wheeler loan
- Age: To be eligible to apply for a scooter or bike loan in India you must be at least 21 years old. You must prove that you have the income to repay the loan because the car will be registered in your name. In some cases, the lender may accept your application if you are under 21 and have a guarantor for the loan.
- Salary: A higher salary assures creditors that you will be able to pay back monthly EMIs on time. As a result, your risk assessment is low and with this you will be more likely to be approved for a loan. With income, there is a higher chance that the loan will be approved quickly.
- Credit score: When planning to apply for a bike loan kindly keep in mind your credit score as it is an important consideration while checking your eligibility. A bad or poor credit rating will lead to rejection of the loan application by the lender. On the other hand, if you have good credit, you can be qualified for loans with favourable terms (a score of more than 750).
- Area of Residence: The city in which you live may also affect your eligibility.
- Stability and Job Experience: Lenders frequently want at least a year of work experience. Additionally, you need to have worked for your current employer for at least six months to be eligible for a two-wheeler loan.
What documents are required while applying for a two-wheeler loan in India?
To execute your loan application, banks and other financial institutions require a number of documents. You must present a copy of your PAN card that has been self-attested as identity. Attach a self-attested copy of the passport or any other address proof as evidence.
Keep all bank and pay stub statements from the previous three months. Your bank would need to see a copy of the most current income tax return (ITR). A set of passport-sized pictures should be prepared, and don’t forget to submit the application.
Banks could require additional documentation from you if you are self-employed. Send the profit and loss and balance sheets for your business. The latest two years’ worth of tax returns must be presented. Before authorising the loan for a two-wheeler, banks investigate the solvency of your company.
Below are some advantages of having two-wheeler loan
The length of the loan has a significant impact on whether or not it is the better option. A flexible tenure gives you the freedom to choose from a variety of possibilities. Therefore, having flexible tenure aid in your decision-making and financial planning.
Increases your CIBIL Score
A solid CIBIL score is necessary for many loans involving sizable sums of money, such as personal loans and home loans.
Your history of loan credits and repayments over time is summarised in your credit report, or CIBIL. Additionally, because two-wheeler purchases are less expensive, two-wheeler loans are the easiest loans to repay, giving young professionals a chance to establish their CIBIL Scores.
You can pay back the loan with two-wheeler financing in convenient instalments. The borrower has the option of choosing the ideal structured equated monthly instalment (EMI) based on convenience. Depending on the loan plan and tenure you are considering applying for, you may use a two-wheeler loan EMI calculator to get the exact amount of EMI value that you are required to pay. It will assist you in making an advance plan for your finances.
Process for Flexible Loans
Loan approvals are moving online with the financial sector’s digital expansion. Within a day or two, the loans are sanctioned and distributed. Without physically visiting the lending institution’s office or waiting in line, one can find all the essential information on the lender’s website and submit the appropriate paperwork online.
An intriguing aspect of getting a loan from a bank is that because of the Indian Motor Act, loans are approved with coverage for both your accidental injuries and the vehicle’s insurance. The loan also covers any additional expenses, including insurance, the cost of accessories, and registration.
How Much Do Interest Rates Charge?
The rate of interest for the two wheelers depends on the applicant’s yearly income, credit rating, and market resale value. The rate of interest varies from lender to loan and it is between 10% to 25%. Financial institutions offer both fixed and adjustable interest rate options. In fact, due to intense competition amongst lending institutions in recent years, two-wheeler loan interest rates have fallen. Additionally, bike loans have variable terms that range from 12 to 60 months. For lower EMIs, the applicant may also choose a longer term.
Advice on How to Complete a Two-Wheeler Loan Application
Now that you know how to apply for two-wheeler loans in India successfully, let’s look at the considerations you should make. These recommendations may help you choose the right loan and avoid making excessive payments.
The first step is to conduct extensive research before applying for a motorcycle loan. Make sure you do extensive research. Compare every option that various lenders have to offer. Compare the loan terms, taking into account the two-wheeler loan interest rates, processing fees, and available payment options. It will help you choose the best options for yourself.
Choose your tenure wisely: The length of time your loan will be outstanding will determine how much you must repay each month. Make sure you can pay the EMI. This calls for cautious consideration when selecting your term. With a shorter period, the loan will be repaid more rapidly. However, your EMIs will be significant. Check how much instalments you can pay every month so that you can maintain monthly finances easily.
Decide on a reasonable interest rate: Your interest rate will have an impact on your loan’s total cost. Additionally, it affects your EMI. One can keep their monthly payments low by selecting a loan with a low-interest rate. Your loan will be less expensive as a result.
A two-wheeler loan, also known as a bike loan or scooter loan, is a financial product that enables a person to borrow a set amount of money from a bank or other financial institution to buy a two-wheeled vehicle like a bike or scooter. The borrowed amount may be repaid over the borrower’s specified repayment period. Knowing the fundamentals of a two-wheeler loan will make it simple for you to borrow the necessary money online from the bank or other financial institution of your choosing.
If you have some money saved up for a down payment, you can get the two-wheeler loan at a cheaper interest rate from lendingplate. If you pay a small amount upfront, the majority of lenders will offer you a better interest rate.