Two-wheelers are the most convenient, cost-effective, and intriguing transportation medium, especially for Indian youth. Whether you need a motorcycle for everyday commutes to work or keep it for long drives and adventure trips, a new two-wheeler can last as much as 1 Lakh kilometres. Moreover, a bike allows you to glide through crowded roads easily, travel to picnic spots with family or friends, or go on an uphill journey without any worries. Have you set your heart on a bike model? You no longer need to put your dreams on hold due to a shortage of funds. Now, you can borrow a loan for a 2-wheeler, providing instant bike finance at competitive interest rates.
With many loan companies providing attractive offers, getting the right financing for your ride is essential. Here is a guide to help you do just that.
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Preparing for the Right Loan for 2 Wheeler
Buying a motorcycle is a crucial decision, and financing it with a loan requires careful consideration and preparation. The following steps will help you prepare for a loan application and boost your chances of approval:
Before applying, research and compare the loan offers that various lending institutions offer. Analyse their two-wheeler loan interest rate, repayment tenures, and other terms and conditions. With this, you will know what to expect and how much you must pay monthly.
Determine Your Loan Requirement:
When selecting a loan plan, decide how much you need to borrow. The amount you require depends on the vehicle’s cost, the down payment you will make, and additional expenses such as insurance and registration. Moreover, analyse the LTV ratio that the loan provider will provide. Some reputed lenders may finance as much as 95% of the bike’s price, meaning you make only a 5% down payment from your pocket. However, the more you borrow, the bigger will be your obligations. So, determine your loan requirement as suitable to your finances.
Understand the Lender’s Eligibility Criteria:
Check the lender’s bike loan eligibility criteria and ensure you can meet them. Ideally, you should be at least 18 years of age, salaried or self-employed, fulfilling the minimum salary requirement.
Check the Loan Cost:
After understanding your loan requirements and eligibility, choose the most affordable loan plan with reasonable interest rates, LTV ratio, repayment terms, and EMIs. Since the two wheeler loan interest rate varies significantly between loan providers, check it to ensure getting the best loan deal.
Select the Repayment Tenure Wisely:
Repayment tenure is when you must repay the borrowed amount. A longer tenure reduces the EMI amount but increases the loan cost. Therefore, use a bike loan EMI calculator to choose a tenure that best suits your budget and repayment capacity.
Prepare the Required Documents:
Check the lender’s documentation requirements and ensure you have them ready. These include your identity, residence, age, and income proof. The lender may also demand job continuity proof from salaried and business existence proof from self-employed professionals.
Enquiry About Hidden Terms and Conditions:
Some loan companies have hidden terms and conditions that only become clear if you must face them. Before signing a loan agreement, enquire about these conditions to understand them completely.
Avoid Applying for Multiple Loans:
Applying for a loan from multiple lenders negatively impacts your credit history, making it harder for you to obtain a loan for 2 wheeler. Compare loan plans and stick with a lender that best suits your loan requirements and repayment capacity.
Double Check Information Before Submitting:
Providing false information on your loan application might lead to negative responses. Therefore, always provide correct information and double-check it before applying to avoid the risk of rejection.
Evaluate Your Repayment Capacity:
Before taking out a bike loan, evaluate your finances and determine your repayment capacity. Understand how much amount you can pay each month towards the loan EMIs without increasing your financial crunch. Accordingly, create a repayment plan using an EMI calculator.
Creating a Repayment Plan
Calculating the loan EMIs is essential to creating a loan for a two-wheeler repayment plan. For that, you must consider your loan amount, interest rate, and repayment tenure. A bike loan EMI calculator helps calculate the monthly instalments easily. It is also important to remember that the term you choose largely affects your loan cost, EMI amount, and repayment structure. For instance, a longer tenure lowers your monthly payments but increases your interest cost.
Additionally, avoid missing or delaying repayments. Accurately calculate the EMIs using an online EMI calculator and choose a loan term considering your repayment capacity.
Benefits of Choosing the Right Loan for 2 Wheeler
There are multiple benefits to choosing the right loan plan for a two-wheeler purchase, including the following:
- Purchasing your dream bike becomes affordable.
- You can obtain easy financing according to your requirements and eligibility.
- The right bike loan provides financial cushion, offering flexible loan terms suitable to your budget.
- Availing of a bike loan has become convenient, making instant approval possible with online application and document submission.
- The best loan plan comes at an affordable two-wheeler loan interest rate. However, that depends on your bike specifications, income, credit history, repayment capacity, DTI ratio, etc.
- Minimal processing and documentation charges make the loan plan affordable.
Before applying for two-wheeler finance, check out the loan plans from multiple loan providers and negotiate as much as possible to get the best deal. You stand a higher chance of getting a favourable loan plan if your eligibility and credit history are up to the mark.
A loan for a 2-wheeler offers several benefits besides giving you the freedom of commuting. Plus, the easy EMI options make repayment easier than ever. However, a little planning goes a long way in choosing an ideal loan plan. Contact a reputable lender for a customised loan plan. Some benefits you can expect include attractive interest rates, quick loan processing, flexible loan tenure, easy application, and hassle-free documentation.