Today, two-wheelers have become increasingly common, and many rely on one for their daily commute. From helping you reach places on time to being a cost-effective solution than other private transport, having a two-wheeler benefits you in many ways.
The price range for a good two-wheeler is also a plus point, as it is fairly cost-effective. However, there are some that can easily go into lakhs. This may make it challenging for you to get your hands on the bike you want. Thankfully, by availing of a two-wheeler loan, you can get the financing you need.
A two-wheeler loan is easily available online and, in some cases, can be availed instantly. The bike loan interest rates are also fairly low, but planning it is still a crucial step. This not only helps ensure that you get the best bike loan interest rates but also that you can repay your dues with ease.
Read on for a comprehensive guide on how to avail of a two-wheeler loan.
Understand the Role of The Bike Loan Interest Rates
Bike loan interest rates are levied by the lender on the loan amount you avail and for the tenure you choose. The amount you pay in the form of interest constitutes a major part of your borrowing costs.
Generally, higher bike loan interest rates mean high borrowing costs and vice-versa. This is why you need to choose a lender that offers the best bike loan interest rates for the loan amount and tenure you want.
It is also important to note that there are certain factors that affect the interest rates you get. While the loan amount and tenure top that list, your credit score, and income are also important. You can work on these factors to ensure that you get a cost-effective two-wheeler loan.
Eligibility Criteria for a Two-Wheeler Loan
Every lender has eligibility criteria, and if you do not meet these terms, you may not get approval for your loan application. Generally, the eligibility criteria for a two-wheeler loan are as follows:
- Monthly income
Your monthly income helps the lender assess your repayment ability and, as such, is an important factor that lenders consider. The minimum monthly income range is generally dependent on the city you reside in.
- Credit score
Your credit score is based on your past and current borrowings, and it gives the lender an idea of whether you have a high or low risk of default. Generally, a score above 750 and closer to 900 gives you the best chance of approval for a two-wheeler loan application.
Generally, the age criteria state that applicants need to be between 18 and 60 years of age.
Keep in mind that the above factors and their specifications vary for each lender. You can check the eligibility criteria on the lender’s website and also calculate your eligibility to know whether you qualify for a two-wheeler loan.
Documents Needed to Apply for Two Wheeler Loan
As the lending industry has evolved in the past few years, more and more lenders have started offering loans with minimal documentation. This makes the process quick, simple, and hassle-free. Usually, lenders ask for ID proof, address proof, and income proof. For ID and address proof, you can submit your PAN card, passport, voter ID, or driving license.
Your income proof will depend on your employment type. If you are a salaried employee, you will have to submit salary slips, filed ITR, and bank statements. As a self-employed applicant, you will need to furnish your bank and audited financial statements and ITRs.
Steps to Avail a Two-Wheeler Loan Online
With digitization, availing of a two-wheeler loan online is a matter of minutes. Once you choose the lender you want to borrow from, follow the steps given below to get your loan.
- Visit the lender or an aggregator’s website
- Click on the section for a two-wheeler loan
- Fill out the form with the necessary details
- Upload the required documents
- Submit the form
Upon submission, the lender will verify your details, and a representative will get back to you about your application.
Things to Keep in Mind to Get The Best Loan
- Assess your repayment terms
Your repayment terms comprise the bike loan interest rates and tenure. It is important to ensure that your EMIs fit within your budget comfortably. Generally, a lengthy tenure is better as it results in a lower EMI amount.
- Calculate, check, and compare
Calculating your EMIs is the best way to know whether the loan will fit into the budget without costing too much. However, that’s not all. After you calculate and check your EMIs, comparing offers is key.
Compare offers from various lenders to get a better idea of which lender to choose. With an online EMI calculator for a two-wheeler loan, you can calculate your EMIs and compare different offers as many times as you want.
- Note the other charges
Apart from the bike loan interest rates, lenders also levy processing charges, prepayment and foreclosure charges, and other fees. These fees and charges also add to your cost of borrowing and are, therefore, important to know.
- Leverage the seasonal and pre-approved offers
Lenders generally make seasonal offers available during the festive season. These offers typically come with favorable repayment terms that can improve your borrowing experience.
On the other hand, pre-approved offers are those where the lenders have already assessed your profile and have a bike loan offer ready for you. Since pre-approved offers are generally available only to exceptionally creditworthy borrowers, they come with better repayment terms.
How to Optimise Your Two-Wheeler Loan
When you optimize your borrowings, you can make the most of it and secure your financial future – all at the same time. Optimizing your two-wheeler loan simply means ensuring that you borrow what you need and choose a tenure that is comfortable for repayment.
To make things simple, you can use an online EMI calculator for a two-wheeler loan. This digital tool takes into account your bike loan interest rates, tenure, and amount to give you an estimate of your monthly repayment.
You can adjust these parameters as many times as you want until you find terms that align with your budget. Optimizing your two-wheeler loan helps ensure that payments never become a burden.
Armed with this information, make sure that you get a two-wheeler loan only after understanding its implications on your current and future financial situation. This way, you can prioritize your financial well-being while ensuring that you get the bike you want.