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Two-wheelers offer a convenient, quick, and easy way to travel to your destinations. When it comes to these motorcycles, you have a plethora of options offered by various brands. However, if you want one with the best features and safety provisions, expect to pay a high price.
Thankfully, with a two-wheeler loan, you need not stress about making a big lump sum payment. Today, you can easily apply for this financing with a lender of your choice. With attractive interest rates and flexible repayment tenures, you can tailor the loan to suit your needs.
Read on to learn a few points you must remember and avoid when you apply for a two-wheeler loan.
Compare the Interest Rates
While applying for a bike loan, the first thing you must check is the lender`s bike loan interest rate. Leading lenders in India offer competitive interest rates, ranging from 6.49% p.a. to 28.30% p.a.
Checking the bike loan interest rate rate is important because it affects your overall cost of borrowing. So, a lower bike loan interest rate will help you save more, while a higher rate increases your interest outgo.
However, the interest rate depends on factors such as your bike model, income, employment type, credit score, etc. Hence, researching and comparing a few loan options is ideal before selecting a lender.
Be Aware of the Additional Fees and Charges
In addition to interest, you will have to pay other fees and charges when availing a two-wheeler loan. These are loan processing charges, documentation charges, late payment charges, stamp duty, etc. Knowing all these charges is crucial before you finalise any lender.
Keep in mind that you can negotiate for better terms, and even get waivers on certain fees. Lenders offer such perks to applicants with excellent financial profiles or long-standing customers.
Calculate Your EMI Before Applying
Once you have compared various lenders, calculate your EMI well in advance to plan your repayment structure. This helps you assess your overall borrowing costs for your two-wheeler loan.
You can use the bike loan EMI calculator to calculate your EMIs quickly and accurately without much hassle. Enter the loan amount you plan to borrow, tenure, and interest rate in the calculator and easily estimate your EMI.
Simply adjust the tenure and loan amount to get the most affordable loan terms.
Build Your Creditworthiness
When you apply for a two-wheeler loan, lenders check your credit report to assess your creditworthiness. All lenders will have a minimum score, and you must meet this criterion. Getting a bike loan can be difficult if you do not have a good credit score.
Lenders decide your interest rate based on your credit score. So, building a healthy score is essential before applying for a bike loan. To improve your credit score, you can:
With these steps, you can boost your credit score and improve your chances of getting a loan.
Check Your Eligibility
When you apply for a two-wheeler loan online or offline, you must check the eligibility terms set by the lender. This helps you avoid rejections or unnecessary delays in loan approvals. Here are the general eligibility criteria for a bike loan:
Note that these eligibility criteria can vary from one lender to another. So, check with your lender before applying for a loan.
Keep all Your Documents Ready
When you apply for a two-wheeler loan, you must have the following documents ready:
While you can get a bike loan quickly after approval by submitting these documents, remember that lenders may ask for additional documents if required.
Apply for a Loan When There is a Seasonal Offer
Most loan providers offer seasonal discounts on bike loans, especially during festivals. You can take advantage of such offers and schemes to get zero or low processing fees, lower interest rates, instant approval, or pre-approved loans.
Consider Making a Sizeable Down Payment
While you may get a two-wheeler loan that doesn’t require a downpayment, it is always better to make one. This is because it reduces the principal amount borrowed, and this lowers your interest outgo, which leads to savings. Moreover, when you make a sizeable downpayment, lenders are more likely to offer better terms.
Here are a few points you must avoid when opting for a two-wheeler loan.
With the above points in mind, you can buy your favourite bike easily and smartly. Remember, taking a two-wheeler loan or any form of credit is a serious financial decision. So, you must take a loan that fits your repayment capacity and ensure you repay the loan on time without putting undue stress on your finances.
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