7 Advantages of Two-Wheeler Loans that Make Your Life Easy

Introduction

In India, narrow roads and traffic congestion drive the popularity of two-wheelers among the old and young alike. And, the low maintenance cost, fuel efficiency, and better resale value make it a pocket-friendly choice for the rider. The two-wheeler market continues to expand with new bikes with better features, designs, and capacity being launched almost every day. However, buying a bike in one go by spending all your savings may not be a smart decision. So, what should you do? This is where two-wheeler loans can help. Available at reasonable interest rates, these loans are flexible and easy to apply for, thus helping more and more people to ride their dream bike home.  

Two-wheeler Loans

A scooter or bike usually costs between Rs 40,000 and Rs 1,00,000 depending on the brand, model and features. But a young salaried person may not have enough bank balance to pay such a big amount at once or the heart to risk sending his annual budget for a toss. Financial institutions understand this and therefore, offer loans at attractive rates and favourable terms. A two-wheeler loan is usually considered a secured loan where the bike acts as the collateral, which means the vehicle remains mortgaged until full repayment of the loan. Once the last instalment is paid, you must terminate the hypothecation bond and submit the necessary documents to the RTO to close your two-wheeler loan.

Also Read: Why Should I Opt For A Two-Wheeler Loan Over Making A Direct Cash Payment?

How Two-wheeler Loans Make Your Life Easy?

 

1. Less Burden on Pocket

Buying a two-wheeler via a loan is a great move as it gives you the comfort of repaying the loan in easy instalments and, that too, according to the convenience of your monthly budget. One can decide on a comfortable EMI that will not put stress on your monthly budget. And in a year or two, you would have settled the loan without even realising. On the contrary, paying the whole amount at once can leave you cash-strapped. Also, when you pay smaller and more manageable EMIs, you will be able to save enough for other expenses such as life insurance premiums, home rents, medical bills etc.
 

1. More Choices

Opting for a two-wheeler loan can increase your affordability. You no longer have to compromise and can pick a sports bike over a regular bike. Similarly, with the loan amount, you can choose any model and brand.
 

1. Attractive Interest Rates

Bike loans range between 10% - 25%. The rates vary from lender to lender depending on the applicant’s annual income, credit score, and the bike’s market and resale value. Financial institutions give the option of fixed and floating types of the interest rate. In fact, in the last few years, interest rates have decreased because of stiff competition between lending institutions. Bike loans also have flexible tenures that vary between 12 and 60 months. The applicant can also opt for a longer duration to keep EMIs smaller.
 

1. Improve Your Credit Score

Taking a bike loan is a great way of improving your credit score. While a decent and regular income is more important than the credit score for lenders when offering bike loans to first-time applicants, the credit score is of great significance when it comes to loans involving a bigger sum such as a home loan or car loan. By paying the affordable two-wheeler loan EMIs on time, you can build a good credit history.
 

1. Flexible Loan Process

With the digital boom in the financial sector, loan approvals are also going online. The loans are sanctioned and disbursed within a day or two. One can find all the necessary information on the lender’s website and can submit the required documents online without visiting the lending institution’s office in person or standing in a queue.
 

1. Eligibility Across Income Groups

Owning a motorcycle is an aspiration that runs across different income brackets from a fresher to an established professional. That is why lenders offer bike loans even to those with annual income as low as Rs 96,000. Therefore, even if you are not earning handsomely, you are eligible for a bike loan.  
 

1. Additional Benefits

Many lenders have tie-ups with bike dealers that help the applicant in getting additional benefits such as no registration fees, free insurance cover, big cashback, heavy discounts, covering the cost of accessories or alternate seating options, among many others.

   Also Read: 7 Reasons Why Hero FinCorp Two-Wheeler Loan is Perfect for Your Hero Bike

Other Advantages of Two-wheeler Loan EMI

Apart from the key benefits outlined above, two-wheeler finance offers some more perks. Some of them are:
 

High Loan-to-Value (LTV) Ratio

 Whether you want to go for a ride on a sports bike or stick to your regular commute route to work, a two-wheeler loan can help you with both. Lending institutions nowadays provide the best two-wheeler loan with a loan-to-value (LTV) as high as 95%. In terms of amount, you can avail of a loan for the maximum amount of Rs 1 lakh. So the loan amount is another advantage of purchasing a two-wheeler on an EMI. With a bike loan, you can easily fulfil your dream of purchasing either an expensive sports bike or a regular bike.
 

Festive Offers

Both two-wheeler dealers, as well as two-wheeler lenders, offer festive discounts during big festivals and holidays. During festivals, you may get offers such as zero down payment two-wheeler loan, and a major discount on two-wheeler loan interest rates, among others.
 

High Resale Value

When it comes to resale value, two-wheelers outperform other vehicles such as cars. Even if you sell your bike after two years of use, you would still get a good price. So, even if you borrow funds from a lender to buy a bike, you may sell it for a profit, pay off your debt, and borrow funds to buy another brand new bike.

Also Read: Factors to Consider When Comparing Two-Wheeler Loans
 

Personal Loan vs. Bike loan: What to Choose?

The only advantage of taking a personal loan is buying a bike without a down payment. Two-wheeler loans, on the other hand, are far superior in terms of interest rates, loan terms and conditions, and more.  

How to Avail of a Two-wheeler Loan?

• The process starts once you have narrowed down on the bike of your choice.
• After this, the buyer generally evaluates the available options being offered by different lenders in the market.
• Once the lender is decided, the buyer will approach the lender to apply for a loan.
• On receipt, the lender will evaluate the application and check the eligibility. If eligible, the applicant gets an offer from the lender
• Post that there will be a verification and documentation process where you would need to submit age and residence proof, salary statements if you are a salaried employee or bank statements in case you are a business owner or freelancer. If all documents are correct, the loan is disbursed in no time.

Be it utility, affordability, fuel efficiency, or durability, two-wheelers are quite popular for several reasons. The two-wheeler industry is expanding and to cater to the growing potential buyer base, financial intuitions are offering loans at easy terms and conditions. Though loans are seen as a liability, bike loans have several advantages as explained above and help to fulfil everyone’s dream.
 
Disclaimer: This post was first published on 31 May 2019 and has been updated for the latest information, freshness, and accuracy.