FREQUENTLY ASKED QUESTIONS(FAQs) ABOUT TWO WHEELER LOAN

Introduction
 

The decision to buy a bike via loan cannot be taken in a jiffy. One needs to know the process well before applying for a loan. But it has been seen that most applicants have some common questions and so, here we have tried to answer some of them about a two-wheeler loan.

1. Who can avail a two-wheeler loan from Hero FinCorp Finance?

Individuals like a salaried employee or self-employed professional and institutions like firms, trusts or private and public limited companies can avail a two-wheeler loan.

1. Is there some eligibility criteria for applying for a two-wheeler loan?

Any Indian national who is above 18 years of age is eligible for a two-wheeler loan given he/she has a stable source of income. So, if you have been a salaried employee for minimum one year with at least six months at your current job or if you are a self-employed professional who has been running the business for over one year, you can apply for the loan.

1. What are the loan rates?

There is no fixed figure but the bracket is regulated by government policies. It can differ from one applicant to another, courtesy the discounts offered by manufacturers and dealers. Also, people with better credentials to repay the loan are given better rates. You can always negotiate the loan rate with the lender.

1. What is the range of the loan tenure?

Hero FinCorp offers flexible tenures up to 48 months. The borrower can choose any tenure from one year to four years according to his income and monthly budget.

1. Can one take a loan for any two-wheeler in the market?

Yes. From a 150 cc scooter to 500 cc bike, you can buy any two-wheeler from the market with the help of a bike loan. However, the EMIs will be significantly different. Also, some lenders have a big list of bikes for which they sanction loans. So, it’s advisable to ask once.

1. How much loan can be taken?

One can borrow up to 95% of the on-road price of the vehicle. However, how much you can finally avail will depend on your credit score and eligibility.

1. How will the interest be calculated?

The interest is calculated on a monthly reducing balance basis. It is a method where the interest paid every month reduces a part of the principal amount. The interest for the next month is calculated on the basis of the reduced/outstanding principal.

1. Will I have to pay any additional charges?

Lenders usually charge a nominal processing and documentation fee and an applicable stamp duty. There is also a fee that needs to be paid for prepayments.

1. What is the process of applying for a loan?

Thanks to technological advancements, things have become extremely simple. Every lender has a website. Visit that website and just fill a simple application online to start your loan application process. Post that either you would be requested to visit the two-wheeler dealership or the bank or meet the representative there or the representative will get in touch with you shortly after your application.

1. What are the stages of taking a loan?

Once you have applied for a loan, the lender will check your eligibility and credit history. If you are eligible, the processing part will begin, which will include discussions regarding the loan amount, interest rate, loan tenure, explanation of additional charges and fines. If both parties are on the same page, the documentation part will take place before the financial institution transfers the money to your account. So, the stages involved are – Application, Processing of the loan, Documentation, and Disbursement.

1. What documents will I require for applying?

You need to submit all the KYC documents like identity and address proofs. You also need to submit your income proofs like salary slips in case you are a salaried employee and bank statements in case of business owners. Also, keep some passport size photographs in hand.

1. Does this loan need a security or collateral?

Because two-wheeler loans are secured loans, there is no need of a collateral. The bike itself acts as a collateral i.e. till the loan is not fully repaid, the vehicle will be hypothecated to the lender.

1. Do you provide insurance for the vehicle?

Yes. The Insurance facility is provided through tie-ups with insurance companies.

1. How long does it take to get the loan?

Disbursal of the loan amount usually happens within a week from the date of completion of documentation.

1. How do I make the payments for the loan?

EMIs are paid in the form of PDC’s (Post Dated Cheques) and through Electronic Clearing Service (ECS).

1. Can I pre-pay the loan?

In accordance with the foreclosure terms mentioned in the loan agreement, the borrower can pre-pay the loan but is most likely to pay a fee for that.

1. Will I be able to see my instalment statements online?

Yes. Lenders regularly update the details.

It is important to know more about a process before you get involved in it. These FAQs help in dispelling the common doubts about the process and one must get their doubts cleared before buying a bike via loans.