Refinance Bike Loan – Unlock Better Terms for Your Two-Wheeler
Amit took a bike loan when he was just starting work. The interest rate and EMI were then manageable. However, over the past 2 years, his earnings have increased, yet his EMI has remained the same. He is now paying more than he probably needs to.
This is where refinancing a bike loan can help. With two wheeler refinance, you can change your current loan to a new one with more favourable conditions, including a lower interest rate or more comfortable EMI.
What is Two Wheeler Refinance?
Two wheeler refinance, also known as refinance bike loan or refinance two-wheeler loan, is simply changing your current bike loan to a new one with new terms. You switch to a more suitable payment plan that aligns with your current income and credit status.
Benefits Of Bike Loan Refinance
Refinancing your bike loan can have practical advantages when done at the right time.
1. Lower interest rates
The refinancing can be subject to lower interest rates if the credit profile has improved since the initial loan was taken.
2. Reduced EMIs
Two-wheeler refinancing can lower monthly outflows by adjusting the interest rate or extending the tenure.
3. Flexible tenure options
The repayment period may be varied to suit existing comfort levels. For example, a shorter tenure of 12 months may increase the EMI but reduce overall interest paid.
How Bike Loan Refinance Works
Here is how a refinance bike loan typically works:
Step 1: Check your eligibility
Review your income, credit history and EMI repayment history to know what type of terms you can qualify for.
Step 2: Apply for refinancing
Get a two-wheeler refinance using the application, providing details of your current loan and outstanding balance.
Step 3: Evaluation and offer
Your profile and two-wheeler details are evaluated, and new loan terms are provided based on your eligibility and the bike's condition.
Step 4: Close your existing loan
Once approved, the outstanding amount on your current bike loan is settled with your existing lender.
Step 5: Start repayment under new terms
Begin repaying a new loan with revised EMI and tenure rates to be more comfortable with your current financial situation.
Eligibility Criteria For Bike Loan Refinance
Eligibility for two-wheeler refinance depends on both your profile and your current loan.
1. Credit score
A credit score of around 725 or above improves your chances of getting better terms, while lower credit scores can increase interest rates and stricter conditions.
2. Income stability
You should also have steady earnings of at least 6 to 12 months of continuity in your present occupation or business.
3. Bike age and condition
The majority of lenders will prefer two-wheelers that are 3 to 5 years old or less and have sufficient usable life at the time of refinancing.
4. Repayment history
An EMI record that is also clean over the past 6 to 12 months is an added boost to your eligibility, whereas any recent delays may restrict the number of choices you have.
Documents Required For Bike Loan Refinance
You may be asked to provide:
1. Identity and address proof
You may submit Aadhaar, PAN, Voter ID or Passport to authenticate yourself and your current residential address.
2. Existing loan statement
This indicates that you have a good balance and repayment record, which is necessary to finalise your bike loan during refinancing.
3. Two-wheeler registration details
Your RC book or smart card is used to verify ownership and confirm your bike's age.
4. Income proof
You might be required to provide your recent salary slips and bank statements if you are salaried, or simple income documents and bank statements if you are self-employed.
How To Apply For Bike Loan Refinance With Hero FinCorp
Step 1: Apply online
Start the refinance bike loan application by sharing basic details and existing loan information.
Step 2: Submit documents
Provide required KYC, income details, and current loan information.
Step 3: Get evaluated
The profile and bike details are reviewed, and revised terms are shared if eligible.
Step 4: Track status
Track the application digitally until the refinance process is completed.
If you want to explore options first, you can check your eligibility for a personal loan through Hero FinCorp’s personal loan app.
Factors to Consider Before Refinancing Your Bike Loan
Consider before deciding between bike loan refinance, or two wheeler refinance:
1. Total cost comparison
Compare the remaining interest on the existing bike loan with the overall cost under the new terms to determine whether refinancing will actually result in savings.
2. Foreclosure and processing charges
Add in any foreclosure fees on the current loan and new processing fees on the new loan, these may lower the total value of a refinance.
3. Remaining tenure
Refinancing works best when a meaningful portion of the loan tenure remains, as potential savings are higher earlier in the loan cycle.
Ready to Refinance
Refinancing your bike's loan can be really simple if you follow the right steps and have the necessary documents at hand. Loan EMIs don't have to be that difficult. Check out Hero FinCorp for a hassle-free process today!
Frequently Asked Questions
Can you refinance your bike loan repeatedly?
You may, but frequent refinancing is not a good idea unless it offers an obvious advantage.
How much can you save by refinancing?
Savings depend on rates, remaining tenure, and fees involved.
Does refinancing affect your credit score?
A small temporary dip may result from a credit enquiry.
How long does the refinancing process take?
Timelines are based on documentation and verification.
Can you refinance an old bike loan?
Eligibility is based on the bike's remaining usable life and your profile.
Disclaimer: The information provided in this blog post is intended for informational purposes only. The content is based on research and opinions available at the time of writing. While we strive to ensure accuracy, we do not claim to be exhaustive or definitive. Readers are advised to independently verify any details mentioned here, such as specifications, features, and availability, before making any decisions. Hero FinCorp does not take responsibility for any discrepancies, inaccuracies, or changes that may occur after the publication of this blog. The choice to rely on the information presented herein is at the reader's discretion, and we recommend consulting official sources and experts for the most up-to-date and accurate information about the featured products.