In a country like India with maddening traffic, two-wheelers are a hot favourite among the public. Its low maintenance cost, fuel efficiency, and better resale value make it a pocket-friendly choice for the rider. The market for two-wheeler continues to expand with the introduction of new bikes with better features, designs, and capacity. However, buying a bike in one go by spending all your savings may not be a smart option for you. So, what should one do? This is where two-wheeler loans come to play. Available at reasonable interest rates, these loans through their flexible and convenient process are empowering people to ride their dream bike home.
A scooter or bike usually falls in the price range of INR 40,000 – INR 1,00,000 depending on the features. But a young salaried person may not have the 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, the customer must terminate the hypothecation bond and submit the necessary documents to the RTO to close your two-wheeler loan.
How Two-Wheeler Loans Make Your Life Easy?
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 realizing. 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 like life insurance, home rents, medical bills, etc. and even for some investments.
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.
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 the fixed and floating types of the interest rate. In fact, in the last few years, the interest rates have decreased because of stiff competition between lending institutions. Bike loans also have flexible tenures that vary between 12 to 60 months. The applicant can also opt for a longer duration to keep EMIs smaller.
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 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 like a home loan or car loan. By paying the affordable two-wheeler loan EMIs on time, you can build a good credit history.
Flexible loan process:
With digital boom in financial sector, loan approvals too 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 standing in a queue.
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 INR 96,000. Therefore, even if you are not earning handsomely, you are eligible for a bike loan.
Many lenders have tie-ups with bike dealers that help the applicant in getting additional benefits like no registration fees, free insurance cover, big cashbacks, heavy discounts, covering the cost of accessories or alternate seating options, among many others.
How to avail 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 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, etc. 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.