Not everyone can afford to own a bike or scooter. Some may be unsure if a two-wheeler suits their needs, while others may lack the funds to purchase one outright, and saving up can be time-consuming and challenging. For these reasons, a two-wheeler or Bike Loan is worth considering, as it can help you purchase the bike or scooter you desire. Bike Loans are an excellent way to finance your dream ride, but there are a few key factors to consider before taking out a loan. Let's discuss these crucial factors in detail.
Opting for a Bike Loan: Things You Must Check
When you have planned to get a scooter or Bike Loan, you must check or consider the pointers listed below:
Eligibility Criteria and the Budget
You have to decide how much you can borrow before you want to take out a bike or Two-Wheeler Loan. After assessing your monthly profit, savings, and costs, you should decide how much you can easily refund each month.
In addition, you want to review the requirements for qualifying for the bike or Two-Wheeler Loan. To find out if you are fit for the loan, you must evaluate the many standards that each bank has. Banks, like ICICI Bank, have age limits that require an applicant to be older than 21 to be suitable for a Two-Wheeler Loan.
Loan Repayment Duration
You should check the loan repayment duration and then see which of the lenders out there will provide you with the loan term you want. It’s suggested you don’t take the long repayment duration you need. If the repayment duration is much longer, you might have to pay more interest.
Floating or Fixed Rate
Under the fixed rate, you have to pay an interest rate pre-decided during the loan duration. You will know about the overall interest amount you have to pay before you start paying it.
However, under the floating rate, the bike interest rate will differ significantly according to the repo rate and various other facets, which can influence the lender. When the interest rates reduce during the loan duration, you will benefit greatly, especially when you have opted for the fixed and floating interest rates.
Documents to Submit
To ensure you successfully get the Two-Wheeler Loan you need, you should go through all the documents you must submit. Providing all the important documents will prevent unwanted delays from taking place. In general, you must submit the following documents for the loan: a driver's license, Aadhaar card, PAN card, passport, bank statement, salary slip, and over 2 passport-sized photographs.
The Loan Disbursal Time
When disbursing the bike or Two-Wheeler Loan, it can take 7 days to acquire the funds once a person applies for it. However, you should begin with the loan process a bit early. Doing so will help you get the loan on time and then purchase the two-wheeler without experiencing any problems.
Check the Credit Score
Every person's credit score is unique and serves as a gauge of their creditworthiness. It significantly affects the loan conditions and interest rates for which they qualify. A credit score of at least 700 points will qualify you for motorcycle financing with the best terms and lowest interest rates. Nonetheless, obtaining a loan may be challenging if your CIBIL score is lower than 700. Therefore, check your credit report just before applying for two-wheeler financing, and if it's a little low, find strategies to raise it.
Loan Processing Charges
Many financial institutions and banks charge a small fee for the loan amount they provide. However, all these charges might increase the loan cost. Because of such reasons, you should talk with your bank about whether or not to take up the processing fee for the Two-Wheeler Loan they offer. Some banks charge you a fee when you want an instant disbursal of the loan amount. To complete the instant disbursal, you should determine whether you meet all the eligibility criteria.
The Down Payment Needed
Down payments are the sums people pay in advance when they take out a loan to buy a two-wheeler. For bikes or Two-Wheeler Loans, the required initial deposit varies from 10% to 40% of the total loan sum.
Moreover, a person's CIBIL score is considered when determining the down payment. When you have additional funds, you don’t think twice about paying a much higher down payment. This is because you will get the chance to pay much less interest during the repayment period.
Reducing and Flat Rate
You must check the flat and reduce rates with all the Bike Loans you encounter. For the flat rate, interest is charged based on the principal amount during the entire loan duration.
This means that until the final installment, you must pay interest based on the overall amount. But when it comes to the reduced rate, you will get to pay interest on the amount you have yet to pay. In other words, the interest cost will keep reducing with every loan installment.
- Personal Loans
If your preferences do not align with a Bike Loan, you can opt for an Instant Personal Loan. These loans accompany features like quick disbursal and swift approval compared to all the other vehicle or Two-Wheeler Loans. The loans don't come with any collateral requirements, so you can conveniently opt for such loans to purchase a new bike or a scooter for yourself.
Conclusion
Bike or Two-Wheeler Loans are ideal for individuals who do not have the proper funds to purchase a bike or a scooter. You can easily get such loans from any reputed loan provider or bank, but inspect some crucial things like disbursal time, loan tenure, and various other things before applying for the loan. That way, you will get to obtain a two-wheeler of your choice and repay the loan on time.