Bringing home the ride of your choice has now become easier than ever with several financial institutions extending a two-wheeler loan at low-interest rates. This enables you to pay for your two-wheeler in monthly installments in the form of easy EMIs. What’s more attractive is that you can choose the tenure of your loan as well as pin the amount you wish to pay monthly. So, if applying for a two wheeler loan is buzzing through your mind, then here is everything you need to know before applying.
How to Get a Two-Wheeler Loan?
Getting approved for a two-wheeler loan is fairly easy, but there are a few things that you need to cross-check before submitting your application. Also, the terms and conditions differ for each institution, so spare some time on your research to find the lender that’s offering the best deal!
How to get a two-wheeler loan?
- Decide Your Budget
The first step towards starting your two-wheeler financing journey is choosing the model you wish to buy and deciding on the budget. Though the EMI on a two-wheeler loan looks like a small price to pay, consider the interest you are paying and the tenure of the loan. The greater these two are, the more interest you would be paying. Today, you can secure 100% of the bike’s value as a loan, making it easier for you to own a bike even if you cannot afford to make the initial down payment. But do note that you will be paying a lump sum to the banking institution as an interest.
Also, make a list of all your significant expenditures, investments, and other financial obligations that you might be having in the coming years.. This will help you fit the EMI into your monthly budget!
- Choose Your Ideal Bike:
When you visit any dealer of two-wheelers, they would overwhelm you with options. Also, make sure to visit at least 2 to 3 dealers in your area to better understand your options. Analyse the vehicles properly against your needs and pick the one that best serves the purpose.
Also, most of the dealers have tie-ups with financing institutions which makes your two-wheeler loan application process very easy. However, do check out which institution they are partnering with and what are the interest rates and terms and conditions of the loan.
- Research on Lenders
Nowadays, numerous lending institutions provide two-wheeler loans at easy EMIs. The interest rate and offers provided by these lenders vary widely from one another. Before finalising the financial institution, take a pen and paper and note down the offers provided by different lenders.
You can also use Google to find the websites of several loan aggregators, where you can find a table of comparisons. Also, check the loan disbursement time and various charges associated with the two-wheeler financing. TVS Apache RTR 160 4V is available with no-cost EMI, that means will pay only the price of the bike with no interest in the form of monthly EMIs.
- Check the Eligibility Criteria
When applying for bike finance, bear in mind that different financial institutions have different qualifying standards for a two-wheeler loan. The minimum age factor, income requirement, and occupation status differ slightly with each lender.
In a two-wheeler loan, the lender does not have any strict eligibility requirements. To get an idea about the two-wheeler loan eligibility, below are some of the common essential requirements for a two-wheeler loan.
Two-wheeler loan is available only to Indian citizens.
Individuals above the age of 18 can apply for a two-wheeler loan. The maximum age limit in most cases is 65 years at the time of loan maturity. This may vary across different lending institutions.
- Job Experience
If you are into a job on a salary basis, then the minimum job experience of one year and six months of experience in your current job is mandatory to apply for a two-wheeler loan.
- Business Experience
If you own a business, then a minimum business experience of one year is mandatory to apply for a loan.
- Maximum Loan Amount
You can apply for this loan for an amount ranging from Rs 10,000 to Rs. 1,00,000. However, this can differ from institution to institution.
- LTV Ratio
A two-wheeler loan is available for an LTV of up to 95%. It means, you just have to pay a down payment of 5% of the bike’s value from your wallet. Some institutions may also offer a 100% loan, but do your assessments before applying for a 100% loan.
- CIBIL Score
You should have a good CIBIL score with credit bureaus to secure a two-wheeler loan. A low CIBIL score, below 700, reflects your inconsistencies in repayment and increases your chances of loan rejection.
- Check the Essential Documents
When sanctioning your two-wheeler loan, the lender asks for several documents. The documentation process helps lenders in the risk profiling of a borrower. Below is the list of documents that you will need to get instant bike loan approval.
- Application Form:
It must be duly filled and signed by the borrower.
- Identity Proof:
Passport/ PAN Card/ Voter ID Card/ Driving License/ Aadhar Card
- Address Proof:
Passport/ Driving Licence/ Aadhar Card/ Utility Bill/ Voter ID Card/ Bank Passbook/ Municipal Tax Receipt/ House Registration Paper
- Income Proof:
Latest Income Tax Returns (ITR)/ Last Six Months Bank Account Statement/ Salary Slip or Certificate
- Passport Size Photograph
- Visit Lender
If you have decided on a financial institution, now is the time to raise your two-wheeler loan request. To apply for this loan, visit your preferred lending institution’s branch or outlet, or make an online application through the lending institution’s website.
For smooth financing experience, financial institutions have also deployed their representatives at the two-wheeler dealerships. By connecting with the lender’s representative at the dealership showroom, you may get an instant two-wheeler loan approval.
- Loan Amount
Before signing any loan agreement, you must read the fine lines. Check whether the loan amount you have been provided is sufficient to meet the cost of your two-wheeler. Also, make certain that the interest rate on your two-wheeler loan does not surpass your budget.
Always remember, never go for overborrowing due to pre-approved loan offers.
- Sign the Agreement:
Once you are satisfied with the two-wheeler loan terms and conditions, accept the offer and sign the loan agreement.
Following your acceptance, the lending institution will disburse the funds to the bike dealer’s account. After the disbursement, ask for keys and ride your dream bike home.
Final Words on Financing
Getting an instant loan for a two-wheeler is much easier today. But you need to be very careful and calculative while picking the loan that’s tailor-made to meet your needs. If you don’t consider the important parameters and just see the monthly EMI amount, then there is a fair chance that you would end up paying double the amount of your two-wheeler as loan interest.
So, take your time, do your research and ride home a new two-wheeler!