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 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 it. 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.
- More Choices
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.
- Improve Your Credit Score
Taking a two-wheeler 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 the digital boom in the financial sector, loan approvals 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.
- Additional Benefits
Many lenders have tie-ups with bike dealers that help the applicant in getting additional benefits like no registration fees, free insurance cover, big cashback, heavy discounts, covering the cost of accessories or alternate seating options, among many others.
- Low Processing Fee
Two-wheeler loans are a competitive segment, and as a consumer, you have to choose from the best deals available in the market. You can negotiate processing fees as well as the rate of interest by doing a thorough research online and comparing the benefits.
- Minimal Documentation and Quick Approval
Unlike other loans, two-wheeler loans are relatively easy to acquire as they require simple documentation and processing is much faster.
- Smaller Tenure for Repayment
In some cases, partial foreclosure is permitted for bike loans allowing you to shorten the loan tenure. Also, when you apply for a bike loan, you can select a tenure from 1-3 years.
- 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 fixed and floating types of interest rates. In fact, in the last few years, the two wheeler interest rate have decreased because of stiff competition between lending institutions. Two-wheeler 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.