Here’s What You Must Know Before Applying a Loan for Two-Wheeler
When seeking to make a specific expenditure of high value, no funding option can be as suitable as a dedicated loan designed for the purpose. It is the same with two-wheeler purchases as well. Buying a two-wheeler involves lump sum expenditure, which can be easily met with a dedicated loan for two-wheeler. However, with so many options, terms and conditions, it is very crucial for you to understand all the aspects of a loan, before you sign those papers.
Two-wheeler loans are available for all makes and models, which gives you the freedom to choose a vehicle of your choice. It also eliminates your worries regarding funding and budget as you get the option to repay the loan availed in easy EMIs. Apart from this, there are several other advantages of availing a two-wheeler loan.
Here’s an in-depth look at everything you would need before applying a loan for two-wheeler.
Types of Bike Loans Available
Primarily, there are two types of bike loans that you can avail to fund the purchase of your desired two-wheeler model. They include the following.
- Traditional bike loans
These are conventional funding options that lenders provide against the vehicle as a collateral. The financing amount depends on the current market price of your two wheeler and is capped by the loan to value ratio of LTV that the lender determines based on various risk factors.
So, if you are availing a traditional bike loan to purchase a bike of Rs.1 Lakh and the LTV is 80%, you would be eligible for a maximum financing value of up to Rs.80,000 only. The buyer needs to meet the remaining cost of Rs.20,000 as down payment which must be made before availing the advance to establish vehicle purchasing intent.
- Bike loans with zero down payment
This is an improved version of traditional bike loans that makes financing more convenient than ever. This model of loan is popularly known as loan for two wheelers with zero down payment or 100% bike finance.
Under this financial arrangement, an aspiring bike owner can avail 100% of the bike’s market price as a loan. This means, you would not need to make any down payment towards the purchase, which would make the purchase more convenient and financial-friendly. However, you must hold high eligibility to avail this type of funding without any hassle, as the 100% financing arrangement also exposes the lender to a higher risk of lending, which shall be compensated with higher eligibility of the borrower.
- What makes a Loan for Two-Wheeler suitable for you? High financing quantum: Lenders provide bike loans with high financing quantum, suitable to meet funding needs to easily purchase high-end bike models. The loan amount with reputed lenders can go up to Rs.10 Lakh.
- Loan tenure flexibility: Along with a high-value loan, you can be assured of receiving flexibility in choosing a suitable repayment tenure as well, which can go up to 5 years. To choose a suitable loan tenure for affordable repayments in easy EMIs, use dedicated financial tools like bike loan EMI calculator that can assist with convenient borrowing.
- High LTV: In the case of traditional bike loans where you need to make down payment to avail funding, the LTV for these secured loans is always high and can go up to 90% of the bike’s value. This means that you can easily secure maximum percentage of your chosen bike model’s price as funding.
- Option to choose between traditional bike loan and one with zero down payment: As already mentioned, bike loans are available as traditional secured financing as well as zero down payment bike loans. You can choose between these two as per your convenience of borrowing and your standing eligibility for the advance.
- Competitive rates of interest: Another top reason to avail a bike loan for vehicle purchase is that it attracts interest at competitive and affordable rates, which means you can avail funding at the lowest rates possible among secured advances. Choosing the right lender can further increase your chances of availing the loan at affordable rates of interest.
- Simple eligibility and documents requirements: A bike loan is a secured funding arrangement, and hence, lenders require you to meet only a handful of eligibility and documents to avail financing.
- Different options for repayment: You also get to choose among different options for convenient repayment of your loan for two-wheeler. Apart from the standard repayment option in EMIs, you can also go for part-prepayment and foreclosure of your loan account at any time before the tenure ends. The facility attracts charges at nominal rates.
Things to check before applying a loan for two-wheeler loan:
- Your credit score – Your credit score not only helps you check your eligibility for a loan, but a good credit score can reward you with a lower interest rate.
- Compare the interest rates – Different lenders offer the loan at different interest rates. Compare the interest rates and the schemes online before you apply.
- Eligibility Criteria – Every financial institution has different eligibility criteria. You can check them online and assess for yourself before reaching out to the branch.
- Loan process – Two-wheeler loan applications can be processed online in a few clicks, thus saving you the time and hassle of visiting the office.
- Loan tenure – Depending on the tenure that you choose to repay the loan, your EMI will vary. But the longer the tenure is, the more interest you would be paying.
Once you have closely considered the available features, it should be easy to finalise the financial institution and the loan option. Applying for a loan for two-wheeler is easier than ever today. You only need to visit the official website of your selected lender, fill up the application form available online, submit your application and wait for a call back!