Applying for a two-wheeler loan? Here is the complete guide
Loans by Team Drivio | 17th Jan 23
Planning to get a two-wheeler for your daily commute? Or maybe you want the vehicle for leisure travel? Regardless of the purpose, you might be wondering if it’s possible to get your new two-wheeler financed through a loan. Well, getting a two-wheeler loan likely won’t be too difficult as long as you don’t have a poor credit score.
With two-wheelers being one of the most convenient modes of transportation, it’s easy to see why they are so high in demand. However, not everyone can afford to purchase a two-wheeler at once, in a single payment. Getting a two-wheeler loan from a bank or an NBFC will help you get your dream bike instantly and pay for it in small, affordable instalments.
What’s your best financing option when buying a two-wheeler in India?
When purchasing a bike, it’s best to finance it by taking a loan from a bank or an NBFC. Here’s why these two are your best options – loans from banks and established NBFCs are very secure. Besides, you do not need to pledge any additional asset for collateral security when taking a two-wheeler loan as the vehicle serves the purpose.
Most bike showrooms out there have collaborated with various banks and other financial institutions for loans. This means you do not need to apply for the loan separately – you may directly get the bike on loan at the showroom. Securing a two-wheeler loan isn’t too complicated either, as the process involves minimal documentation. You may not even have to wait for loan approval as banks now offer pre-approved loans for their existing customers.
Now that still leaves us with a question – are two-wheeler loans affordable and cost-effective? Well, you may rest assured that they are. Firstly, you can get a two-wheeler loan at zero down payment and don’t have to worry about spending a lumpsum amount of money immediately. Two-wheeler loans are based on on-road prices and even cover registration and insurance. So, that takes care of other associated initial expenses too.
How can you benefit from taking a two-wheeler loan?
Not sure if it’s better to take a loan or save up for the two-wheeler? Well, let’s have a look at the benefits of taking a two-wheeler loan.
- It boosts your credit score
As you might know, your eligibility for various loans depends largely on your credit score. The higher your credit score, the bigger loans you can take. You can boost your credit score by paying off the EMIs of your two-wheeler loan on time. This, in turn, will allow you to take home loans and other bigger loans in the future.
- Eligibility is easy
You might be wondering how you’re supposed to boost your credit score through timely repayment of the loan if you need a good credit score for a loan in the first place. Well, two-wheeler loans come with easy eligibility criteria and are available to almost everyone. You can also apply for these loans along with a co-applicant to boost your eligibility.
- Flexible tenure
Most banks and NBFCs offer two-wheeler loan tenures of up to four years, and some even allow 5-year tenures. You may choose a suitable tenure duration based on your paying capacity to avoid financial stress. Also, reputed lenders offer multiple repayment options and you can even pre-close these loans.
- Instant purchase
Lastly, and most obviously, taking a two-wheeler loan will allow you to take possession of the vehicle immediately after the disbursal rather than having to wait for years to save up for it. Assuming it’s a zero-down payment loan, you don’t have to make a big payment right away. Check out your pre-approval offers with reputed banks and NBFSs. This will help you set your budget in a transparent way.
Things to remember while taking a two-wheeler loan
Availing a two-wheeler loan is easy and convenient, but there are a few points that one should keep in mind. These will help ensure a smooth experience and avoid sticky situations.
- Be careful when choosing the loan tenure. A longer tenure requires you to pay a greater interest, but it also breaks down the cost into smaller payments. Consider how much you can safely pay each month, keeping in mind that things may not always go as planned.
- Review your different financing options to find the best one. You should also check the lenders that the two-wheeler dealer has tie-ups with.
- Check the document requirements and make sure to furnish all the necessary ones while applying for the loan.
- When reviewing different banks and NBFCs, carry out in-depth research and consider the perks offered by each lender. Also, scrutinize the interest rates and go for a competitive deal.
- Build up your credit score as much as you can. It will make you a reliable borrower in the eyes of a lender and improve the odds of loan approval.
- Get two-wheeler insurance as soon as you purchase the vehicle. This will save you from financial stress in the unfortunate event of an accident.
- Don’t forget to go through the terms and conditions carefully when taking the loan.
Ultimately, taking a loan is a smart way to finance your new two-wheeler. You’ll have to be careful about choosing the right lender and loan tenure, but it should be fairly easy. Especially in today’s world, when you have numerous financial institutions offering loans, proper online research is crucial.