A Guide into Two-Wheeler loan eligibility, from getting the loan, to managing finances. Keep reading the article to know more.
Owning a bike or a two-wheeler gives a sense of freedom to many. It offers independence to move around and enjoy the most of your time. The demand for loans and the variety of options to get a loan has made buying necessary goods easy and accessible. It is now easier to own your dream bike, and with various loan options available, it helps you get it home.
A bike loan is a thoughtful approach to buying a bike of your choice. It allows you to repay the loan at affordable EMIs every month. You would reduce the burden of paying a massive amount at one go. Bike loans are pocket-friendly and allow you to shop a bike at one road price.
The Advantages of Taking a Two-Wheeler Loan-
Applying for a two-wheeler loan has many benefits, some of which are discussed below-
- Decreases Burden – Taking a two-wheeler loan reduces your burden of having to pay for the vehicle in total amount, reducing your financial dilemma. With fixed interest rates, you can plan out your repayment process and finish your debt without facing a financial crunch.
- Easily Approved Funds- Getting approval for a two-wheeler has become an easy and stress-free process if you are eligible (You can read about the eligibility criteria below).
You can also check out Buddy Loan; the loan aggregator has an 80% approval rate on personal loan requests. You could avail of a bike loan through the Buddy Loan. Personal loans for bikes are popular and common today.
Increase In CIBIL Score
A two-wheeler loan is not a huge amount of money; getting a loan approval requires a good credit score. Since the cost of two-wheelers is easy to pay off, it helps build a good credit score.
Minimum Time For Approval-
A loan these days requires minimal paperwork, and the process and speed of the application are also straightforward and fast. If you have all valid documents, your loan will be approved and be in your account in no time at all.
Attractive Interest Rates-
Two wheeler loans have flexible interest rate options; borrowers can usually choose from various interest loans. Buddy Loan, the best loan aggregator in the industry, has an 80% approval rate on personal loan You could avail of a bike loan through the app. Personal loans for bike are popular today.The best way to find your competitive interest rate is to research. At Buddy Loan, the interest rates are low, starting at 11.99% p.a.
Documents Required for a Two-Wheeler Loan
There are a few documents that are required for a two-wheeler loan. It may change from one bank to another but here are some general documents that are required-
KYC Documents
- Identity Proof – Driving license, Passport, Voters id, Aadhar card, PAN card.
- Address Proof – Rental agreement, Electricity, water bills, Passport.
- Age Proof- PAN card, Aadhar Card.
- Income Proof- Salary slips, Bank statements, Salary certificates, and Income tax returns.
Also Read: Can I Avail an Aadhaar Card Loan to Purchase a Two-Wheeler?
Two Wheeler Loan Eligibility Criteria
Two-Wheeler Loan And Its Eligibility Criteria:
Every financial institution has its own eligibility criteria. It can be different based on interest rates, changes in EMI offered or a change in the processing fee. There are some basic criteria that are general, i.e.-
| Minimum age limit | 21 Years |
| Maximum Age Limit | 75 Years. |
| Employment Status | Salaried/Non-salaried. |
| Minimum Income Required | Depends on the Bank. |
| Maximum Loan Amount | Depends on the Bank. |
| Maximum Repayment Tenure | 7 years. |
| Interest Rate | Depends on the Bank. |
| Credit Score | A score above 750 |
Key Factors for the Best Two-Wheeler Loan
The first block of understanding the advantages of getting a two-wheeler loan is one, after which your challenge now would be to understand the factors that you should consider while getting a two-wheeler loan-
The Loan Amount
Confirming that you are eligible for a bike loan, you have to decide on the amount that you want to take, depending on the model of the bike. Add something here
EMI
EMI(Equated Monthly Instalments) is the amount you would pay the bank every month with interest. EMI is determined by several factors, from the tenure of your loan, your repayment capability
Processing Fee
A one-time amount that you would be paying to the lender for processing your loan application. The number of processing fees you get can impact the total amount of the loan. Even with a low-interest rate, the processing fee will increase your costs. Make an informed decision and choose a lender that provides less processing fee.
Eligibility Criteria
As discussed above in this article, it is important to know you pass the bike loan eligibility scale. A 2-wheeler loan eligibility can differ depending on different banks’ policies and schemes. You can find a few popular banks’ eligibility criteria for, i.e., HDFC bike loan eligibility and Canara bank two-wheeler loan eligibility.
Prepayment Charges
If, at some point in time, you feel like you want to pay your loan early. Prepaying your loan can save you money and interest. There are some lenders who will charge some extra fees. It’s always good to know these charges and make an informed decision.
Time of Loan Disbursal
This is the time the lender takes to provide you with the money from the time you apply for it. Find out how various long lenders take to sanction and disburse your loan. This will be useful if you need a loan quickly to buy your bike.
Miscellaneous
Other factors such as good customer service for your query, keeping in check of any discounts or special offers. Overall be sure to read the terms and conditions and all the documents properly so there are no hidden charges that you may be levied.
Calculate Two-Wheeler Loan EMI
A very helpful tool on the internet is the two-wheeler loan EMI calculator. Before deciding whether to buy the two-wheeler of your choice outright, use the calculator to evaluate the interest rates and EMIs offered by several financial institutions.
Importance of Comparing Interest Rates Before Applying For a Loan
Comparing different interest rates will give you an idea of various rates that exist in the market, and you can choose to work on
Interest Rates For Few Banks
| Bank/ Financial Institution | Interest Rate | Loan Amount |
| State Bank of India (SBI) | Starting at 8.40%p.a. | Min – 20,000/-
Max – 3,00,000/- |
| HDFC Bank | Starting at 14.5%p.a. | As per the bank |
| Axis Bank | 9.50% – 25% p.a. | As per the bank |
| Punjab National Bank | Starting at 9.50% | Min – As per Bank
Max – 10,00,000 |
| Canara Bank | 10.95%p.a.-15.80%p.a. | As per bank |
| Union Bank of India | Starting at 10.80%p.a. | Up to 10,00,000 |
Having a Good Repayment Plan
Taking out a loan is not the final process of acquiring your bike; in 2019, 4.13% who took out a loan defaulted on their payment. Defaulting in EMI payments can lead to a massive increase in penalty payments. Default in payment can also bring your credit down. Planning and Precautions can be taken to ensure repayment of your EMI
Picking an EMI that Matches Your Repayment Capacity
The repayment capacity of individuals are different based on several adjoining situations. There are several ways one can choose a payment plan that suits their life. I.e.-
- A down payment with minimum pay will increase your loan value, but you can have a longer repayment time period.
- Choosing an EMI with a minimum number of payments will reduce the time period, but the amount to be paid in EMI will be higher.
- Choosing an EMI with an amount will increase the down payment, tenure or both.
You have to choose a plan that does not override your spending yet lets you go by comfortably.
Choosing an Auto Payment Mode
This method of payment will help you deduct your EMIs on time, i.e. it will get automatically deducted from your account. Even if you get busy or forget to pay your loan, you would not have to worry about missing out on the payment or about penalties or default payments.
Following a 50/30/20 rule for Budgeting
This rule is about creating a budgeting plan that helps you save as well as helps you pay off your EMI. As per this rule, a person should spend 50% of his income on basic necessities, 20% on savings and 30% on desires.
Using Extra Money to Pay Loan
You can occasionally receive money unexpectedly while repaying your bike loan; this could happen if a fixed deposit matures or if your employer gives you a bonus or award. Instead of using these extra funds to indulge in a shopping spree, you may use them to pay off the bike loan.
Increase Your Eligibility for a Two-Wheeler
It is best to get a lower interest rate whenever you apply for a loan., there are certain things you can do to help you ge a lower interest rate, like-
Negotiate-
Talking with your lender can sometimes get you better rates. If you are with the financial institution for a long time and have a good bond, they might help you out on your terms.
Getting a Loan From an Existing Lender-
If you already have loans that you have taken from a financial institution, taking a bike loan from them could give you a better option for EMI and Interest rates and help you negotiate your needs better.
Aiming To Reduce Current Debt-
Keeping a check on your debt-to-income ratio will help you determine how much money is going into repaying loans. The lower the ratio of money used, the higher the chances of getting a loan.
Improving Credit Score-
A good credit score is a good way to determine how likely you are to pay back your debt and, more importantly, if you pay on time. If you don’t have a good credit score, you can look at ways to improve it.
Also Read: What is the maximum amount I can get as a two-wheeler loan?
Key Takeaways
It is easier to get bike loans than ever now. As long as you meet the requirements, you will be given a loan. Researching, understanding and reading all the terms and conditions before applying for a loan and picking the one that suits you will help you build a good relationship with your finances and help you get a good credit score.
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Frequently Asked Questions
A. A two-wheeler loan helps you buy a scooter or motorcycle of your choice. Two-wheeler loans are available both for working professionals and self-employed individuals. You can repay the loan amount in Easy Monthly Instalments (EMIs).
Q. How Long Does it Take To Get a Two-Wheeler Loan?
A. The time frame for getting a loan changes from different places, but with everything going online, many loans are sanctioned within 72 hours. In some cases, it might exceed or go beyond a day.
Q. What is the Minimum Credit Score Required To Get a Two-Wheeler Loan?
A. The credit score required would change from different institutions. For a hassle-free process, it is advisable to keep a credit score of 720 or above.
Q. What is Bike Loan Eligibility?
A. Bike loan eligibility is the factor that makes you a viable candidate to get any loan from a bank.
A. To apply for a Two-wheeler loan, you can open the Buddy loan app or download the Buddy Loan app from the play store and get all the information you need for taking a two-wheeler loan.
