Using a Two-Wheeler Loan to buy your dream bike is a smart financial move if you don't have the total amount upfront. A Two-Wheeler Loan spreads out the cost of the bike over time. It offers manageable monthly payments with relatively low interest rates. This guide will help you navigate the process of using a Two-Wheeler Loan to fulfil your dream bike -
Decide on the bike model
Identify the model and variant of the bike you want to buy. Research its price, features, and total on-road cost, which includes taxes, Insurance, registration, etc. Based on the price of the bike and your down payment, determine how much Loan you need.
Eligibility
You should be 18 years old to apply for a Two-Wheeler Loan. You also need to be an Indian resident, with a stable residential address. If you are a salaried employee applying for the Loan you should have work experience of 1 year while applying for the Two-Wheeler Loan.
Find the best Loan offer
Different banks and financial institutions offer varying terms for a Two-Wheeler Loan. Interest rates on Two-Wheeler Loans range from 22% to 28% per annum. Choose a Two-Wheeler Loan tenure that aligns with your budget. Most lenders offer tenures between 12-36 months. A longer tenure will reduce monthly payments, but it may increase the total interest paid over the life of the Loan.
Evaluate Loan terms
Lenders typically approve Loans quickly after reviewing your application and documents. Review the agreement carefully, ensuring the Loan amount, tenure, interest rate, and monthly EMIs are as per your expectations. Use an EMI calculator to check your EMI amount. Ensure that the EMI fits your budget and doesn't strain you financially.
Processing fee
Most Two-Wheeler Finance Loans have a processing fee of up to 3% of the Loan amount. Lenders have to review applications, verify your documents, check your credit score, and evaluate risk before approving Loans. The processing fee helps to cover these additional costs.
Finalise the Loan
Carefully review the Two-Wheeler Loan terms before signing and pay the agreed-upon down payment amount. The Loan amount will be disbursed by the lender. Once all paperwork is completed, the dealership will finalise your purchase and deliver the bike.
Loan payments
Once the 2-Wheeler Loan is disbursed, you are responsible for making regular EMI payments. Enable automatic payments or reminders to ensure that you don't miss any due dates. Timely EMI payments will help you maintain your credit score. Many lenders offer the option of prepayment or foreclosure of Loans. However, you will have to pay foreclosure charges of 3% of the outstanding Loan amount.
Conclusion
A Two-Wheeler Loan is a practical way to buy your dream bike, especially if you don't have the full funds upfront. Understand your financial situation, compare Loan offers and manage your monthly payments. You can take joy in riding your dream bike at the right time while managing the Loan responsibly.
