Applying for a two-wheeler? Follow these steps

The thought of owning a bike or two-wheeler crosses our mind at some point. This thought creeps in when one finds it tough to commute from home to office for too long. The uncertainty of public transport and lack of night services may lead you seeking a two-wheeler loan. The demand for bike loans is increasing by leaps and bounds across financial institutes and banks.

What makes a bike loan attractive is the competitive interest rates, attractive financing, and festive discounts.

What is a two-wheeler loan?

They are either secured or unsecured loans. If you opt for a secured loan, then you need to pledge a collateral. The interest rates are lower in this scenario than unsecured loans. If you go for unsecured 2-wheeler loans, you need to make 10-15 per cent down payment at the time of the availing the credit.

The exact process to apply for two-wheeler loan is as follows:

• Submit essential KYC documents such as identity proofs, address proofs, birth proofs, office proofs, and income proofs.
• Once the information gets verified, fill the application form.
• Walk into the nearest dealer. It could also be the bank where you have an account already.
• Attach the documents along with the application form.
• Once the paperwork gets approved, the loan amount gets credited to your account.

Eligibility criteria:

Lenders nowadays are cautious about granting credit to customers. They only provide credit to those who can repay them on time. Therefore, everyone has set criteria in place, which the borrowers need to adhere to. The basic eligibility conditions that every lender follows are:

• Age: The minimum age is 18 years and maximum of 65 years
• Employment status and tenure: Salaried, as well as independent professionals, can apply for the credit. You must stay in the current job for a minimum of six months
• Residential condition: Applicants must reside in the same place for at least a year to show stability
• Credit score: Credit rating required for availing the loan is usually 300 to 900. If you fail to meet this condition, the loan gets rejected or takes a while to approve

Essential features of the loan:

Every two-wheeler loan that you avail from the lender has universally relevant aspects. They are the features of such investments. Here are some for your understanding:

• Margin: Every lender does not offer the total value of the bike. They retain a specific margin, and the remainder gets paid by you. You should know the margin as they are called down payment as per bike loan jargons. Usually, you receive 80-90 per cent value of the vehicle and remaining you pay it off. The margin ratio varies from lender to lender.
• Repayments: You repay the sanctioned amount in equated monthly installments (EMIs). They are generally uniform throughout the loan tenure and comprise of principal amount and interest rates.
• Tie-ups with dealers: Lenders have tie-ups with specific dealers, which helps to fasten the loan process. Customers can avail of the bike loan from the dealers instead of hopping for a lender. Moreover, the loans offered by dealers are economical, and you can negotiate the interest rates, which boosts the whole deal.
• No prepayment charges: The moment we receive surplus cash, we want to settle our liabilities. However, some lenders impose a penalty when the loan gets paid off before the predetermined term. 2-wheeler loans offer the prepayment facility and are free of cost. You can pay off the debt after paying at least six EMIs.

Comprehensive: The loan amount covers not only the vehicle cost but also the cost of insurance. This way, you can easily opt for additional security measures and install safety mechanisms.