Two wheeler purchase today has been simplified with the help of bike loan financing. Irrespective of the income level one has, the cost of bike purchase has been made accommodative in that income through easy deferment of such amount payable over an extended tenure. The only catch is that the buyer/borrower must have a regular income source to be able to finance such purchase through a two wheeler loan. These customised advances come with several other useful features as well that allow the borrower to manage the loan more efficiently. Nevertheless, to avail the best financing features one’s borrowing profile must be clean with efficient affordability.
Availing the financing involves meeting a handful of eligibility requirements as well that the individual must meet when applying for the loan. Thus, we have brought along a few essential aspects that you must know or take care of before applying for the loan, which should improve your chances of easy approval as well as make bike financing a simple credit to manage.
5 Crucial Things to Know Before Applying for a Two Wheeler Loan
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Loan amount availability and how much to borrow
When availing financing for bike purchase, one of the first things to check is the total loan amount availability as offered by the lenders. While reputed lenders offer financing of up to Rs.5 Lakh for bike purchase easily, the loan amount available to you depends on the LTV or the Loan to Value ratio that the lender determines as per your borrowing profile. It is a set percentage of the bike’s total cost that the lender is ready to finance through a bike loan while the borrower needs to meet the remaining cost through a down payment. The LTV for these loans can go up to 90% for these advances.
As for how much you should avail, it totally depends on your financial affordability, which you can easily assess through EMI calculation. Use a two wheeler loan EMI calculator to compute the instalments payable as per your financial stability and apply for a suitable loan amount accordingly.
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Interest rate affordability
Knowing the two wheeler loan interest rate is also crucial to keeping the financing overall affordable. It is thus ideal that you check out the interest rate applicability for these advances through a widespread research of various lenders in the financial market offering the loan. It is best to find a lender that offers the lowest rates on the advance along with other fees and charges.
Once you have found a suitable lender, you can negotiate with them as well based on your financial standing for securing low rates on the advance.
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Options for repayment
While the standard mode of bike loan repayment is through EMI payment throughout the tenure, lenders offer other modes for repayment of the advance as well. For instance, with lump sum funding available, you can choose to part-prepay your advance at any time before the tenure’s end. And reduce the total loan liability, thus saving on the interest payable as well. Similarly, you can choose to foreclose your loan account as well before the tenure’s end through complete repayment of the advance. These facilities are mostly chargeable but attract a nominal rate only. You must first determine the overall savings on these facilities before opting for one.
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Tenure flexibility
A large part of two wheeler loan affordability depends on the tenure available for repayment of the advance. In the case of bike loans, lenders usually offer long tenures to ensure that the EMIs so arrived remain within the borrower’s repayment capacity. With the best financial institution, the tenure for bike loans can go up to years.
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Credit score suitability
While you need to meet a handful of eligibility requirements. To avail a two wheeler loan, credit score is not one of them. Nevertheless, the importance of credit score screening can’t be undermined. When availing the advance as they define the creditworthiness of the holding individual. Ideally, a candidate must hold a score of at least 700 to get the best loan features.
The time involved in bike loan approval and disbursal has been reduced to a minimal. With some lenders providing approval in as little as within a few minutes of application only. Disbursal often follows shortly after. You must thus make sure that you meet all eligibility and document requirements. When applying for the loan to receive quick approval for the advance.