In our country, two-wheelers are quite popular because the majority of Indians love to commute by scooter or bike. They are inexpensive to maintain and can assist one in navigating the congested city streets with ease. Nowadays, one can easily purchase their dream bike with two-wheeler finance. Moreover, this loan has attractive features and numerous advantages.
Features of Two-Wheeler Finance:
Lower Interest Rate:
If you are planning to purchase a two-wheeler for yourself or your loved ones, financial institutions offer various financing options to help you buy a new bike. You may avail of a personal loan or a two-wheeler loan. However, purchasing a bike with a two-wheeler loan costs you less. This is because your vehicle is hypothecated with the financial institution. Due to the hypothecation, your lender can easily recover the amount in the event of default.
Depending upon your profile, financial institutions offer a two-wheeler repayment tenure ranging between one year and five years. Your financial institution may also provide you with the benefit of part prepayment and foreclosure of EMI with minimal or no cost. This feature, however, may differ from one finance company to another.
High loan-to-value ratio:
You may be surprised to know that you can get financing for up to 90 percent of your preferred two-wheeler. Though, the loan to value ratio depends upon several factors such as the applicant’s income, age, type of bike you choose, and many more.
Unlike other loan forms such as loans against property and business loans, getting a two-wheeler loan does not require a huge set of papers. One has to satisfy minimum eligibility criteria, and the financial institution will immediately process your two-wheeler finance.
Multiple Repayment Options:
When availing of two-wheeler finance, your lender provides you with several payment options. You can pay cash at their service outlet or their branch. If you want to go digital, then the lender gives you an option to pay at the comfort of your home using an e-wallet, net banking, credit and debit cards, UPI, and a few more. You don’t have to wait in long queues to make EMI payments.
Unlike a business loan or personal loan, you don’t require to be perfect on your credit history. Also, in two-wheeler finance, the financial institution does not expect borrowers to have a high monthly income. As, in this type of finance, the two-wheeler itself is hypothecated with the financial institution, they quickly disburse the loan. The borrower needs to fulfill the minimum eligibility requirement and has to submit the minimum set of documents.
Benefits of Two-wheeler loan:
If you are financing your bike for the first time, two-wheeler finance is the best option to consider. It comes with several benefits that are listed below:
In the case of two-wheeler finance, financial institutions lend up to 90% of the bike’s value. This allows the borrower to spend only 10% as a down payment on their loan, making it affordable for the applicants.
On the spot disbursal:
The majority of financial institutions in this category have direct tie-ups with two-wheeler dealers. One can purchase a bike by walking into a showroom. This method saves both your effort and time.
This loan is spread out for a longer period, enabling borrowers to avoid any undue financial strain. Two-wheeler finance borrowers are given ample time to repay their loans. The loan durations usually range between 12 months and 60 months.
Does not Require high income:
Two-wheeler finance provides higher leverage to persons with a lower monthly income when compared to other loan forms. Even the applicant with a monthly salary of Rs 15,000 is eligible for the two-wheeler loan.
When we talk about two-wheeler financing, we are talking about the bike itself, as well as the costs of vehicle registration, insurance, and accessories. A two-wheeler loan is a better deal because the buyer receives financing for both the vehicle and the other compulsory expenses.
Most lenders, by the Indian Motor Act, provide insurance coverage for both the vehicle and the buyer (accidental coverage) at a marginal policy premium when sanctioning the loan.
Does not require strong credibility:
While good creditworthiness is required for most loans, there are no such requirements when applying for two-wheeler financing. Applicants with poor credit can also apply for this loan without any difficulty. Furthermore, two-wheeler finance can assist applicants in establishing and maintaining a credit history. As a result, they will be in a better position to apply for loans in the future.
Bikes are comfortable for both short or long-distance travel across cities. With two-wheelers, one can effortlessly glide through traffic. However, when it comes to buying, one may not have enough money to buy a bike at once. As such, they can take two-wheeler finance that comes with many features and benefits.