Banks offer loans to salaried and self-employed to fund the purchase of two-wheelers. Two-wheeler loans are disbursed really fast and require minimal documentation. Two-wheeler loans can be availed to purchase a scooter, motorbike or even luxury bikes. The banks fund up to 100% of the cost of the vehicle and these loans come with minimum income requirements.
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What is a Two-Wheeler Loan?
Two-Wheeler Loan Eligibility:
The banks have certain guidelines and eligibility criteria which must be fulfilled to get two-wheeler loan approved:
- The applicant must be between 21 to 65 years of age.
- A two-wheeler loan can be availed by people having a minimum monthly income of Rs 10,000 -15,000.
- A credit score of 750 and above is preferable
- The bank finances up to 100% of the value of the motor bike.
- The applicant must have a minimum work experience of 1 year.
- The applicant must have stable residence and should be residing at the current address for more than a year.
See Also: Why Take a Two Wheeler Loan?
Documents Required for a Two-Wheeler Loan:
- Proof of identity: PAN card, voter ID card, Driving license.
- Proof of address: Utility bills, passport, Aadhaar card.
- Income proof: Salary Slip, IT returns, bank statement in case of salaried individuals, IT returns and audited financial statement in case of self-employed.
Advantages of Two-Wheeler Loan:
There are several advantages of a two-wheeler loan.
- Generally, in India, people buy bikes by saving money. A two-wheeler loan can be availed if you want to buy a bike in the higher price segment.
- You can apply for the loan with a guarantor or a co-applicant.
- Get access to funds at moderate and affordable interest rates.
- Flexible tenure of repayment.
- Repay the loan in affordable monthly EMIs that suits your budget.
- Use the two-wheeler loan to build credit history by paying your EMIs on time and enjoy a good credit score.
See Also: How To Calculate Two Wheeler Loan EMI?
Points to Remember While Applying for a Two-Wheeler Loan:
There are certain points that ensure you get the right two-wheeler loan without paying high interest:
- Make sure you do the research before applying for a two-wheeler loan. Compare the various options available in the market and evaluate lenders based on processing fees, repayment options, interest rates and loan terms.
- Choose the two-wheeler loan repayment tenure, wisely. The tenure helps determine the amount you will pay each month towards the loan. To get a clearer view, you may opt to use the IndianMoney Two Wheeler EMI calculator. Shorter loan tenure, helps pay two-wheeler loan faster with less number of EMIs. A longer tenure ensures you pay off the loan comfortably, without facing a financial crunch.
- Opt for the lender that offers decent loan terms at an affordable interest rate. The interest determines the overall cost of your two-wheeler loan. An affordable interest rate helps get the loan at lower EMIs and makes your two-wheeler loan cheap.
- Get an idea on all the fees and charges involved in getting the two-wheeler loan. Ask your lender on the processing fees and the loan foreclosure fees. These terms vary across lenders.
- Compute your two-wheeler EMIs using an online EMI calculator and make sure they fit your budget. Applying for a loan higher than repayment capacity may lead to rejection of the two-wheeler loan application or you getting the loan at higher interest rates. Choose a loan amount that you can pay off within the given timeframe.
Factors that affect your two-wheeler loan interest rate:
- Credit score: A good credit score helps avail two-wheeler loans at low interest rates. A good credit score is preferred for easy disbursal of two-wheeler loans.
- Debt-to-income: Banks generally prefer an applicant who has a low debt-to-income ratio, where the applicant can easily manage two-wheeler EMIs.
- Age: Your age plays a major role in determining the interest rate of the loan.
- Place of employment: if you have a stable job or business and you have a regular source of income, then the bank is likely to offer you a loan easily.
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