A Two-Wheeler Loan is a product meant for purchasing motorcycles, scooters, or other two-wheeler vehicles. The primary purpose of a Two-Wheeler Loan is to finance the purchase of a motorcycle or scooter. You cannot apply for this Loan for any other purchase. It lets you afford a two-wheeler by paying in instalments rather than upfront. Here is everything you need to know about Two-Wheeler Loans.
Required documents
Two-Wheeler Loans require standard documents such as identity, address, and income proofs. Vehicle-related documents, such as an invoice or quotation from the dealer, registration certificate, Insurance papers, etc., must be submitted during the Loan application. These documents might vary depending on your lender.
Things to consider before applying
Compare rates and fees across lenders to find the most cost-effective option. Choose a tenure that fits your budget. Longer tenures may have lower EMIs but higher overall interest costs. Lenders sometimes ask for Insurance coverage for the vehicle.
Make payments on time
Missing EMIs can negatively affect your credit scores and future borrowing capacity. Defaulting on payments may lead to the lender repossessing the vehicle. Ensure that you make all your 2-Wheeler Loan EMI payments on time within the given duration.
Features of Two-Wheeler Loans
- Loan Amount
Lenders offer Two-Wheeler Finance up to 80-100% of the on-road price, depending on the lender's policies and the borrower's eligibility.
- Interest rates
Interest rates can be fixed or floating, depending on the lender and prevailing market conditions. Rates can vary, so compare options.
- Loan tenures
Loan tenures generally range from one to five years. They are quite flexible, allowing borrowers to choose a repayment period suitable to their financial needs.
- Down payment
Usually, a down payment of around 10-20% of the on-road price is required, depending on the lender's policies and the borrower's creditworthiness.
Eligibility criteria for Two-Wheeler Loans
- Individuals applying for the Two-Wheeler Loan need to be at least 21 years old during application and a maximum of 65 years old at the end of the Loan tenure.
- Lenders assess the borrower's income to ensure they can repay the Loan. Salaried and self-employed individuals may have different income documentation requirements.
- A good credit score is crucial for applying for Loans, as it improves your eligibility and helps you get better Loan terms.
Application process for Two-Wheeler Loans
- Research and compare lenders offering Two-Wheeler Loans. Consider interest rates, processing fees, and repayment terms.
- Submit the required documents along with the application form.
- Depending on your eligibility criteria, creditworthiness, and documentation, the lender assesses your application.
- The Loan amount is disbursed directly to the dealer or your Bank Account upon approval.
Conclusion
Understanding these aspects of Two-Wheeler Loans can help you make informed decisions when financing the purchase of your motorcycle or scooter. Always compare the Loan terms to ensure you can pay the EMI payments in the long run before committing.
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