Five things Every First-Time Borrower Should Know About Two-Wheeler Loan

Posted by John Judge on April 23rd, 2019

Over-crowded public transport is one of the biggest reasons why an increasing number of people in India now prefer having their own two-wheeler. They are convenient, affordable, and can now be easily purchased with the help of a bike loan. However, while taking a bike loan is now easy and quick, it is essential to understand that every type of loan is a responsibility for the borrowers.

Just like all the other types of loans, there are many important things that a first-time borrower should know about bike loans. 5 of the most important things are-

1. Interest Rate

If you have no prior experience of availing any type of loan, one of the most important things you should know is the associated interest rate. The interest rate on such loans vary between banks and thus, you should look for a bank offering the loan at the most affordable rate. You can visit the official website of the banks to know more about their loan offerings. Compare the interest rate of different banks to pick one with the most competitive rate.

2. Eligibility

Banks have their eligibility requirements based on which they approve bike loan applications. These requirements generally revolve around your age, credit score, income, type of employment, and job stability.

While the eligibility requirements of banks are the same, it is still important to check the requirements of the bank you are interested in before applying for the loan. This will help you know whether you meet the eligibility requirements of the bank and protect yourself from getting your loan application rejected.

3. Maximum Loan Amount

Most banks generally offer 80% of the on-road cost of the vehicle. You will be required to pay the remaining 20% as a down-payment out of your own pocket. Before applying for the loan, ensure that you check the maximum amount that a bank offers so that you can make necessary arrangements for the remaining amount.

Also, your eligibility can play a role in the maximum amount you will be allowed to borrow. If the bank is not fully satisfied with your eligibility, the loan amount can be reduced as well.

4. Documentation

You will also be required to submit some documents along with your loan application. The bank will require documents regarding your ID, address proof, income proof, and existing loans if any.

Depending on the bank you select, you will either be required to upload these documents online or submit them at the nearest branch of the selected bank. Check the documentation requirements of the bank so that you can arrange the documents beforehand.

5. Repayment Tenure

Most banks offer a two-wheeler loan for a duration of up to 3-5 years. You will be required you clear the loan within this duration by paying monthly EMIs. In most cases, the banks allow you to select your loan tenure. As the tenure has a direct relationship with the EMI amount, make sure that you select a tenure whose EMI you can easily afford each month.

Selecting the Right Bank for Your Bike Loan

As you can see, most of the things related to a bike loan rely on the bank you select for the loan. This makes it necessary to be as cautious with the bank selection as possible.

Look for a top bank with an excellent reputation among customers to make sure that the whole process of taking and loan and repaying the same is easy, quick, and hassle-free.