Indians love their festivals and celebrate them with lots of pomp and enthusiasm. Historically, it’s also a season when the two-wheeler industry experiences a spike in sales. Given the buoyancy in market sentiments, most financial institutions roll out attractive offers like better interest rates, less loan processing fee, no penalty on prepayment etc. during festival like Ganesh Chaturthi, Dhanteras, Diwali. So, this maybe a great time to get that two-wheeler loan to finance that bike dream of yours.
Why take a loan?
For those of you who have been in wondering whether to pay upfront for your bike purchase or take a loan, here are some advantages of going with the latter option. Here's why:
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Lack of credit - Well, there are two types of buyers when it comes to credit availability. Those who have the requisite capital and those who don't. The latter obviously needs a loan to buy the bike and they can get more benefits on opting for one during this season. For those who have the capital, it can be a way of improving their credit score by paying the easy-on-pocket EMIs.
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Reduce financial burden – Some financiers offer 80% of the two-wheeler’s on road price. This lowers the investment burden from your side to the bare minimum. Spending all your savings in a single buy is never a good idea. What if someone in the family falls sick and you need urgent money for an emergency situation? In such a case, paying smaller amounts every month for your bike is the safer way to go.
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Better manage budget - With a fixed amount diverted towards paying installments, you can manage your budget better. You would know exactly how much income is left with you after setting aside the money for EMIs to run your home and other expenses. You can then cut out of additional expenses if you see the expenditure going beyond the income.
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Get financial flexibility to purchase more - With a loan, you have more capital at your disposal. It means you can go for more. If your savings allowed a 110 cc bike, you can now look to buy your favorite 150 cc bike. Or after buying the bike via loan, you will still have money left to buy that gold earring for your wife.
How to go about taking a loan?
The festival season is a time when you are flooded with offers from financial institutions. Don’t get confused. Remember these things before plunging in to buy your dream bike.
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Choose a bike - Availability of a loan should not decide your bike; your requirement should. So, ask yourself why you need the bike - is it a luxury or a necessity, how much will you travel, is the mileage good enough, does the EMIs fit your monthly budget etc. One should also read a lot of reviews before zeroing in on the bike and also take test drives to be double sure.
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Plan your finances and use common prudence: Fix your down-payment,EMIs and loan tenure according your finances. If you can pay a bigger chunk as EMIs from your income, it's advisable to do that to pay off the loan quickly. But if you are afraid that you might default on them, go for a smaller amount.
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Check your Cs: Money-lending institutions check 5 Cs of the borrower - Character, Capacity, Capital, Conditions, and Collateral. So, before you approach banks, evaluate your financial standing and improve on any aspect that you might be lacking.
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Research about the lenders – Do not go by what the dealer is offering. Do your own research about the various offers and benefits different lenders are giving and then go for the one that you find the most profitable.
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Keep your Documentation ready - For faster processing of the loan, keep the required documents - age and residence proof, salary statements if a salaried employee or bank statements in case of business owner/ freelancer, photos etc. ready.
Motorcycle loan is a secured loan where the bike itself is considered a collateral, which means you can lose the bike if you default on the loan. We are sure you don't want that. So, plan things according to your finances and look for the best offers available during the festive season. Let this Diwali be the perfect moment for cruising those empty roads on your bike, a song in your head ,wind in the hair and happiness in your heart.
