As we begin a new year, many of us might be actively fondling with the idea of getting a personal two-wheelers. However, a common concern among is the high cost associated, and thus the best option to finance our dream is through a two-wheeler loan.
If you have been considering getting a
two wheeler loan for some time now, then this article is for you as we will be discussing the top 5 things you need to consider before choosing a two-wheeler loan in India.
- Your Credit Score
Since most two-wheeler loans in India are unsecured in nature, one of the first and most important aspects lenders take into consideration while assessing your loan application is your credit score, which depends on four main factors:
- The total number of loans you have taken in the past
- The total amount of loan you have taken in the past
- The total number of timely payments you have made
- The total number of payments you have missed
In India, every borrower is given a
credit score on a scale of 900. Most lenders offer two wheeler loan online approval
options. However, to benefit from this, you need to have an established credit history.
Also Read: Things to Consider Before You Buy a Two Wheeler in India
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Globally there are two types of loans available in every category, secured and unsecured, and the same is true for two-wheeler loans, as well. A
secured loan dictates that you need to pledge an asset or collateral, which is of the same or equal value as the loan amount. On the other hand, to avail an unsecured loan, you do not have to pledge any asset or collateral.
Although most two-wheeler loans available in India are unsecured, there are some lenders who offer secured loans as well that usually have lower rates of interest.
- Tenure of Your Loan
The third aspect you need to consider in order to get the best two wheeler loan
is the tenure of the loan. Most lenders in India offer a 12 to 60 months tenure, so that you can effectively manage both your personal finances and the stress associated with paying off a loan. However, you need to take into consideration the fact that a longer tenure generally indicates that the loan will arrive with a higher interest rate, as the associated risk for the lender is higher. So, it is better to opt for a loan with a shorter tenure.
Also Read: A Complete Guide To Choosing The Two-Wheeler Loan Tenure - Nature of Interest Being Charged
In the world of lending, rate of interest can be broadly divided into two main categories; floating and fixed. A floating rate of interest is one where the rate of interest either increases or decreases with time, depending on a variety of factors like the present market conditions, the loan amount which is still due for repayment, your credit score and the number of payments you have made in the past (both timely and missed). Few lenders offer a floating interest rate on two-wheeler loans. A fixed rate of interest dictates that the rate of interest that has been mutually agreed upon between the lender and borrower, at the time of signing the documents will remain unchanged throughout the tenure of the loan.
- Documents Required
Mentioned below is a list of
documents required for a bike loan for salaried as well as self-employed professionals.
- Salaried Professionals
- eKYC documents - Aadhar Card, PAN Card, Voter ID, etc.
- Income proof - salary slip, ITR and latest bank statement
- Cancelled cheque and passport size photographs
- Self-employed Professionals
- eKYC documents - Aadhar Card, PAN Card, Voter ID, etc.
- Income proof - income certificate, ITR and latest bank statement
- Cancelled cheque and passport size photographs
Availing the benefits of the best two-wheeler loan means ensuring that your dream of owning a bike becomes a reality. So, take the above aspects into serious consideration and make your choice wisely.
