Are Loans Available for a Used Two-Wheeler?
People buy new vehicles and sell their old ones at a heavily discounted price. These days, you can easily get a loan for a used bike. Due to the narrow roads, potholes, gullies, etc, a two-wheeler is the most suitable for a country like ours. Personal vehicles provide a feeling of independence. You are no longer dependent on autos and buses.
A used bike is more affordable in the long run. Used bikes are cheaper than new ones. You can get a loan for buying a used two-wheeler online. This article will talk about the most important things to consider when taking a pre-owned bike loan.
Advantages of Financing a Used Two-Wheeler:
- Maintain liquidity by applying for a used bike loan
Buying a vehicle in a lump sum can burn a hole in your pocket. You should always have sufficient money available. For that reason, it is better to finance when buying a used two-wheeler. You won’t need to pay a lump sum. This will ensure that you will have sufficient reserves in your hands for any emergencies.
- Get value for money
A used two-wheeler will do the same job done by a new two-wheeler while being inexpensive. By taking a used bike loan, it will be more affordable for you to buy a used two-wheeler. Not only that, the lump sum can be invested in various other things.
- No collateral required
You will not need collateral for a second-hand bike loan. Putting something as collateral is risky as you might lose the asset if you miss some payments. However, with a used bike loan, you won’t need to have collateral.
- Improve your credit score
Your CIBIL score decides whether you will get a used bike loan or not. By financing a used vehicle and repaying in time, you will be improving your credit score.
This means that you will be able to get a pre-owned bike loan easily in the future. You can easily get business, home, and car loans in the future by improving your credit score.
Not everyone can get a pre-owned bike loan. Certain conditions need to be fulfilled when applying for a used bike loan. These are:
1. Age criteria
You can only get a used bike loan if you are more than 21 years of age. Furthermore, at the time of the two-wheeler loan maturity, you cannot exceed 59 years of age.
Both salaried as well as self-employed individuals can apply for a second-hand bike loan. However, it will depend on your CIBIL score whether you get a loan or not.
3. Salary requirements
You should have a salary of more than Rs. 12,000, and you will need work experience of at least one year. This is to ensure that you will be able to repay the used two-wheeler loan.
4. Condition for self-employed people
An individual who is self-employed needs to be in business for more than two years to apply for a used two-wheeler loan.
An applicant should disclose if they have taken out a used two-wheeler loan in the past year.
There should be no cases of check bounces in the last 12 months from the date of application. Additionally, you should be living at the same address for more than a year.
Before applying for a loan, check the eligibility criteria. If you meet the criteria, you should be able to get a loan if you have an acceptable CIBIL score.
Documents Needed for a Used Two-Wheeler Loan
1. Identity proof
You will need to prove your identity. For this, you can show your passport, driver’s license, voter ID card, or PAN card.
2. Address proof
The lender will need to verify your address. For this, you will need to show your passport, driver’s license, or gas bill with the gas book.
3. Other requirements
The other requirements are:
1. Recent passport-size color photographs.
2. Documents for proof of income.
3. Bank statement for the past six months.
4. A cancelled cheque and ACH form for Electronic Clearing Mandate.
Any other document specified by the lender.
How to Get Financing for a Used Bike?
Financial lenders check your CIBIL score to decide whether to offer you a loan or not. A CIBIL score is decided based on your bank transactions, borrowing, and repayment history. If you have a good CIBIL score, you can easily get a loan.
Most importantly, if you get financing for a used bike and pay the installments on time, your CIBIL score will get better. This will help you get financing in the future.
2. Selecting the lender
This is the most important part of the process. The wrong lender can increase your costs by charging you more for miscellaneous things. This will increase your EMIs significantly if you miss a payment, etc.
The lender should have pre-decided terms and conditions. They should have a good reputation in the market. Go for a trustworthy lender.
3. Compare the interest rates
It is important to conduct your research before availing the loan. You should compare the interest rates of different lenders and see which lender is offering the best rates.
However, be careful of the hidden charges, such as documentation charges, loan processing charges, etc. Go for a trusted lender with the lowest interest rates.
4. Service quality
This is a significant factor. You want quality service from the lender. You should be able to apply for a loan quickly. Next, select a lender that needs minimum documentation, disburses loans quickly, and is transparent.
Taking out and repaying a loan takes some time, and you will need transparency and high-quality service from your lender.
5. Online or offline?
Coronavirus is still at large. It still is not safe to apply for a loan offline. You should prefer applying for financing online while the pandemic is still an active threat. There are plenty of options available online.
6. Don’t go overboard
Just because you will not be paying a lump sum for the vehicle does not mean you should buy an expensive two-wheeler. As a rule, your EMI should not be more than 40% of your net income. However, it is advised that you should keep the EMI percentage as low as possible as life is quite unpredictable, and you should always have funds in hand. Tying up a significant amount of salary in EMIs is not a good financial decision.
7. Pay back earlier than decided
There is an option of paying your loan back earlier than the decided period. You should pre-close your loan to save some money as you will have to pay less interest.
Shriram Finance is the perfect option if you’re looking to purchase a loan online at a low interest rate with a quality financial institution. It is a trustworthy financial lender providing finance for used bikes without any hidden charges. All you need to do is fill out the application to get the loan process started.
With interest rates starting from 11.5%, Shriram Finance can be a lucrative option for you. They provide impeccable service to customers. You can get financing with minimum documentation, and the loan amount will be disbursed shortly after your loan application is approved. Apply now to finance the used two-wheeler of your choice online.