In India, a two-wheeler is more of a necessity for most households than a luxury. This is the reason why a recent statistic depicted that 15.12 million two-wheelers were sold in India in the financial year 2021. A two-wheeler loan always comes in handy when someone is buying a bike or a scooter. So, if you are planning to buy your enchilada for freedom or your most necessary mode of transportation, this article will help you to understand everything that you need to know about a bike loan.
Why should you avail of a two-wheeler loan?
Of all the different kinds of loans that you can avail, a two-wheeler loan is the easiest to process. However, the loan terms and conditions may vary from financiers to financiers. If you find the right finance company, then you can get the loans easily. Here are certain characteristics of the best bike loan:
1. The loan amount should be sufficient: When it comes to loans for buying a bike, there is always a down payment involved. In many cases, certain finance companies tend to ignore the down payment and finance up to 100% of the on-road price.
2. The interest rates should be competitive: Some companies also provide a two-wheeler interest calculator on their website. You can check the interest rates for your loan and based on that, decide which company to avail it from since there are many companies out there. Many companies offer loans at an interest rate as low as 11.5%. It also depends on your credit score.
3. There should be a quick disbursal of the loan amount: When you are going to buy your bike or scooter, you would need the funds quickly. This means that the company you are availing the loan from should have a quick disbursal policy of the bike loan amount, or else you may lose out on benefits at the showroom.
4. You can apply with convenience:Many companies usually have a long wait period and other things to check before approving the loan. Some companies have made this processing a lot faster with minimal documentation, online verification, paperless transactions, etc. You should try these companies for your two-wheeler loan.
5. There should be complete transparency: When it comes to financing companies, terms and conditions are very important. They often provide attributes like bike loan minimum interest rate and then end up charging more due to hidden costs. So, if you have found a company that does not have convoluted terms and conditions and is fair, you should apply for that bike loan.
Keeping all these factors in mind, there are a lot of finance companies that come to mind. However, Shriram city’s two-wheeler loan interest rate is highly competitive and also serves all the factors mentioned above, which kind of makes it the most convenient company for these kinds of loans.
Eligibility criteria for a two-wheeler loan
Since you have already developed an idea about what kind of company you should choose to get your two-wheeler loan from, this section of the article will cover if you are eligible to get the loan. If you tick these eligibility parameters, you will be ready to avail of the loan.
1. In India, you should be at least 21 years old to apply for a bike loan. However, if you are a student and looking to purchase a bike below the age of 21, you will need a guarantor to avail the loan. The maximum age for the loan applicant should be 59 years during the time of maturity of the two-wheeler loan.
2. Among loan applications, a salaried individual is most preferred. The minimum salary can be as low as INR 12000 per month. However, he needs to work for at least a year and the motorbike loan interest rates should be lower than his paycheck.
3. Self-employed individuals can also apply, but they need to have proof of income and should also be working in the same business for more than two years. This lowers the bike loan minimum interest rate and keeps the loan neat.
4. PAN is an essential piece of documentation and should be revealed during the two-wheeler loan application. Since all the loan commitments are attached to the PAN card, it will be easy to understand the credit rating.
5. Another vital eligibility criterion is that there should be no bounced or dishonored cheque in the last 12 months of your banking history. This may seriously hurt your chances of getting the loan, or the motorbike loan interest rates can simply get higher.
6. You should have all the documents handy and you should also be staying in your current residential address for more than a year. This helps in fast-tracking your bike loan application.
What are the documents required for your two-wheeler loan?
When you are applying for a bike loan, you will need to keep certain documents handy, which will make the process faster:
1. PAN Card is required in order to avail loans from any company whatsoever. It helps the company to track down your finances, pending loan payments, etc.
2. You would also need proof of address. Any utility bills with your name and residential address, drivers’ license, passport, and Aadhar Card work for this.
3. For your two-wheeler loan, you will also need proof of income, which can be your bank statements from the last one year or a copy of the payslip attached to your paycheck.
4. You would also need the endorsed vehicle registration certificate, the most crucial document for loan approval. Or else your loan will not be processed.
5. The banking details of your bank account will also be needed when the loan amount is disbursed. You can provide a canceled cheque reflecting the same.
The Bottom Line
Due to so many companies operating in micro-financing and instant loans, people get confused about whom to take a loan from. However, if you go through some portals and check the EMI for the bike calculators on these portals, you would get a fair idea of the company to choose. Also, Shriram Finance’s two-wheeler loan interest rate is very low for a person applying for a loan for the first time. You can always look at it to have a fair idea.