Owning a dream machine like a fancy bike has always been a thought not far from many minds. Also, the prevailing pandemic situation has almost made it compulsory for you to have your own mode of transport. That is purely from the view of keeping a social distance. With one of these or a combination of both the factors, you have plans to purchase a bike, but are short of funds, Two Wheeler Loan or Bike Loan is the way out for you.
Colloquially, a Two Wheeler loan is an advance given by a financial institution. As a borrower, you are liable to repay the principal amount along with interest. The repayment is through equated monthly installments. The loans are sanctioned based on the ex-showroom cost of the Two Wheeler. Another factor that goes into deciding in favor of approving the loan is your capacity to pay. The Two Wheeler interest rate is generally on reducing balance. The interest portion on your EMI gets reduced every monthly repayment.
As a potential buyer of a Two Wheeler or Scooty Finance, you should always look for the lowest Two Wheeler loan interest rates. Now, innumerable online platforms are available where you have the possibility of checking out interest rates offered by various banks and non-banking financial companies. You need to do a thorough study of the market, different loan schemes that are on the shelf before deciding on the option that suits you the most.
One of the main reasons you should evaluate the different options before deciding on any one, is to ascertain how much the loan will cost you over the long term. Financial institutions offer two kinds of interest schemes. They are fixed rates or variable rates. The fixed rates of interest remain constant over the loan tenure, whereas, the variable rate changes as and when there is a change in repo rate announced by the RBI. Normally, variable rates are lower than fixed rates of interest.
All the banks, non-banking finance companies and online platforms that offer financial guidance have incorporated online EMI calculators on their websites. This is one of the most useful tools for you to evaluate the interest rates as well as EMIs for the planned Two Wheeler Loan.
You need not be a financial wizard to arrive at the EMI amount when you are using a Two Wheeler Loan Calculator. With a simple formula, you will know what is going to be your monthly commitment towards servicing the Two Wheeler Loan. You just need to submit three factors in order to arrive at the EMI amount, they are as under:
1. Loan amount that you need
2. The desired loan tenure
3. Your preferred rate of interest
Apart from the online calculator, there is a thumb rule for calculating the interest on Two Wheeler Loans. This is given hereunder:
Two Wheeler Loan EMI Calculation Formula - EMI = [P x R x (1+R)^N]/[(1+R)^N-1], P stands for the loan amount or principal, R is the interest rate per month and N is the number of monthly installments.
As most banking operations are going digital, all banks and financial institutions offer online bike loans today. The official websites have an option on the homepage where you may directly make an application for Two Wheeler Loan. As a potential buyer, you will have to follow some simple steps for an online application:
1. Visit the homepage of a bank or a non-banking financial institution
2. Click on Online Two Wheeler Loan Application Form
3. Fill in the basic details. You need to fill up your name, city of application, make and model of the Two Wheeler, etc.
4. Fill in your personal credentials - i.e., provide your KYC details.
5. Once the details are filled up correctly, the loan eligibility will automatically show up.
6. After which, you may proceed for the loan approval
As is evident from the steps above, Two Wheeler Loan online approval process is straightforward, and in many cases, approvals are given within 24 hours.
In the case of a Two Wheeler Loan, a specific portion of the bike's cost needs to be paid by you. That is called a down payment. The loan is given on the remaining part, and the interest is calculated accordingly.
However, there are some tailor schemes available called 0 Down Payment Bike Loans. Under this arrangement, loans are given on 100% of the cost of the Two Wheeler. The direct advantage that you get as a borrower does not dilute your funds at all in cases of 100% finance schemes. Even when you may default on your EMIs due to some unforeseen circumstances, you lose only the EMIs you have paid already and nothing more. That is because you have not made any upfront investment on the Two Wheeler.
As a primary criterion for availing of 0 down payment bike loans, you need to be within the age bracket of 21 to 59 years. Anybody with a salaried income or a self-employed professional may apply for this scheme.
What Are The Required Documents For a Two Wheeler Loan
As an applicant looking for a Two Wheeler Loan from any financial institution, you will have to submit a few documents. Let us have a look at the checklist given below:
1. Identity Proof - Aadhar Card or a Passport
2. Address Proof - Aadhar Card or a Passport, another alternate is an electricity bill
3. PAN Card
4. Proof of Income
Salaried - salary slips for last three months, bank statement of last three months
Self Employed - audited Balance Sheet along with bank statement for last three months
As one of the options available in the market, Shriram Finance Two Wheeler Loan schemes are very competitive and come with easy terms. With their commitment to serve, they have become India's largest Two Wheeler finance company.
Shriram Finance specializes in fast and hassle-free loan disbursal. They have various loan schemes to suit different needs. They also have tie-ups with almost all leading Two Wheeler manufacturers and a presence in their showrooms. Therefore, it is advisable to check out the options dished out by Shriram Finance before you finally decide on a financier for your bike.