Are you applying for two-wheeler loans in India for the first time? Do you already feel a palpable sense of excitement of skipping the serpentine bus queues, and bidding goodbye to surcharges on cab bookings?
Here, to make the procedure of applying for two-wheeler loans hassle-free, we discussed some of the major factors to consider before choosing two-wheeler loans in India.
Check your credit score
A decent credit score is 750, or above to get a two-wheeler loan at the best interest rate. There are plenty of bureaus like CIBIL, Experian, Equifax, and online lending marketplaces available online from where you can acquire your credit history. If you have any other loan, it will be a good practice to check your credit score before applying for a two-wheeler loan. You can even get a credit score check on our platform.
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Check your loan eligibility
The eligibility criteria of two-wheeler loans vary from one lender to another. But there are a few standards followed across all the lending platforms are as follows:
Compare interest rates
It’s better to compare the interest rates of up to five or six banks or financial institutions before finalizing an option. Interest rates offered can be anywhere between 9.5% to 17% depending upon your credit score, two-wheeler model, repayment capability, current employer, and lender. When you are using the Fintech platform to apply for two-wheeler loans, the lender does a comparative analysis for you to help you in getting the best two-wheeler loan.
Check for the loan tenure
Deciding on your loan tenure is imperative as it influences your EMI. Additionally, the amount borrowed, and the interest rates have a direct impact on the bike EMI. You can calculate your bike loan EMI with the help of the EMI Calculator available on the lender's website.
You will have a low EMI when you have a long tenure, but you will pay a high-interest rate. Conversely, you pay less interest when your EMI is higher. Thus, you need to make sure you pick the loan tenure carefully.
Never go for over-borrowing
Just because two-wheeler loans are easily accessible, don’t overborrow. It will always shoot up your monthly EMIs and can derail your overall finances and budget. Worse, you might not be able to pay and end up with the default. This can further dampen your chances of availing future credit. Two-wheeler loans depend primarily on the price of your motorbike, as well as your creditworthiness.
Check the loan processing time of each lender
Once you have chosen the vehicle, contact your lender and discuss with them about the turn-around -time for loan disbursement. Once you submit all the documents, the loan should not take more than 10 days. If the lender has a tie-up with the two-wheeler dealer, the loan amount is credited directly to the dealer’s account. Lastly, ensure that you use the vehicle only for the intended purpose. Do not make any unauthorized modifications to the vehicle. This might void the insurance.
Check for processing fees and foreclosure charges
In addition to the interest rate, you might also check for the processing fee in two-wheeler loans. It also differs from lender to lender. Processing fees can go as high as 3% of the total loan amount. Also, it’s prudent to be wary of prepayment fees charged by your bank or NBFCs of choice, as it can leave a huge impact on your total expenditure.
Make a good re-payment plan
Whenever you are planning for a two-wheeler loan, always understand the repayment plan. It helps you to get the benefits the vehicle brings to you. Calculate the EMI well in advance using the Two-Wheeler loan EMI calculator. This financial tool is easily available on each of the lending platforms that are offering two-wheeler loans online. You can even set up the standing instructions with your bank to ensure that you never forget an EMI.
Now that you know everything regarding the pre-application process, it is time to apply for a two-wheeler loan and bring your dream bike to your doorstep. Apply for a two-wheeler loan online and enjoy competitive interest rates, flexible tenure, and low processing fees, all in one place.