Two wheelers are the most popular modes of transportation in India, especially in metro cities. People who can afford a four-wheeler also prefer commuting on a two-wheeler because it helps them smoothly sail through the heavy traffic.
Besides that, two wheelers do not come cheap since some models may be as pricey as cars. Therefore, if you are planning to fund your two wheeler with a bike loan, here you will know how to do that.
Things to Know Before Avaling Two Wheeler Loan:
- Choose Your Lender
The first step is to find a lender offering the best two wheeler loan. You will find hundreds of lenders offering loans to buy two wheelers. However, you must find the one offering the best deal at favourable terms and conditions. While looking for the best lender, you must compare them based on several factors, including the loan amount, interest rates, processing fees, additional charges, customer service, repayment terms, etc. Compare quotes from different lenders and choose the one that best suits your requirements and budget. Avoid applying for multiple loans simultaneously since it may lead to loan rejection and reduced credit score. Do your research and apply for the best loan offer suitable for your needs.
- Check Credit Score
A credit score is one of the most significant parameters lenders check to determine your credibility. Credit bureaus give you a credit score based on your repayment history and credit behaviour. The higher your credit score is, the greater are your chances of loan approval, and the lower will be your interest rates. Most lenders have a minimum credit score requirement that you must fulfil to apply for their loan. If you have a lower score, use ways to improve it before filling out the application form.
Some tips to improve your credit score include paying credit card bills and loan EMIs regularly, retaining old accounts, reducing your DTI ratio and credit utilisation rate, and diversifying your credit portfolio with different credit types.
- Calculate EMIs
Use a two wheeler loan calculator to calculate your EMIs and decide how much loan amount you should apply for and for how long. Most lenders offer flexible repayment terms, allowing borrowers to choose according to their repayment capacity. By calculating your EMIs, you get an estimate of the EMI amount you have to pay each month. Accordingly, you can adjust your repayment tenure to reach an EMI amount that you can conveniently afford.
- Check Loan Eligibility
All lenders have their own sets of eligibility conditions that prospective borrowers need to fulfil. Check the lenders’ two wheeler loan eligibility criteria while comparing the lenders. Move forward only with the lenders whose two wheeler loan you are eligible for. Most lenders’ eligibility conditions are related to the borrowers’ age, income, employment, and credit score. Ensure that you fulfil them to avoid loan rejection and save your credit score.
- Fill the Application Form
You need to fill a loan application form to apply for the loan you want. You have to provide a few basic details in this form, including your personal details, contact information, loan requirement, income and employment details, bank account information, and others. Once you enter the required details, submit the application form and wait for a response from the lender. If you are eligible, the lender’s customer representatives will contact you to discuss the next steps.
- Upload Documents
After scrutinising your loan application, if you are eligible, the lender will ask for a few essential documents supporting the details you provided. These often include your address proof, identity proof, and income proof. These days, lenders do not ask you to visit their office and submit the documents. You may scan and upload them via their website or loan app. This makes the entire loan procedure extremely fast and 100% paperless.
If everything goes smoothly and the lender verifies your credibility, you will get your loan approval. Once approved, the lender will disburse your approved loan amount into your bank account within a few working hours.
- Make a Repayment Plan
Once your loan gets approved, and you receive your loan amount, your repayment tenure starts from the subsequent month itself. Since the lenders allow you to select the loan tenure according to your repayment capacity, you should not have any problem paying the EMIs on time. Still, it is crucial to create a budget and control your unnecessary expenses to stay consistent with your EMI payments.
If you are looking forward to buying a two wheeler, a two wheeler loan increases your purchasing power, and you get enough funds to buy a better model. Research and find the best lender suitable to your requirements and follow the steps mentioned above to apply for a loan the right way.