If you are planning to purchase a two wheeler to ease your everyday commute but don’t know how to finance its purchase, funding options like two wheeler loans can save the day for you. With a loan for two wheeler funding, purchasing your dream bike is now easier than ever as various financial institutions in the market offer these advances at varied terms. All you need to do is select the right funding option that brings the right mix of financing value and affordability for you.
Below given are some of the essential details that should help you secure the best funding option for maximised benefits.
Types of Two Wheeler Loans
Lending institutions provide bike loans under two different categories. They include –
- Unsecured bike loans
Unsecured two wheeler loans are provided by various lenders against minimum eligibility and document requirement only. One must thus fulfil all the criteria laid down by the lender to avail funding conveniently, which does not involve vehicle hypothecation. To avail an unsecured bike loan, you must also hold a high credit score.
- Secured bike loans
As against unsecured financing, secured bike loans require the borrower to provide the bike for hypothecation for securing funding. A secured loan for two wheeler purchase is a more common funding option for aspiring borrowers as it comes with attractive terms like competitive rates of interest, high-value financing, tenure flexibility and similar other features.
Top Advantages of Two Wheeler Financing
- Differed burden of finances
Usually, when purchasing a bike, an individual needs to make the payment in a lump sum, which can often drain out his/her savings at a go. However, with the availability of necessary financing, such payment can be differed, reducing one’s immediate financial burden.
When availing a bike loan, the lender provides funding for immediate payment to the bike dealer. Thereby, the borrower needs to make repayments in easy EMIs over a selected tenure. Such repayment schedule defers the payment requirement to an extended duration, making bike purchase affordable.
- Affordable loan options
Lenders also bring affordable bike loan financing to the fore to ensure loan repayment remains pocket-friendly for individuals across income segments. To check affordability of a loan for two wheeler, you can compare different lenders for the interest rate applicability and other charges levied. Such charges can include processing fees, penal interest, bounce charges, etc.
Loan affordability also depends on the EMIs payable based on the loan amount selected and tenure of repayment. You can use financial tools like an EMI calculator to assess the amount of EMIs payable for your selected loan option to check if it fits your income capacity.
- Additional cost coverage
Unlike many secured funding options, some bike loans come with the benefit of additional cost coverage as well, which you would be required to pay during vehicle purchase. Such costs can include vehicle registration charges, accessory purchase cost, insurance charges, etc.
- Credit score improvement
Lenders determine an individual’s credibility based on the credit score he/she holds. Such score is, however, built only if you have already availed some or the other type of financing. As bike loans are usually available in a smaller financing value and repayable conveniently, availing the funding can be a stable cornerstone for credit score build-up.
Things to Consider When Availing a Loan for Two Wheeler
When availing a loan for two wheeler, you need to consider a few essential pointers that should help you avail the best funding option.
- EMIs payable: Make sure to check the EMIs you would be required to pay throughout the loan tenure as it can be a key determinant of how efficiently you manage the loan amount.
- LTV availability: You must also check the LTV or Loan to Value ratio offered by the lender to ensure maximum availability of funds.
- Down payment: The amount of down payment you also determines the LTV and the total loan amount you would need for vehicle purchase. A higher down payment usually lowers the LTV but improves loan affordability by bringing down the total loan amount.
Alongside these factors, tenure flexibility and interest rate applicable also contribute significantly in helping you determine the best loan for two wheeler purchase. Make sure to meet all eligibility and document requirements before applying for improved chances of approval.
Learn more about loans from the official page.