A two-wheeler is the ideal mode of transportation for everyone because of how free it is to ride one and since they are also incredibly affordable. Purchasing a brand-new two-wheeler gives you a feeling of accomplishment and the ability to easily navigate Indian cities. While large traffic jams remain the misery of most major city streets, owning a two-wheeler helps you travel quickly through the traffic. Applying for a two wheeler loan is the perfect solution if you have a tight budget and cannot afford the complete payment at once.
Features of a Two-Wheeler Loan
Some of the distinct features of a two-wheeler loan are as follows:
- Most banks and non-banking finance companies (NBFCs) loan the entire on-road cost of two-wheelers.
- Most of the time, the loan amount also covers the expense of the two-registration wheelers and insurance coverage.
- Because a two-wheeler loan is a secured loan, interest rates are quite modest. The interest rates start at merely 9% and can reach 26% depending on the person’s credit history and other variables.
- A two-wheeler loan typically has a maximum term of 4 years. Although it is not particularly popular, certain financial institutions or NBFCs provide a two-wheeler loan with a five-year term.
- Several banks have pre-approved bike loans accessible to existing customers. These loans are granted and disbursed right away.
- Most two-wheeler showrooms have agreements with financial institutions for two-wheeler loans, and applicants can submit their loan applications directly from the dealership, making purchasing the vehicle quite simple.
- A two-wheeler loan requires very little, if there is any, paperwork, and it is processed quickly.
- Certain banks provide outstanding lower monthly payments and EMI plans to make loan repayment simple for customers.
Eligibility Criteria for a Two-Wheeler Loan
The factors which come under the eligibility criteria for a two-wheeler loan are as follows:
Age
When determining whether or not you’ll be eligible for a loan, age is usually considered to be among the key factors. Lenders typically prefer young applicants since they’ve got a long time to pay back their loans efficiently.Â
If you are a working professional, you must be at least 21 years old to apply and no older than 60 years old when your term ends.
If you are self-employed or a business owner, you must be at least 21 years old and no older than 65 when your term ends.
Income
Your income will significantly influence your ability to obtain the two-wheeler loan of your preference. Your income will decide whether you receive the loan and its terms, including the EMI you will be required to pay and the duration of the payback period. If you have a decent income, you will be given a loan with a larger principal amount and a lower interest rate.
Credit Score
Whether you’re applying for a housing loan or a loan for a two-wheeler, your credit score will play a significant role in deciding the interest rate and loan amount. Your salary, financial history, and certain other credit statistics, such as the income-to-debt ratio, are considered to determine your credit score.Â
Whenever you contact a bank for a loan, it is generally among the initial things they look at. Maintaining a strong credit score is important before entering the marketplace for financing.
Work Experience
When you apply for a loan for a 2-wheeler, the lender will also look at your work history and steadiness in your employment. A person’s employment stability is established by looking at how long they have been employed at a certain position and whether they are likely to quit or go unemployed throughout the loan’s duration.
Salaried candidates must have at least one year of job experience.
Self-employed applicants have to provide a minimum of one year’s worth of financial records.
Documents Required for a Two-Wheeler Loan
The general documents required for a two-wheeler loan are as follows:
- Fully filled out and notarized loan application.
- Three passport-sized photos of the applicants.
- Age-verification documents include birth certificate, passport, driver’s licence, life insurance policy, PAN card, and Aadhar card.
- Proof of residency such as voter ID, utility bills, licence, notarized driver’s registered rental agreement, passport, updated bank passbook or account statement, and Aadhar card.
- Bank records over the past six months.
- Two-wheeler quotation.
Additional Documents Required by a Salaried Employee
Some additional documents needed from a salaried employee are as follows:
- Income Tax Returns, or Form 16.
- Salary Pay Slips for the previous three months.
Additional Documents Required by Self-Employed Applicants
Some additional documents needed from self-employed applicants and business owners are as follows:
- Income Tax Returns for the past two years, TRACES, and 26AS.
- Balance sheet, last year’s earnings calculations, and earnings and expenditures for the previous two years.
- Form 26AS from the previous two years, TDS Certificate, Form 16A, Income Tax Challans, and IT Assessment.
- Business documentation includes a Gomasta licence, registration certificate, or service tax registration.
Conclusion
Using a two-wheeler reduces everyday expenses and also decreases travel time. You might benefit greatly from taking out a 2-wheeler loan because it helps make your purchases much more inexpensive. Today, applying for a two-wheeler loan may be done quickly and easily. In India, you may apply for a two-wheeler loan from any location and get one approved in minutes. To ensure that consumers don’t forget their EMIs, several financial institutions have their personnel keep in regular contact with their customers, providing updates on plans and payment due dates.
