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March 30, 2023

Critical Things to Know Before Submitting an Application for a Bike Loan

If you have decided to purchase a two-wheeler, you can buy it with a bank loan. Buyers can obtain a loan in two ways. Firstly, you can apply for a personal loan at your bank. Secondly, you can apply for a loan that has been specifically offered to two-wheeler buyers. Choosing a personal loan from a bank or a financial company is hassle-free. You do not have to show any specific reasons for the loan. However, the personal loan amount will be low. Moreover, the interest rate will be high on such loans. Many borrowers choose bike loan in India for these reasons.

Where Can You Apply for a Bike Loan?

You have multiple options for a two wheeler loan. However, approaching a bank is the best thing to do. The banks offer loans with a low-interest rate. Moreover, the banks offer flexible loan repayment tenure. As a result, life remains easier after obtaining a two-wheeler loan from the bank. Instead of approaching a bank, you can also contact a financial institution for a motorbike loan. In the following section, you can find lenders’ factors before approving your loan application.

Crucial Things to Know to Apply for a Bike Loan

Type of Vehicle

Loan approval depends on the type of vehicle that you want to purchase. You cannot purchase a four-wheeler vehicle with a two-wheeler loan. Similarly, most lenders offer loans for new vehicles. Therefore, you cannot use the loan amount to buy a second-hand vehicle and keep the remaining money in your account.

The loan interest may fluctuate depending on the type of vehicle you choose. Choosing a luxurious superbike will make your loan repayment difficult due to the high-interest rate. Therefore, people with low and medium incomes should purchase a daily commuting motorbike for a low-interest rate.

Source of Income

The most crucial thing that lenders take into consideration is the source of income. The income source helps the lenders understand your ability to repay a loan. Therefore, the lender will seek employment-related documents from the applicants. Failing to provide those documents will lead to the loan application rejection.

Typically, a salaried person gets a loan easily due to job stability and a fixed monthly income. But, it does not mean that non-salaried people cannot get a bike loan. Banks and other financial institutions also offer motorbike loans to non-salaried people. However, they ask for last year’s ITR certification to assess your financial ability to repay a loan. Before applying for such loans, you must know how to check bike EMI status.

Down Payment

The loan approval depends on your ability to make the down payment. The down payment is an upfront cost that people have to pay for purchasing two-wheeler vehicles. For example, you may have to pay 20-50% of the overall motorbike’s value as the down payment. The remaining amount will be funded through the loan.

Do you have the financial ability to pay the vehicle’s down payment? Your loan application will be rejected if you fail to make the down payment. Therefore, lenders should arrange the down payment before applying for a loan.

Age and Location

Age is a crucial factor in approving a loan application. The lenders approve loans to those who can repay the loan without facing age-related obligations. For example, a person approaching 60 years is about to retire from the job. Therefore, repaying the loan can be difficult for such people. On the other hand, a 30-year-old loan applicant can easily repay the loan since he will have a job for the next 30 years.

The location of the applicant is also a big factor in lending. You must pay a high EMI if you live in a tier-1 city. For example, interest on a bike loan in urban India is higher than interest in rural regions. The government banks offer two-wheeler loans easily in semi-urban and rural areas. Since these regions do not have top-class public transport similar to the metro cities, the public sector banks offer motorbike loans easily to the applicants.

So, these are the crucial factors you must know about two-wheeler loans. You need to find a trusted lender to get a loan to buy a new two-wheeler. Checking the loan calculator will help you how to check bike EMI status.

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