How do Loan Approvals Work for Two Wheelers?
Two Wheeler Loans 6 Months ago Comments Share
Are you looking for a loan to purchase a two-wheeler? With the fast pace of society, it is essential as well as convenient to own a scooter. It can not only increase mobility but can also save time in heavy traffic.
Almost every employed individual in India wants to buy a two-wheeler. Youngsters always dream of buying luxury bikes. A bike loan can well fulfill this. So, this article contains the step-by-step process of getting a two-wheeler loan. But let's start by learning about its advantages.
Why Should You Get a Bike Loan?
There are many advantages of buying a two-wheeler with a bike loan. Let's take a closer look at them.
- Bike of Your Choice: Taking a two-wheeler loan removes the budget constraints. Hence, you can buy the bike of your choice.
- Credit Score: Taking a small loan and repaying it within time can help you raise your credit score.
- Reduces the One-time burden: You do not need to pay all the money upfront. Instead, you can enjoy your bike and repay in parts.
- 100% Financing: Most lenders offer 100% financing. So, you do not have to bear even the margin money.
How Can You Get the Best Bike Loan?
If you do your homework correctly before applying for an online bike loan, then you can expect to get your loan approved quickly. Let's look at each step in detail.
Step - 1: Check Your Loan Eligibility
Will your loan be sanctioned or not? You can easily find the answers to this query by checking your loan eligibility. Generally, you require to fulfill the following conditions to be eligible for online bike loan approval.
- Age Limit: Generally, the minimum age for a bike loan is accepted to be 21 years. The maximum repayment age is taken to be up to 60 years. Although, a younger applicant is more likely to get quick loan approval.
- Monthly Income: Different institutions accept different minimum levels of income. Usually, the minimum income lies between Rs. 10,000-15,000 per month. Any person earning more than this amount is eligible to apply for a two-wheeler loan.
- Credit Score: If you have a bad credit history, then your application might be rejected. Usually, a credit score of 750 or above is considered good as it shows responsible credit behavior. You can ensure a good credit score by following these credit practices:
- Repay all your installments on time. Delay in repayment causes your credit score to drop.
- Repay your credit card bills on time. Credit Card dues affect your credit score the most.
- Try to utilize your credit card limits only up to 30%. The credit rating agencies ideally accept this.
- Avoid applying for too many loans at the same time. Frequent credit inquiries project you as credit-hungry. Hence, your credit score suffers.
- Keep track of your credit score. The major credit rating agencies provide one online credit inquiry per year for free. You can utilize it to monitor your credit report.
Step - 2: Select the Loan as per Your Requirements
The terms and conditions provided by each lender for scooty finance are different. You can select the best loan product as per your requirements. You should consider the following factors to ensure that you have opted for the right loan.
- Margin Money: Some lenders provide 100% financing, while others require that you bring in some initial margin money. Although it depends on your preference and budget, most people select the lenders giving 100% financing.
- Loan Tenure: Usually, the tenure of two-wheeler loans is 12-36 months. You can select the loan tenure as per your requirements and repayment capacity.
- Interest Rate: The two-wheeler loan interest rate is the most diversely quoted in all the personal segment loans. The interest rates range between 7% to 21% p.a. If you have a good credit score, you can negotiate the interest rate with your lender.
- EMIs: You need to repay the loan with monthly instalments called EMIs. It depends on the loan amount, tenure, and interest rate. Click here to check your EMI using an EMI calculator.
- Loan Charges: This is a significant factor. You should thoroughly check all the cost components before applying for the loan. There can be some hidden charges not disclosed earlier to attract customers. Usually, you incur the following costs for a bike loan:
- Loan Processing Charges
- Documentation Charges
- Stamp Duty Charges: Depends on the State Govt. policy
Apart from these, some lenders may also levy foreclosure charges if you repay the loan before completing the tenure.
Step - 3: Prepare the Required Documents for Two Wheeler Loan
If you want to secure instant bike loan approval without much hassle, you should keep all the documents ready before applying for the bike loan. Generally, the lenders ask you to submit the following documents:
Step - 4: Apply Online for the Bike Loan
Once you have compared all the two-wheeler loan products and selected the best bike loan, you can apply for the bike loan online. This not only reduces the time & effort but also makes the process smooth. Click here to apply for an online bike loan.
Step - 5: Documentation
The representative of your lender contacts you for the loan processing and documentation. He guides you through the process. With minimum paperwork required, you can expect to get the loan approval within a few minutes.
The documents are stamped as per the State Government's Stamp Act. You have to bear the consequent charges. Once the loan is sanctioned, you receive the sanction letter and repayment schedule.
Step - 6: Hypothecation of the Vehicle
Usually, the two-wheelers remain hypothecated in the name of the lender until you completely repay the loan. Hence, after purchasing the bike, you need to mention this in the RC application. Upon the arrival of the RC document, you need to deposit a copy to your lender to complete the documentation.
In a nutshell, you can easily get a two-wheeler loan by following the above steps. With Shriram City, you can enjoy the benefits of a hassle-free loan process, attractive interest rates, and instant loan approval. So, click here to take your first step towards owning your dream bike.
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