A two-wheeler loan can help you in many ways apart from the freedom to buy your dream bike any day you want. While many of us think buying a bike with the help of financial support might not be a good idea and choose to wait or pay the total amount, there are some compelling reasons to take out a loan. Read on to understand why it makes sense to opt for a loan.
Let us confess; there have been times when you just wished you had your dream bike and you would have all the fun in the world. Late-night rides or monsoon trips, be it the adrenaline rush of age or the celebration of the first salary, starting from adulthood, through college, and beyond, a two-wheeler comes to rescue many times, making it an all-weather vehicle. It is a great feeling to own a bike, and low bank balance or financial barriers shouldn't be why you postpone your plans. Moreover, this borrowing has many more benefits, and you should consider taking one when you plan to purchase a bike. Let us walk you through them:
You may be a professional or a self-employed individual; you can use various benefits in either case.
As a professional, you can take a rebate of interest on the money lent under tax deductibles when you file your income tax return. This rebate is possible when you have an active vehicle loan.
If you are self-employed, you can purchase the vehicle in your company's name. This allows you to save and take rebates on many other expenses apart from loan EMIs, such as insurance cost, fuel cost, and maintenance cost, some of which may account for depreciation benefits and reduce your tax liability.
Lending companies function under the Reserve Bank of India (RBI), making them safe, secure and transparent for borrowers. All the charges, EMI payment schedules are clearly explained before the loan is approved. At Shriram City, you also can choose a flexible payment plan from 12 to 36 months. And if your credit score is good, you can get the money at a better interest rate.
The bike or scooter you wish to buy may be well outside your current budget. Time is of the essence, and waiting is something we all hate in this situation. The finance company can be the friend in need.
You can choose a payment plan at your convenience, and with tax benefits in play, you will hardly notice a dent in your savings!
Emergencies arise unannounced, and when they do, if your bank account is doing good, the stress level can be contained, at least from a financial point. When you buy a bike on finance, you not only keep your savings in the account, but you are also making sure you don't dig into emergency funds. This is a good strategy and can be of great help in dire situations.
Competition is good for customers, and with interest rates becoming more competitive, you always get very good schemes. You should choose the lender who provides quick service, instant money disbursal and is transparent in charges.
At Shriram City Union Finance (SCUF), you can get a loan at highly competitive interest rates.
Opportunity cost (things you could do with the same capital, had you not used it to make the purchase) is big when you pay to buy a high-price product out of your pocket. Let us take an example: Imagine you purchase a bike, and the total expenditure is 1.5 lakh. Now, if you pay the full amount, you are instantly short of 1.5 lakh from your account. You won't even earn savings account interest. Instead, if you make a down payment of 30k and take out a loan of 1.2 lakh at an interest rate of 11.5% for a year, you will have to pay approx 1.28 lakh at the end of a year via EMIs.
This means you have about 1.2 lakh, which is free and available to be invested. There are various assets like ETFs, mutual funds, which can give well over 15% return on an annual basis and if you invest right, you might recoup a lot more than 15%. You can invest the free capital and make the best use of the hard-earned money while still riding the newly acquired bike! Isn’t that a good plan?
When you borrow from a lender, you also plan to repay it. This helps you plan your expenditure to strike a balance with savings. Having financial discipline goes a long way. It helps you pay a loan on time and plans for various situations and other big-ticket expenses in life such as a child’s education, marriage, vacation, retirement, and so on.
If you take out a loan and pay it on time, you are eligible for a higher amount and at a better interest rate next time. It is this simple. You may think that since purchasing a bike is possible without a loan, it might not be required to get it financed. Let’s think again. Today you are planning to purchase a two-wheeler, in a couple of years you might plan to buy a car or a house. Both of these will require a considerably higher amount of capital than a bike, and when you plan to buy these items, you will very likely do it with the help of financing. Now when you apply for a loan, your credit score is used to determine the interest rate. The higher the credit score, the better the interest rate and the lower the EMI. So if you take out a loan and pay it on time, you tend to show good financial behaviour, leading to an improved credit score.
At Shriram City Finance Company (SCUF), we offer different tenure for two-wheeler financing. The duration can range from 12 to 36 months. The interest rates start at just 11.5% p.a. A salaried person can apply for a loan within a year into the job with a salary as low as INR 12,000
Getting a bike loan at Shriram City is quite easy with the application process in multiple languages with minimum documentation required. The loan approvals are quick, disbursement is instant, and the process is entirely online. You can read all about the eligibility, documentation required and charges here. You can apply for the loan here. While you can get the loan at any credit score, we advise you to keep a healthy credit score to get the best interest rate.