Two-wheeler loans are on the rise, especially after the entry of electric vehicles into the market. Consumers prefer two-wheelers for faster travel, easy maintenance, and time efficiency.
The rise in two-wheeler demand has consequently increased the demand for two-wheeler loans. However, consumers have certain preconceived notions when they consider two-wheeler loans. In most cases, lack of clarity stops consumers from applying for two-wheeler loans. Therefore, here are the expectations of prospective borrowers and what the reality holds for them.
Expectation: Too much paperwork will be required
Reality: Two-wheeler loans involve minimal paperwork. One only needs the following documents to apply for a two-wheeler loan:
Expectation: A two-wheeler loan takes up a lot of time!
Reality: Two-wheeler loan sanction and disbursal is a time-efficient process. Upon furnishing the specified documents, the lender will instantly take up the application for appraisal and decide upon the approval or rejection thereof.
Expectation: The interest rate on two-wheeler loans is soaring high!
Reality: The two-wheeler market is booming like never before, especially after the arrival of electric vehicles. Thus, lenders are offering two-wheeler loans at affordable interest rates. The two-wheeler loan interest rates start at just 11.40% per annum.
Expectation: The two-wheeler loan will have stringent eligibility criteria!
Reality: The two-wheeler loan has easy to fulfil eligibility criteria. One can apply for a two-wheeler loan if:
Expectation: I will have to furnish collateral security for a two-wheeler loan
Reality: The two-wheeler loan may be secured or unsecured. The choice rests with the applicant. In case of a secured loan, the applicant shall be required to furnish collateral security. However, it will consequently reduce the interest rate. If the applicant opts for an unsecured loan, then the applicant shall not be required to furnish the collateral security. However, a slightly higher interest rate may be charged in the case of an unsecured loan. Therefore, it's not necessary to furnish collateral security in case of a two-wheeler loan.
Expectation: There is no interest benefit for two-wheeler loans unlike home loans!
Reality: Generally, two-wheeler loans do not offer tax benefits like home loans. However, there are two exceptions:
Expectation: I will have to make at least half of the vehicle cost as a down payment before going for a two-wheeler loan!
Reality: Two-wheeler loans have a high LTV ratio. LTV is the loan amount financed by the financial institution against the asset value. Generally, institutions provide up to 85-90% of the on-road price of a two-wheeler as a loan. However, Shriram City has leaped further to benefit the borrowers with a 100% LTV ratio. Therefore, you can purchase your two-wheeler with zero down payment if your vehicle is eligible for 100% LTV.
Expectation: I won't be able to take a two-wheeler loan as I don't have a credit history!
Reality: Anyone who meets the eligibility criteria can secure a two-wheeler loan.
Expectation: I won't be able to get a two-wheeler loan if I fail to meet the eligibility criteria!
Reality: While meeting the eligibility criteria is paramount to getting any loan sanctioned, there is always a silver lining in the clouds. In most cases, income and CIBIL score are the criteria that applicants might fail to satisfy. In such a case, bringing a co-applicant or a guarantor can increase the chances of getting your loan sanctioned. Therefore, even if you fail to meet the eligibility criteria, then a co-applicant with a higher income and good CIBIL can help you get your loan sanctioned.
You can preplan your EMI with a two-wheeler loan EMI calculator. You just need to enter the loan amount, tenure, and two-wheeler loan interest rate to know the exact amount of EMI. Plan your budget accordingly with a two-wheeler loan EMI calculator.
As seen from the above, most of you might be relieved of the fact that two-wheeler loans are far easier to avail of than you thought. Fewer formalities, minimal documentation, and faster processing are what borrowers look for when applying for any loan. So, if you wanted to purchase a two-wheeler but were holding back due to any of the above expectations, then clear out all your preconceived notions and jump into reality. Get your two-wheeler now with Shriram City looking after the finances.