Applying for a Motorbike Loan: You can consider purchasing a two-wheeler if you cannot afford a four-wheeler. Besides daily transportation, a two-wheeler is a perfect option for flaunting style statements. A motorbike is essential for many people, including students and professionals. Using mass transportation in India is a time-bound thing. Therefore, many people use private vehicles for safer and quicker rides. While the four-wheelers are expensive, you will find many affordable options for the two-wheelers. Moreover, you can purchase a bike on installment by Applying for a Motorbike Loan.
So, what are the things to know before Applying for a Motorbike Loan? In the following section, you’ll find a complete guide to the bike loan application for Applying for a Motorbike Loan.
1. Your Eligibility Criteria for Applying for a Motorbike Loan
Anyone can apply for a bike loan, provided your age is over 18 years. However, age is the primary criterion, and lenders assess borrowers’ eligibility on many factors. For example, the applicant should have a stable source of income. You will not get a loan if you are unemployed, a homemaker, or a retired professional. Before lending, the lender will assess your ability to repay the loan. Therefore, your income status plays a significant role in this process.
Besides a stable income, the lender may check the following eligibility criteria before offering to apply for a Motorbike Loan.
- Property: You enhance your chances of obtaining a loan if you have a property in your name. The chance of loan approval decreases if you live in a rented property.
- A Good Credit Score: A good credit score is essential for obtaining a modest bike loan interest rate. A credit score above 750 increases the chance of loan approval.
- Employment Type: The lenders offer loans to salaried people. Your loan approval chances decrease if you are a self-employed person.
- Marital Status: The lenders also inquire about your marital status, though it is not a big factor in obtaining a bike loan.
2. Know the Loan Types Applying for a Motorbike Loan
If you are interested in knowing the bike loan interest rate, you should know about the types of loans available. In the following section, you can find a guide to different lenders for bike loans.
- Bank: The most convenient place for obtaining a bank loan is the bank. You can visit the bank and apply for a loan to purchase a motorbike. After determining your worthiness, the bank will make you an offer.
- Lending Companies: Banks may reject your loan application for various reasons, and a poor credit rating can be one of them. However, you can approach a lending company if the bank turns down your loan application.
- Online Lenders: You can find many online-based lenders nowadays. Such lenders offer a reasonable loan amount to salaried and non-salaried personnel. However, such loans may feature high-interest rates and certain hidden charges.
3. Type of Bike You Want to Purchase
The banks and other leading financial companies offer loans depending on the type of vehicle you want to purchase. For example, if you need a motorbike, you can easily get a loan in such cases. But, obtaining a loan can be difficult if you want to buy a luxury bike. So, it would help to choose a motorbike depending on your income profile.
4. KYC Documentation and Verification Applying for a Motorbike Loan
When you apply for a bike on installment, you have to undergo a KYC test. Most lenders conduct KYC verification to check a person’s financial background. For the KYC verification, the application should provide the following documents.
- Government-issued ID or passport
- PAN card
- Phone number
- Income status and salary statements
- Bank statements
The lender decides your loan repaying ability after obtaining these documents. The lender turns down a loan application if the applicant has furnished the wrong information.
5. Understand the additional charges Applying for a Motorbike Loan
Before completing your loan application, you must understand the hidden costs and additional charges associated with a loan. For example, many lenders feature transaction fees ranging between Rs. 100 and Rs. 2000. every borrower would like to pay a minimal transaction fee. However, besides the transaction fee, you will find many hidden charges associated with buying a bike on installment. Therefore, the borrowers must identify them and avoid the lenders with multiple hidden charges.
6. Arrange the Down Payment
Most lenders do not offer a loan that covers the overall vehicle’s value. Typically, you can get a loan of up to 70–80% of the vehicle’s value. The remaining money should be arranged and paid to the seller as a down payment. Borrowers should search for lenders offering loans that cover the maximum value of a vehicle.
So, these are the factors that you should keep in mind while applying for a motorbike loan. The bike loan interest rate varies from one lender to another. You need to find a lender that features low interest and a flexible loan repayment schedule. You can use a motorbike loan calculator to check the monthly EMI for a particular loan amount for a specific period.
