A loan is debt acquired from an individual or an organization, on the promise of repaying the debt after a certain amount of time. This loan is provided by the loaner for a specific interest rate on the principal amount, for the time till the person who has received the loan, repays the total sum. This loan is provided based on the assets, submitted by an individual for a specific period of time, for security reasons.
Two wheeler industry is considered to be one of the largest industry in the world. Each and every individual in the world, almost owns a two wheeler. Be it, a minimum CC bikes or high end models, which gives more CC. Since the transportation is made easy, with the help of the two wheelers, the selling percentage of these vehicles also increase, day by day.
The bike with minimum CC starts from INR 40,000 and ranges to over a crore, depending upon the brand and CC its providing. Nowadays, these two wheeler loans are easy to acquire and almost each and every banks are providing its customers, with two wheeler loan. Even though, the rate of interest seems a little high for super bikes or high end models, it can be easily applied for and received.
Types of Bike Loan:
When you are planning on opting for a bike loan, it is necessary for knowing the types of Bike loan that are available.
They are as Follows:
- Secured Bike Loan: In this type of bike loan, the requester of the loan or an individual who is applying for a loan, should produce some security or immovable assets document, in return for the loan. Once the individual pays the principal amount, along with the interest rate, he or she can get their assets document back from the loaner. This kind of loan is known as Secured Bike loan.
- Unsecured Bike Loan: This type of bike loan does not require, the individual to submit any proof of asset, however, the interest rate are too high. You will be paying more for the bike with this loan, than what the actual price is. Since the individual, who are applying loan for the first time, will find it difficult to get a secured bike loan, this is the only option available for them.
Step by Step Procedure for getting a Bike Loan:
- Step 1: Before you are planning to apply for a bike loan, you should check your credit score. If debt in your credit card is high, then there is possibility that your loan might get cancelled. Lenders who are providing money for the two wheeler purchase, have strict rules, since loan for vehicle is a risky business. This is due to the fact that the two wheelers have higher chance for theft. The proofs submitted for getting this loan should be without any mistake.
- Step 2: When you are thinking of applying for a loan, you should first decide the budget, that you can afford, even when you get loan. Individual should remember that, when they are deciding to purchase a vehicle, first 10% must by paid to the vendor as cash and the rest can be applied as loan. Always decide on the budget considering the fact that if it is possible for you to make the payment within the specified period of time and if the monthly installments are not too affordable.
- Step 3: Including this, also try to avoid common mistakes that are done by the individuals applying for a loan. Ask lot of question about the loan to the loaner in order to get a clear picture. Do not let yourself to borrow way too much, so that you can’t afford the loan or when you are planning on opting for a credit card motorcycle loan.
- Step 4: Make sure you are comparing all the options available for getting a loan. You have to compare the interest rates, time period taken to sanction the loan, etc. Including this, there is also an option called as Original Equipment Manufacturers for high end model vehicles. You can also purchase your vehicles, with the help of the credit cards, which is considered more beneficial since there are no credit checks, financing applications or pre-payment penalties.
- Step 5: Once you find the perfect option, finalize the bank in which you are willing to opt for a loan.
- Step 6: You have to know that you can also opt for a bike loan through online and offline mode. In online mode, you can sit in the comfort of your home and apply for a loan. However, offline mode involves paperwork, submission of documents, etc.
- Step 7: Another important factor for consideration will be the eligibility criteria which include age limit, monthly income, permanent address, credit score, etc.
- Step 8: Also you have to keep in hand the documents required while applying for a bike loan. The documents are Passport, Driving License, Voter ID, Aadhaar Card, PAN Card, Passport size photo of the applicant and employment proof.
The interest rates for bike loan may vary from 11% to 18.25%. When you are opting for the low interest rate you also have to look into other possible fees like Processing fee, pre-payment fee, post-payment fee, administrative fee, etc.