How To Choose The Best Two Wheeler Loan?

Indian motorcycle brands keep on hiking the prices of their bikes. This poses a threat for motorcycle enthusiasts.

A bike lover or enthusiast can apply for a two wheeler loan as countless lenders offer unique financial products in India to get the bike of their dreams.

But how can one choose the right bike loan and related financial products like a no-down payment loan?

To choose the right lender, a borrower needs to understand a few things about what the lender is offering.

Follow the tips mentioned below to understand how to choose the right two-wheeler loan -

There Is No Alternative to Research

A borrower should take some time out and research the lenders available. The borrower should go through the financial products and services the lenders offer. They should also look into the track record of the lenders.

It is advised to avoid lenders who recently opened up for business. Applying for a bike loan at a lender operating for a while is ideal.

A lender's research will also reveal the estimated application processing time needed and the processing fee the lender charges.

Applying For a Limited Loan Amount Is Ideal

Lenders will try to lure the borrower. They would offer loan schemes that would allow the borrower to buy an expensive bike. This means that the borrower would need to borrow a large sum, which is not ideal. The very essence of borrowing money for a motorcycle is to keep it from becoming a financial liability. The large sum borrowed from a lender will come with steep EMIs and interest rates.

In the case of a zero down payment, one must remember that this category of loans comes with high-interest rates. The EMIs will be steep, and it will only add to the financial worries of the borrower.

An expensive bike will also come with a high ownership cost. The maintenance cost of the bike will be high. The cost of spare parts for the bike will be exorbitant.

Furthermore, an expensive bike will also consume more fuel as they usually come with engines over 200 – 300 CC displacement.

In the end, the borrower will only be adding to their financial burden – a simple case of cause and effect.

Interest Rates Depend on The Following Factors -

Lenders will offer borrowers low-interest rates on bike loans if and only if –

> The loan applicant has a stable source of income.

> The loan applicant is in the suitable age group (consult with a finance expert for more details)

> The loan applicant has been with a company as its employee for more than three years.

> The loan applicant owns a business, and the venture has a strong credit history.

> The personal credit history and CIBIL score of the loan applicant are excellent.

> There could be cases where the aforementioned criteria are met yet; the applicant is still being offered high-interest rates.

> The loan applicant should then choose a lender that offers services but charges minuscule Annual Percentage Rates.

> Before making the final decision, a borrower must use a bike loan EMI calculator tool for best results.

Closing Statement

The loan applicant should make sure that all documents about the loan are read thoroughly before signing them. It will clarify that the terms of the loan are on par with the borrower's requirements. If the terms are not favourable, they should be brought to attention as soon as possible. For more details, consulting with a finance expert is strongly advised. It is important to look at all the details in your contract before signing up for the loan. Always be updated on the EMIs as you apply for a two-wheeler loan.