If you’re considering purchasing a scooter or bike and need additional funds, getting a two-wheeler loan online can be a viable option. However, before applying for a loan, it’s essential to consider several factors to ensure you make the right decision. In this article, we will discuss the five key considerations you must keep in mind when acquiring a two-wheeler loan.
Credit Score
Your credit score is a crucial factor to consider when applying for a two-wheeler loan. Lenders evaluate your bike loan application based on your credit score, which is determined by four primary factors.
- The total number of loans you’ve taken.
- Your cumulative loan amount.
- The number of prompt payments you’ve made.
- The number of payments you missed.
India assigns a 900-point credit score to every borrower. For a two-wheeler loan eligibility, you must have a good credit history. Most lenders offer online two-wheeler loan approval.
Loan Type
Two-wheeler loans, like other types of vehicle loans, can be classified into two categories: secured and unsecured. Secured loans necessitate the provision of collateral in the form of an asset that is either equivalent in value or greater than the loan amount. On the other hand, for unsecured loans, lenders do not require any collateral or other valuable assets as security for the loan amount.
How long does your loan last
The loan tenure is the third crucial factor to consider when looking for the best two-wheeler loan. However, it’s worth noting that opting for a longer loan tenure generally results in a higher interest rate. The best idea is to analyse your repayment capacity and other financial obligations and choose the most adept tenure for you.
Interest Charged
Lending rates for loans can either be floating or fixed. Floating interest rates tend to vary based on market conditions, outstanding loan amount, credit score, and the number of payments made. However, two-wheeler loans usually come with fixed interest rates. This means that the interest rate agreed upon by the lender and borrower at the time of signing the loan documents remains constant throughout the loan repayment period.
Documents Required
Given below are the required documents for salaried and self-employed professionals for two-wheeler loan eligibility.
For professionals who receive a salary:
- eKYC documents – Aadhaar Card, PAN Card, Voter ID, etc.
- Proof of income such as a pay stub, an income tax return, and the most recent bank statement.
- Canceled check and passport-sized photographs.
For professionals working for themselves:
- eKYC documents – Aadhaar Card, PAN Card, Voter ID, etc.
- Proof of income including an income certificate, an income tax return, and your most recent bank statement.
- Canceled check and passport-size photographs.
Fulfilling your desire of owning a bike can now be a reality with the help of the best two-wheeler loan available from financial institutions. However, before applying for a loan, it is crucial to carefully consider the factors mentioned above and choose the option that best fits your needs. By doing so, you can ensure that you make an informed decision and enjoy the benefits of a suitable two-wheeler loan.
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