Applying for a two-wheeler loan requires a solid financial strategy to help you make the right decision and manage your finances responsibly.
Many financial companies offer easy bike loans at affordable rates- these loans are the best option for those who don’t wish to dip into their savings. However, the challenge lies in knowing what to consider before applying for a loan.
In this guide, we will explore some essential considerations before you apply for two-wheeler funding.
Read on!
Key Considerations Before Applying for a Two-Wheeler Loan
Taking any loan has an impact on one’s finances. So it is imperative that you carefully assess all parameters before applying for one.
Bike loans can have varying interest rates, repayment periods, and eligibility criteria. To help you navigate these complexities, we have noted some key pointers that you need to consider to make informed decisions:
Eligibility
Before applying for a loan, you need to assess if you meet the eligibility criteria of your lender. Lenders usually consider factors like income and age of the applicant. Ensure that you fall in this bracket before putting in an application.
These details are often available on the financer’s website. So make sure you go through it carefully to make sure you fulfil their eligibility requirements before applying for a loan.
Loan Amount Required
Be clear about the loan amount required. Lenders may offer you a large part of the bike’s value as a loan. However, always borrow an amount you can comfortably repay.
A higher loan amount may not be ideal as it implies a higher EMI. On the flip side, if the loan amount is too low, you would have to put in a bigger deposit.
Assess your comfort levels using the two-wheeler loan interest rate calculator available online. You can also use this to check what equated monthly instalments (EMI) you would be paying for different tenures and loan amounts.
Credit Score
Another aspect that lenders consider while evaluating a loan application is the borrower’s credit score. A good credit score qualifies you for benefits like lower interest rates and better terms. This is why it is advisable to repay all previous loans promptly.
Loan Tenure
Always evaluate the tenure of the loan before applying for a loan. A higher period may seem tempting as you will be paying lesser EMI, however, it also implies a higher overall interest cost. Weigh the impact of this before deciding your loan duration.
Interest Rate
The interest rate determines the cost of finance and your EMI. A lower interest rate can considerably impact your total cost. Go with a lender that isn’t charging you too much interest.
You can use a two-wheeler loan interest rate calculator to estimate how different interest rates would affect your monthly EMIs and the overall cost of the loan.
Processing Charges
In addition to interest costs, a borrower needs to pay processing fees. These are one-time charges and are a percentage of the loan amount. The cost can vary from one lender to another. You must account for this while calculating your total expenditure.
Make sure your lender does not levy any charges for early or part repayment of the loan. Furthermore, you need to check for any additional fees that might be associated with the two-wheeler loan to ensure you have a complete understanding of the loan’s total cost.
Other Factors to Consider
Apart from these main considerations, there are other points you must keep in mind while taking a bike loan.
Processing Time: You will find that many financers offer a quick turnaround time for two-wheeler loans. From loan application to disbursal, the entire process is very smooth. Choose a lender that offers a quick process to ensure you have a smooth experience.
Tax Benefits: You can avail of some tax benefits if you purchase a bike for business use. Whether you are a business owner or a self-employed person, you can enjoy the benefits of these breaks. Keep these in mind while taking a loan.
Other Benefits: Lenders offer additional benefits along with the loan at times. These include online applications, insurance coverage etc. Research properly and use this to your advantage when applying for a loan.
Conclusion
In today’s landscape, you can experience the freedom of owning bikes on loan with easy loan options. These loans offer a swift and efficient solution tailored to fulfil your requirements. Nevertheless, before embarking on this journey, study all factors associated with the loan, compare different loans, and rely on a trusted lender like Hero FinCorp to guide you through the process.
