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How to Apply for a Loan For Two Wheeler Successfully In 2021

Taking a loan for two wheeler in 2021 has become a lot easier. There are a lot of banks and NBFC’s that provide motorbike loans with repayments in easy installments and attractive interest rates. A two-wheeler loan is a type of financing that enables you to purchase a two-wheeler without straining your finances. These loans are secured by collateral too through hypothecation of the bike to be purchased.

However, if you need financing for a motorcycle or a scooter, you must pre-plan repayment strategies ahead of time. You should be certain about how much funding you will need for your two-wheeler and how much you can afford each month as EMI payments.

You can obtain a loan for two wheeler in a variety of ways. These points can make the entire process easy:

  • You can apply with a lender of your choice: Many lenders offer zero processing fees, free accessories, or insurance, and even free or reduced interest rates.
  • Be eligible: If you are eligible, you can negotiate the terms with the lender to get the best rate and other favorable terms on the loan.
  • Keep all documents ready: Before applying for a two-wheeler loan, you should have the required documents ready for submission as and when needed.

Why Take a Loan for Two Wheelers?

There are many benefits to applying for a loan in order to purchase the bike of your desired make and model.

Here are some of them to recognize:

  • You can get the entire funding you need for the bike of your dreams through 100% bike financing.
  • It gets easier to avail funding that you need if you apply with a co-applicant or guarantor holding high creditworthiness.
  • You can avail affordable interest rates on your bike loan, which makes it convenient to manage your repayments and save on unnecessary expenses.
  • There are many loans repayment options to choose from.
  • It is possible to improve your credit score if you pay your EMIs in time and in full.

Important Documents Needed to Avail a Bike Loan:

  • ID proof: PAN card, voter ID card, passport, driving license, etc.
  • Address proof: Voter ID card, passport, driving license, utility bills, etc.
  • Proof of income for salaried individuals: Last 3 months’ salary slips, ITR of past 3 fiscal years, bank account statements of at least 6 months
  • Income proof for self-employed: Bank statements of at least 6 months, ITR of 3 fiscal years, audited financial statements

Things to Consider Before Sending Your Bike Loan Application

These tips will help you get the right loan affordably and on favorable borrowing terms.

  • Research is key: Before applying for a motorbike loan, do your research.
  • Compare the varied loan options offered by different lenders.
  • Compare interest rates, processing charges, repayment options, as well as other terms.
  • This will allow you to choose the most affordable option.
  • You should choose your tenure carefully: The term of your loan will affect how much you must repay each month.
  • Likewise, you must ensure that you have the funds to pay your EMIs.
  • A shorter-term will allow you to repay your loan more quickly.
  • However, your EMIs may be higher with long tenures.
  • Financial stability: You need to be certain about your monthly expenditure, so you face no issues to clear your monthly EMIs.
  • Compare between fixed and floating rate lending systems: Depending on the lender, you might be offered options to choose between fixed and floating rates of interest.
  • A floating rate of interest changes according to changes in market rates.
  • Market rate changes do not affect fixed rates.
  • Floating rates, however, are generally lower than fixed rates by a few notches.
  • Calculate your EMIs before you apply: Compare your loan options and make sure to compare the respective EMIs before finalizing your loan option.
  • It is wise to select a loan option with easy EMIs and tenure flexibility for affordable repayments.
  • Enquire about pre-closure charges: If you are planning on prepaying or closing your two-wheeler loan account at any point before the tenure ends, enquire about the fees involved.
  • While some lenders might charge a fee, others may not.

Tips to Complete a Two Wheeler Loan Application Successfully

Sometimes, loan applications sent by certain individuals get rejected. This is certainly not a good experience and can impact your credit score negatively too.

The following list contains tips that will help you successfully apply for a loan for two wheeler.

  • Assess the exact amount you need: Determine your funding needs and figure out how much money is needed to purchase the bike you want. Do not apply for a loan amount that is more than what you really need.
  • Review your credit score: Credit score is one of the most important factors that affect loan approval.
  • Check with the lender to see if your credit score is sufficient.
  • Generally, applicants with lower credit scores face more rejections by lenders due to increased financial risk.
  • Before applying for a loan, take measures that can help improve your credit rating.
  • Fill out your loan application precisely: Be sure to include all details required by your lender. Submitting application forms with inaccurate details may increase the chances of rejection.
  • Send all necessary documents: Before you submit your loan application, be sure to include all documents required by the lender.
  • Failing to submit necessary documents may result in the rejection of your loan application.
  • Apply with your existing lender: Applying for a loan with your existing lender increases the chances of your loan approval even though you don’t meet all their requirements.
  • As you are an existing customer, few lenders may overlook your application’s shortcomings because of your good relations with them.
  • It also helps eliminate lengthy paperwork requirements as your important documents are already available with your lender.

If the above-mentioned points are followed accurately, then availing a loan for two wheeler becomes easy for your desired bike purchase. In addition, be sure to choose a bike model that is a balanced combination of affordability and performance so your expenses on the vehicle are kept in check, eliminating unnecessary costs.

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