The best way to buy a bike would be to pay the entire amount in cash. However, since that’s not always possible, we rely on loans to fund the purchase.
Unlike the earlier days, getting a Two wheeler loan is now considerably easy. The simplified process speeds up the transaction. You can own your favourite bike without much hassle if you are eligible for a loan and have all the necessary documents.
But how will you decide which loan would be more suitable and how much the loan amount should be? What other factors should you consider when applying for a loan? Let’s take a look.
Secure or Unsecured Loan
You can get a bike loan in two ways. A secure loan is the one provided with collateral. You’ll pledge an asset worth the same value as the loan amount. An unsecured loan is one where there is no need for collateral. Most bike loans are unsecured, though you can pledge collateral if you want a loan for a lower interest rate. Use the two wheeler loan EMI calculator to check how much EMI you pay per month for the given interest rate.
Do You Have the Essential Documents?
Read the eligibility criteria and the list of necessary documents carefully before you apply for a loan.
What’s Your Credit Score?
A credit score is proof of your commitment to repaying your loans. It can be a deciding factor for unsecured loans. In India, the credit score is calculated on a scale of 900. The calculation is based on:
- The total number of loans you’ve taken
- The total number of payments you’ve made
- The total number of payments you missed
- The total loan amount
It’s easier to get your two wheeler loan approved if you have a good credit score (which means you’ve been making payments on time for the past loans).
Processing and Prepayment Fee
There will generally be a nominal fee to process the loan and foreclose the loan if you decide to pay it back before the tenure. The fee ranges from 1-3% of the loan amount.
How Long Do You Want to Repay the Loan?
A bike loan is usually short-term and lasts for a year or three. The loan period can go up to 36 months or three years. The EMI amount will be less if you opt for a longer tenure. However, it also means you’ll have to pay slightly more interest. An apt way to decide is to use the Bike Loan EMI Calculator found on the Bajaj Auto Finance website. Try many combinations and choose the one that suits your budget.
Bajaj Auto Finance provides stress-free online loans for up to 100% of the bike’s value. If you want a bike but cannot arrange money for the initial down payment, you can still buy the bike by applying for a 100% loan. All you need to have is a good credit score and a stable income to repay the loan. Check out the website today!