What are the Advantages of a Two-wheeler Loan
A motorbike is an affordable vehicle that can tackle the busiest streets and daytime crowds. Therefore, most Indian families own a bike to enjoy quick and convenient transportation. A bike is a day-to-day solution for dropping your kid at school, running errands, or covering a shorter distance through busy roads.
It can also greatly support adventure lovers who enjoy off-roading or bike trips. A two-wheeler can meet all your necessities, except it cannot carry more than two people. Despite the multiple advantages, a bike comes at a high price. Thus, a two-wheeler loan could help you get your dream bike. With an affordable two-wheeler loan interest rate, everyone can afford a bike.
What is a two-wheeler loan?
A two-wheeler loan is an unsecured form of personal loan for purchasing a bike. Generally, banks or other financial institutions offer this type of loan against essential documents like ID, age, address, income proof, ITR papers, etc. The interest rate the lender adds to the principal amount depends on how long you have had the loan and your credit score. A two-wheeler loan helps you get your dream bike by requiring you to pay a fixed amount as an equated monthly installment.
After you make the down payment, the rest of the payable amount is equally divided into the number of months in the tenure. Until your dues are cleared, you get the hypothecation of the vehicle. Once you have paid all the EMIs towards the repayment of the bike loan, you get ownership of the bike.
Why should you go for a two-wheeler loan from a reputed bank?
There are multiple finance companies and different types of banks that offer two-wheeler loans. However, you must always go with a reputed bank or lender for such a loan. For several reasons, you must go with a reputed bank for a two-wheeler loan. Here are some of them-
Interest rates are budget-friendly
As bike loans are unsecured, which means they don’t require collateral, the interest rates are generally higher. When you opt for a reputed bank for a loan, there are more chances of getting many affordable options for a two-wheeler loan interest rate. Unlike other banks, reputable ones are also very accommodating. They give you a chance to bargain for the interest rate if needed.
Very minimum processing charges
For banks to process and approve your loan application, they have to pay an administrative cost, which you will have to pay back. A processing fee is a trivial amount that is different for each bank. Processing fees generally are about 0.5% to 2.50% of the total loan amount. Although a processing fee varies from bank to bank, with a reputed bank or lender, the processing fee is minimum so that it doesn’t affect the loan EMI.
Attractive Loan amount
When you apply for a bike loan, you must focus on the amount you are borrowing. Not all banks offer you a high loan amount. With most banks, there is a maximum amount you can apply for as a loan. A reputable bank will provide you with a maximum loan of up to 10 lakhs to meet your motorcycle needs. With such a large loan, you can choose any bike with cutting-edge technologies and mechanisms. You can even fulfill your dream of having a superbike.
Faster Approvals and payment
The best thing about a two-wheeler loan is that it requires less documentation than other types, such as a home loan. A reputed bank approves your loan with the bare minimum of essential documents. Whether salaried or self-employed, you’ll need some basic documents to get the loan approved. The documents you will need are-
- Duly filled loan application form with passport-size photograph,
- Photo ID along with age proof like an Aadhaar card, Passport, or Driving License
- Address proof (Aadhaar card, Driving License, Passport, Voter ID, bank statement or passbook, Electricity Bills, rent agreement)
- Last 6 months’ bank statements
Salaried individuals must submit income and employment proof, i.e., the past 6 months’ salary slips or salary certificates, and ITR Form 16. Employment proof will be the job letter of the current job.
If you are self-employed, you must submit additional documents such as your income tax return documents, a TDS certificate, proof of company address like the office’s electricity bill, an SME registration certificate, or property documents. Also, you need to prove the existence of your business by providing the bank with a business registration certificate, tax registration documents, etc.
Easy Acquiring
The problem with loans is that they take too much of your time and patience to be approved. If you opt for a reputed bank for two-wheeler loans, it’s easy to avail if you are between 21-70 years of age, are eligible for an ITR, and have submitted all the required documents.
Flexible tenure to repay the loan
Generally, banks offer a fixed tenure to repay the loan amount with the two-wheeler loan interest rate. A reputed bank offers affordable EMIs that help you pay the loan despite your finances. With a long tenure period, your EMIs get smaller and easier to pay every month. Also, flexible EMIs allows you to select an EMI plan according to your financial condition.
Get tax benefits for business use.
If you’re self-employed and purchase a bike with the loan amount you plan to use for business purposes, you can claim tax benefits. Under Section 80C of the Income Tax Act, 1961, you are eligible for a deduction for two-wheeler insurance, loan repayment, fuel costs, and maintenance from your taxable income. However, this does not apply to a vehicle that is used personally.
Improves your credit score
A credit score is a reward you obtain by paying all your dues, bills, and debts on time. The regular, successful payment of the EMIs for a bike loan helps you significantly increase your credit score.
Conclusion
Two-wheelers are the most convenient means of transport in India. With the easy availability of a two-wheeler loan, you can now own a bike or scooter. If you go with a reputed bank for a two-wheeler loan, you might face fewer hassles, and their customer service is prompt and efficient.
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