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Two Wheeler Loan In India
Whether you just took an admission to your dream college or you want to manage your everyday conveyance comfortably, everyone desires to have their own two-wheeler parked in front of the house. Going to college or office through public transports consumes a lot of time; therefore, two-wheeler is an ideal option to commute either through busy roads or the narrow town streets. But, as the price of everything is hiking steadily, it is quite tough to manage a balance between income and expenses.
Even in this scenario of inflation, it is easy to make our dreams come true as there are several banks and non-banking institutions offering two-wheeler loans at affordable interest rates. Buying a vehicle is a long-term investment and thus, it makes no sense to compromise with the choice.
Although two-wheelers are nowhere as expensive as four-wheelers, still they can put a financial dent to your savings. Hence, it is essential to follow some tips and guidelines to make the right decision in terms of getting a two-wheeler loan. The loan can help you take home your favourite bike without the need of much money in hands at a time.
Owning a bike or a scooter is a great thought to meet our everyday conveyance needs. Though, plenty of public transport options are available in almost every city, the time taken to commute to the desired destination is too long and exhausting. The uncertainty of public transports makes it even more preferable to own a two wheeler for a convenient ride anywhere and anytime. Also, the days are gone long back when affording a vehicle was quite a luxurious thing, but not today. And, all thanks to several banks and financial institutions those introduced affordable two wheeler loan schemes at competitive interest rates.
Bike loans were introduced in the Indian market with the purpose to let everyone afford a vehicle. As of today, all of prominent lenders offer vehicle loan with up to 90% finance facility.
A huge chunk of population today owns a two wheeler and it gives a sense of liberty and lets you live your life on your own terms. However, like any other major financial decisions, two-wheeler loan too comes with certain responsibilities and some things need to be considered before zeroing down a loan scheme.
Study the Interest Rates
As mentioned earlier, there are several financial institutions offering bike loan, but, it is significant to study the interest rates before moving forward with the decision. A trusted financial partner will offer the loan at affordable rate of interest which will not put a whole in your pocket leaving you under financial stress. Most financial companies today want to serve their customers with the best services and thus, it is best to negotiate the ROI with the lender to crack the best affordable deal.
If in case, you find that interest rates offered to you are higher than usual, it may be due to low credit score or low eligibility. Having a low credit score means low creditworthiness. Thus, fix your credit score dents first and then apply for a loan to avail lower rate of interest on two-wheeler loan online or offline.
Employment Tenure
Having a steady and reliable income source is not enough to get a loan. If you have just started working a few months back, then lenders may not consider approving your loan application. In general, an applicant is eligible to get the loan approval who has served at least a year to their current employer.
Lenders consider longer employment tenure because a stable job means stable income, which silently (though speaking volumes) represents borrower’s ability to repay the loan amount. As a part of employment tenure test, lenders might also evaluate your employment history. Frequently switching jobs won’t work in your favour.
Proof of Residence
Lenders cannot just provide you vehicle loan and let you fly off without repaying the loan amount. Banks and financial institutions might not approve your vehicle loan application if your residential address belongs to the city or town other than the city you are getting the loan from. Two-wheeler is a type of secured loan and the lenders need to get assured that the loan amount will be repaid on time without any default. Hence, having the same city residential address can work in your favour.
Interest Rates 2019 - Two Wheeler Loan
| Banks / NBFCs | Bike Loan Interest Rates |
|---|---|
| Bajaj Finserv | 10.99% onwards |
| PNB India | 11.70% onwards |
| HDFC Bank | 10.45% onwards |
| ICICI Bank | 11.57% onwards |
| Hero Fincorp | 10.35% onwards |
| Yes Bank | Depends on borrower’s profile & loan amount |
| Bank of Baroda | 12.70% onwards |
| Axis Bank | 15.00% onwards |
| Indus Ind Bank | Depends on borrower’s profile & loan amount |
| Union Bank of India (UBI) | 11.60% onwards |
| Indiabulls Dhani | 11.99% onwards |
| United Bank of India | 11.25% onwards |
| Andhra Bank | 10.70% onwards |
| State Bank of India (SBI) | 9.25% onwards |
Two-Wheeler Loan - Eligibility Criteria
| Age Criteria | Min. 18 years (at time of loan application) and Max. 70 years (At time of loan maturity) |
| Occupation | Salaried and Self-employed |
| Net Monthly Salary | Min. Rs. 7000 |
| Loan Amount | Max. up to Rs. 25 lakh |
| Processing Fee | Max. up to 3% of the loan amount |
| Residential Status | Min. 1 year at same location/area |
| LTV (Loan-to-Value) Ratio | Max. up to 98% of on-road price |
| Loan Amount Disbursal | Min. 6 hours & Max. 7 working days |
| Repayment Tenure | Max. up to 60 months |
Banks and NBFCs offering Two-Wheeler Loans in India
| 1. Clix Capital | 11. Andhra Bank |
| 2. Fullerton India | 12. Syndicate Bank |
| 3. IDFC Bank | 13. PNB India |
| 4. Union Bank of India | 14. Mahindra Finance |
| 5. Reliance Money | 15. Tata Capital Finance |
| 6. HDFC Bank | 16. Bajaj Auto Finance |
| 7. Indiabulls Dhani | 17. HDB Financial Services |
| 8. Hero Fincorp | 18. Mahindra Finance |
| 9. ICICI Bank | 19. Indiabulls Dhani |
| 10. Muthoot Capital Finance | 20. State Bank of India (SBI) |
Tips to select best bike loan in India:
Today, two wheeler has become an important commodity in one’s life. In addition, as a matter of fact, every coin comes with two different sides and the vehicle loan remains no different. While the loan gives convenience to own a vehicle, it comes with great financial responsibility as well. Hence, certain factors should be considered before making the final step.
Know your budget – Keep the first things first. The automobile segment has plenty of vehicle options in every budget, but it is upto you how much you can afford to borrow. Evaluate your income and determine the budget to buy your favourite vehicle.
Research and compare – Now as the demand for the purchase of two-wheeler is rising, the finance market has also become active. Research the market and compare to choose the best plans and affordable rate.
Lender’s market presence – This is another most important aspect to consider, though most borrowers overlook this. Lender’s market presence and value is quite important because the decision is about your financial association.
Eligibility criteria – The eligibility criteria can vary from lender to lender. Thus, while you choose the lender to get associated with, make sure that you makes up to their specific eligibility criteria.
Calculate the EMIs – Once you know about your budget, lender, and the eligibility criteria, the next in the list is to calculate monthly EMI cost. A bike loan EMI calculator can help you calculating an estimate of EMIs in order to plan your finances efficiently.
Key reasons to opt for two wheeler loan:
Almost half of the generation (above 18 years of age) owns a two wheeler as a convenient mode of transport. And undoubtedly, bike loans make it quite an easy and affordable to own a vehicle. With competitive interest rates and flexible terms, there are plenty of options to look for an automobile loan. Here are a few key reasons making the automobile finance industry one of the biggest growing industries in India.
Takes off a huge burden – Buying a vehicle whole in cash can eat up a lot of your savings and might even put you in a financial strain for a long time. Thus, a vehicle loan comes a biggest saviour as the borrower doesn’t have to face a financial dilemma at a time and even the high cost of vehicle doesn’t burns a hole in their pockets.
Helps building CIBIL score – CIBIL score determines how financially healthy an individual is. A three-digit score summarizes whether an individual is creditworthy or not. Credit score is a history of loan, credit, and repayments over a period of time and the same is reflected in a three-digit score ranging from 300 to 900. Higher the score, better the chances of loan approvals in near future. Two-wheeler loan gives an opportunity to build or improve this score through timely payments of loan.
Competitive interest rates – With the increase in number of commuters, the automobile finance sector is definitely getting lively tremendously. And owing to this, the interest rate on loans and credits have been facing downward slope due to rise in bike loan demands. Several banks and NBFCs have introduced their loan schemes at affordable interest rates to make better choices with finance-related matters.
Wider eligibility criteria – India is a country having people from all walks of life. While it may be cheap for someone to buy a bike worth Rs.1 lakh, but for the other, even Rs.50000 bike could seem to be extremely expensive. Thus, keeping this in mind, the banks offer flexible eligibility criteria for every income class. Hence, to get a vehicle loan, it is not mandatory to have an income within the taxable income range.
Flexible terms and quick processing – As we are living in a digital era, one doesn’t have to stand in long queues, make multiple visits, and wait for days for a loan approval. With the improvements made in online loan process, the sanctioning and disbursing time of a vehicle loan came down within day. Thus, while walking into a showroom or applying online, an applicant doesn’t have to wait for days to take home their favourite bike.
Additional benefits – With the amendments in the Indian Motor Act, nowadays, loans are sanctioned along with an insurance and accidental cover. For this matter, one can freely take ride of their new vehicle without worries of accident or damage. Also, the loan covers any additional charges such as registration fees and cost for accessories, this ultimately reduces financial strain.