Most Indians aspire to own a vehicle, be it a car or a two-wheeler, simply because of the several functional benefits it provides to them and their families. However, not all people have enough liquid cash at their disposal to purchase a two-wheeler or bike by paying for it upfront. The best option, therefore, is to get a loan to finance the dream bike. Over the time, getting finance for two-wheelers has become convenient and easy.Depending on the lending institution that you approach for credit, you can receive a loan of up to 85% of the bike’s price, or in some cases, even up to 90-95% of it. This can easily help you buy the bike you want, and then pay off the debt in affordable EMIs (Equated Monthly Instalments). But picking the bike loan that’s best for you is no easy task. It takes a great deal of research before selecting a loan product that meets your requirements, as you need to carefully read through the fine print.
The loan tenure, interest rate, repayment terms, etc. are critical points that any borrower must consider before finalising on a deal. In order to get a bike loan, you must also fulfil a set of specific criteria, which usually varies from one lender to another. However, some of the basic criteria are common across most lending companies, and are as follows:
# Employment status: Borrowers, both salaried, as well as self-employed, must provide relevant proof of their employment or source of income if they wish to get a loan.
# Salary: A minimum of six months of employment and salary credit proof, corresponding to the stipulated time period, must be submitted to the lender when applying for a bike loan.
# Proof of identity: Proof of identity and address are mandatory requirements when applying for a loan.
Now that you know what the requirements are for a loan, let’s look at how you can go about applying for, and getting a bike loan to finance that bike you’ve been dreaming to own:
Step 1: Define your budget and your repayment capacity
Before applying for a loan, you should know what your budget is and what sort of a repayment plan would be best suited to you. Understand the scheme details regarding the loan very carefully.
Step 2: Fill your loan application form
Once you have decided on a loan that’s right for you, fill your application with all the relevant details that will help the lending company determine your creditworthiness. Be sure to fill in the application form correctly with accurate facts, otherwise your loan could be rejected at a later stage.
Step 3: Provide essential documents
Submit your KYC documents. Make sure all details are accurate and updated to avoid unnecessary back and forth with the lending company, and ensure quick and seamless processing of your application.
Step 4: Understand the terms of the loan
Once all your loan is approved, you will receive a sanction letter from the lending company along with a legally agreement. The agreement will include all the terms and conditions pertaining to the loan in addition to the assigned interest rate, loan duration, etc. It is important to thoroughly understand each point in the agreement and make sure you abide by the repayment rules to avoid being penalised.
Step 5: Sign the loan agreement
The only thing remaining for you to do is sign the loan agreement, following which you will receive the promised amount in your bank account.
(By Amit Rai, Business Head, Wheels at InCred)