Benefits of Taking a Two-Wheeler Loan

Here are a few benefits you can expect from two-wheeler loans:

1. Lower Interest Rates Compared to Personal Loans

Two-wheeler loans come with lower interest rates compared to personal loans. That's because bike loans are generally secured loans, where your bike works as a collateral till the loan amount is repaid. On the other hand, personal loans are unsecured loans, meaning you don't need collateral or guarantor to avail such loans. Since, in personal loans, the default risk is more, the interest rate is also comparatively higher compared to bike loans.

2. Minimal Documentation

When it comes to applying for unsecured loans, long and complicated paperwork can be a major hassle. However, two-wheeler loans don't require heavy documentation. Banks like Ujjivan SFB ask for basic KYC documents to process your loan application.

For example, Rahul wanted to buy a new scooter to commute to work every day. He decided to apply for a two-wheeler loan from his bank. To his surprise, he found that he only needs his Aadhaar card and PAN card as KYC documents for the loan application. This minimal documentation requirement made the whole process effortless and convenient for him.

That said, ensure you have a good credit score to fetch better deals on your loan. Any CIBIL score above 750 is considered a good credit score. Alternatively, contact your bank to get more details on the documentation requirements.

3. Flexible Repayment Options

Managing finances is important when taking any loan. With two-wheeler loans, you can repay the amount in EMIs (Equated Monthly Instalments). Ujjivan SFB's Chakra Loan (Two-Wheeler Loan) comes with a tenure ranging from 12 months to 48 months. You can use a two-wheeler loan EMI calculator to calculate your monthly repayment obligations based on tenure, amount and interest rate, and select the tenure that best suits your finances.

This flexibility ensures that you can comfortably repay your loan without straining your finances.

4. Big-Ticket Loans

You can get up to more than 90% financing to purchase your favourite bike. For example, Ujjivan SFB offers up to 95% on the on-road price of the vehicle. However, the approved loan amount depends on various parameters and is at the sole discretion of the bank.

Point to Note: Apply for the loan amount that aligns with your repayment capacity. Try not to overburden yourself with debt. Take the help of a two-wheeler loan EMI calculator to check your repayment obligations. This could help you plan your finances better.

5. Helps Boost Your Credit Score

Taking a two-wheeler loan and repaying it diligently can have a positive impact on your credit score. A good credit score increases your chances of getting approved for future loans and credit cards at better terms and interest rates. It also showcases your financial discipline and creditworthiness.

6. Hassle-free Loan Application Process

If you're eligible for a two-wheeler loan, availing such is not that difficult. More so because two-wheeler loans are secured loans, where your two-wheeler acts as a collateral. If you default on your loan, the bank may have the right to seize your vehicle. This reduces bank's risk. Keeping this into account, banks offer a simplified loan journey for customers.