Benefits of Taking a Two-Wheeler Loan
October 05, 2024
Owning a two-wheeler is a dream for many people in India. It offers the freedom to navigate through congested city roads and narrow lanes with ease. However, saving up for a two-wheeler can be challenging, leading us to make compromises on other expenses. But there's no need for that anymore. With the availability of two-wheeler loans, purchasing your dream bike or scooter has become more accessible than ever.
In this blog, we have explored the benefits of two-wheeler loan and how it can enhance your buying experience.
Bike Loan Advantages and Motorcycle Financing Benefits
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.
Final Thoughts
The benefits of two wheeler loan make it an attractive financing option for those looking to purchase a bike or scooter. The minimal documentation requirement, quick loan processing and disbursement, flexible repayment options, competitive interest rates, and high loan-to-value ratio are just some of the loan perks that make owning a two-wheeler a hassle-free experience.
Don't wait any longer! Apply for a two-wheeler loan today and ride your way to a more convenient and enjoyable commute.
FAQs
1. Can I apply for a two-wheeler loan if I have a low credit score?
Yes, it is possible to get a two-wheeler loan even with a low credit score. However, keep in mind that you may be charged a higher interest rate due to the perceived risk involved.
2. How long does it take to get a two-wheeler loan approved?
The time taken for loan approval varies from bank to bank. With digital processes, many banks can approve two-wheeler loans within just a few working hours.
3. Do I need to provide collateral for a two-wheeler loan?
Most banks and financial institutions do not require collateral for two-wheeler loans. The vehicle itself acts as security for the loan.
4. Can I prepay my two-wheeler loan?
Yes, most banks allow you to prepay your two-wheeler loan without any additional charges. However, it's important to check with your bank about their specific prepayment policies.
5. What happens if I default on my two-wheeler loan EMIs?
Defaulting on your loan EMIs can have severe consequences, including negatively impacting your credit score and potentially leading to legal action from the bank.
6. What are the eligibility criteria for a two-wheeler loan?
The eligibility criteria vary from bank to bank but generally include factors such as age, income stability, employment status, credit history, etc.
7. How can I apply for a two-wheeler loan?
You can apply for a two-wheeler loan online through the website of Ujjivan SFB or visit your nearest branch for assistance. Fill out the application form, submit the required documents, and await approval.
8. Can I choose my repayment tenure?
Yes, you can choose your repayment tenure based on your financial situation. Two-wheeler loans offer flexible tenure options ranging from 12 months to 60 months.
9. Are there any additional charges involved in taking a two-wheeler loan?
Some additional charges may be applicable, such as processing fees, prepayment charges, late payment fees, etc. It is advisable to go through the terms and conditions of the loan agreement to understand these charges better.
10. What are the benefits of using a two-wheeler loan EMI calculator?
A two-wheeler loan EMI calculator helps you determine the equated monthly instalment amount based on your loan amount and tenure. It enables you to plan your finances better and understand the impact of different repayment options.
11. Can I avail of a two-wheeler loan if I am self-employed?
Yes, self-employed individuals can avail themselves of a two-wheeler loan. They need to meet the minimum net profit criteria specified by the bank.
12. What documents are required to apply for a two-wheeler loan?
The documents required to apply for a two-wheeler loan include valid identity proof, address proof, income proof, asset proof, and recent passport size photograph. Make sure to check with the bank for specific document requirements.
13. Can I apply for a two-wheeler loan online?
Yes, most banks offer the option to apply for a two-wheeler loan online. You can visit their website, fill out the application form, and submit the required documents digitally.
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