For most buyers, riding or purchasing a dream bike requires months, or in some cases, years of savings. These buyers may comprise of students, adults, and professionals who have to cut their expenses to save enough to buy a motorbike they are interested in.
For such buyers, Two wheeler loan is a great option to not just own a bike but also have the payments made in easy monthly instalments. This gives added flexibility when purchasing a dream bike, and relieves the stress of spending a large amount in one go.
If you are considering to go down this path, this article will help you understand the nuances of a Bike EMI, so you can drive home your dream bike without making a blunder.
What Is A Two Wheeler Loan?
A two-wheeler loan gives the buyer the benefit of availing easy monthly instalment (EMI) payment options with an additional interest rate to buy a two-wheeler that the buyer wants. This enables the buyer to pay the cost in smaller monthly payments rather than shelling out the entire amount in one go.
This facility can be availed through a motorbike dealership, bank, or a third-party institution.
How Much Do You Calculate Your Bike’s EMI?
The amount paid by the buyer after opting for a two-wheeler loan is determined by several factors. These factors include bike amount, EMI period, and the interest rate at which the loan is offered.
Before you opt for a two-wheeler loan, here are a few factors you should consider:
- Know the interest rate:To calculate your monthly payment, it is optimal to know the interest rate and price of the bike you are looking to purchase. Since there are many options in the market, buyers can pick and choose and take the next step.
- Calculate EMI using loan calculator: Calculate the amount you may need to repay online based on tenure, total amount and interest rate applicable. You can use the Bike EMI Calculator to understand it.
- Loan duration: While it is enticing to go for a shorter loan tenure, it is smart to decide how much the impact of the EMI will be on your finances and choose the right option. Understand the tenures available for your bike and make the smart decision.
- Fees and charges: With most loans, in addition to the principal amount and interest rate, there are other fees that the buyer has to pay upfront. Making sure to know this in advance will save you from last-minute hiccups!
What Determines Your Eligibility?
To make sure you are eligible for the loan, make sure to check the eligibility criteria. This will depend a lot on your credit score as that will determine your financial background. After you submit your application, the bank or the lender will consider your eligibility based on factors like:
- Age: The minimum age for acquiring a loan is 21 years, but it could be relaxed to 18 years if other factors play out in your favour. Financiers are normally hesitant to give loans to young people as there is minimal credit history.
- Employment: It is perhaps the most important factor to decide your eligibility for loan application. Having a stable job at the same company for a long duration works as a bonus. Freelancers and self-employed adults have a low ranking, but that can be discarded if the buyer can showcase excellent financial health using financial statements
- Income: It is another crucial factor to determine eligibility for the loan. Income determines if you will have enough money to repay your monthly instalments. If you are opting for a bike that is way outside your income bracket, the likelihood of getting a loan is low.
The application will generally ask for more documents like:
- Passport Size Photos
- ID Proof: Government-approved ID proof like Voter ID card, driving license and Aadhar Card
- Address proof: Documents like a utility bill, rent agreement, or Aadhar card
- Employment proof: Although optional, some lenders may ask to see salary slips or letter from the employer to testify that you have been associated with the company.
How Do You Choose The Best Finance Options?
As a buyer, there are innumerable two-wheeler loans and EMI options available in the market today. While this makes it easy to own a bike, the buyer should make sure to do a thorough background check and opt for an option that best suits his/her requirements.