What are the benefits of buying bike at finance in India?

Given the current social distancing norms of the COVID-19 pandemic, getting a bike has become more of a necessity than a luxury. It enables you to navigate through traffic and commute to work without putting your health at risk. With the increasing prices of two-wheelers in the market, not everyone can afford to buy a bike from their pocket. However, that does not mean that you should give up on your goal of having a bike. 

You can still buy your dream bike with bike finance and manage your finances without dipping into your savings or investments. You can apply for a bike loan from a bank or non-banking financial institution without declaring your asset as collateral. Most lenders in India offer up to 100% of the vehicle’s on-road price as a loan. Generally, the interest rates start from as low as 0.99%, and with flexible loan tenure, making repayments is easy and convenient. 

However, your interest rate for bike finance depends on factors such as age, income, credit score, current financial obligations, etc. To get a higher loan and a lower interest rate, you will have to convince your lender that you can repay your loan within the stipulated EMIs. 

Benefits of applying for bike finance to buy your dream bike

A bike loan comes with several benefits that you can avail of, which are: 

• Higher loan amount

As mentioned earlier, you can secure up to the entire value of your bike as a loan. It means that you can buy a bike regardless of the market price. It is worth pointing out that the loan amount has a direct impact only on the interest rate. Your lender will charge you a higher interest rate for opting for a higher loan amount. So, if you wish to secure a lower interest rate on your bike loan application, make sure to apply for a lower loan amount.

• Lower interest rate

The best part about bike finance is that you can obtain an interest rate as low as 0.99%, depending on your lender. While applying for a bike loan, keep in mind that your interest rate depends on factors such as your age, income, credit score, etc. To get better interest rates, you will have to maintain a minimum CIBIL score of 750. You will also need to have a stable and recurring income that indicates higher repayment capacity.  

• Quick loan approval and disbursal

Given the minimum documentation requirement, you can get quick loan approval and disbursal. Unlike the old days, you do not have to stand in a long queue to apply for a loan. You can visit your lender’s website, fill in your application, submit your documents, and get the sanctioned loan amount in your bank account within hours.  

While submitting your application online, you will have to specify the loan amount you need along with the loan tenure. Your bank will take some time to verify your details, and if everything is complete and in proper order, the sanctioned loan amount will be disbursed to your bank account. 

• Minimum eligibility requirement

Another benefit of applying for bike finance to buy your dream bike is that you do not have to fill in a lot of requirements. The eligibility criteria for a bike loan are at a bare minimum, which are: 

• You must be an Indian citizen currently residing in one of the cities in India. 
• You must be either a salaried employee of a company or a self-employed person.
• You must be at least 18 years old while applying for a loan and 65 years old during loan maturity. 
•  You must show a minimum income/profit based on your lender’s policy.  

To get a bike loan, you will have to meet the above-said requirements. If you wish to secure a lower interest rate, make sure you have a higher income. 

• Minimum documentation involved

Although the documents required to apply for a bike loan vary across lenders, here are the ones that are common across all platforms: 

• Identification proof: Aadhaar Card, PAN Card, Passport, Ration Card,  Driving License, or Voters ID Card. 
• Address proof: Passport, Aadhaar Card, Electricity Bill, Water Bill, Telephone  Bill, Driving License, Ration Card, or Voters ID Card. 
• Age proof: Aadhaar Card, Passport, Voters ID Card, or the 12 standard’s certificate.
• Income proof: Salary slips, Income Tax Return (ITR), form 16, or bank statement.  
• Asset proof: Property documents (if you are opting for a secured loan) 
• A recent passport-sized photograph 

Conclusion 

Getting a two-wheeler loan is the best way to manage your finances when you do not have other means.  You can secure a higher loan amount, lower interest rate, and longer loan tenure. However, before applying for a loan, make sure to assess your needs to make an informed decision.