Now you can avail the bike loans with just minimum documentations and you can also apply for these loans directly from the lender’s website. There are bike loans which are given for this very purpose. There is a huge demand for bike loans and the people are attracted towards the financing options, the interest rates that are slashed as well as festival and other discount offers that are given from time to time.
Types of bike loans provided by the lenders:
A two wheeler loan is of two types.
There is a secured loan and an unsecured loan. The secured loan requires collateral to be pledged. Usually the bike is taken as collateral against the loan. In case of used bikes and those that do not meet up with the guidelines prescribed, some other collateral is required.
Usually the collaterals in such cases are a car or some other such asset. In case of unsecured loans, 10-15% of the loan is required to be paid as down payment.
This needs to be made at the time of purchase. The rate of interest is usually higher in cases of unsecured loans.
Eligibility for obtaining two wheeler loans
In order to be eligible for a two wheeler loan, the individual needs to be a minimum of 21 years old, and lesser than 60 years at the end of the tenure of the loan. For those that are self employed, though the minimum age remains the same, the maximum age is usually extended to 65 years.
The gross income should be a minimum amount based on the kind and model of the bike being purchased. Some of the loan companies also require a minimum residence period at the city or town where the bike is being purchased.
A bike loan normally requires identity proof, a copy of the driving license as well as residence proof. The income proof also needs to be submitted along with income tax returns or probably the bank statement for a period of the past 6-12 months.
In case of business persons, the profit and loss statement as well as the balance sheet is required. In case of nonprofit organizations, the income and expenditure sheet as well as balance sheets are required.
The processing charges usually vary but they are generally 1% - 2% of the loan amount which is sanctioned. The documentation charges too are around 2% of the loan amount which is sanctioned. The down payment usually is around 10-25% of the cost of the vehicle and the term of the loan varies from 1 – 3 years. Though at times it can even extend to 5 years. One can choose a loan amount based on their salary or income as well as the cost of the bike.
The interest rates of the bike loan depend on the nature of the loan:
It also depends on the one who is financing the loan and the credit rating of the person who is taking the loan for bike. The loan interest also at times depends on the tenure of the loan. You can also make some advance payment as per your financial convenience, and the amount shall be deducted from the total outstanding loan amount or the principal amount of the loan. But if you want to settle your loan with full payment then you may have to spend some extra amount as per the terms and conditions of the lenders.
There are also tie-ups between motorcycle vendors and the banks. These offer benefits to the customers as the down payments are usually lower. The processing of the loan is faster, the documentation is much easier and not as extensive, and these offer longer tenures for repayment.