Purchasing your own vehicle undeniably offers a sense of self-reliance and freedom, not to mention the convenience of navigating busy roads without hassle. Nevertheless, a two-wheeler purchase is a big-ticket investment that can impose a financial burden if you try to shell it out all at once. The financial market thus brings an easy funding solution in the form of two-wheeler finance.
These are high-value loans, easy to avail, and come with simple eligibility requirements. Some of the best lending institutions also offer a high LTV (loan to value ratio) for sufficient funding. So, here’s a quick guide that would help you secure the loan conveniently without ado.
Easy way to finance two-wheeler purchase
Conventionally, financing the purchase of a two-wheeler means visiting a traditional financial institution to avail credit. While several financial institutions have been funding motorbike purchases for both urban and rural Indians, the last decade has witnessed a remarkable shift in the lending sector, with new-age lenders taking over a spectrum of personal financing segment, including two wheeler finance.
One of the crucial things to know about these lenders is that they simplify loan processing through reduced paperwork with minimal eligibility and document requirements.
Along with the ease of availability, one must also be prepared for other related factors and be well-informed before applying for it. These can include eligibility requirements, mode of application, interest rates applicable, etc. The following steps will help you prepare for a two-wheeler loan application in advance for easy and hassle-free processing and approval.
Select a suitable two-wheeler loan
As several financial institutions in the market extend two wheeler loans, you would need to run a market comparison of various lenders to arrive at the best offer. Some of the factors you can considering when selecting the loan offer include –
- High-value financing.
- Extended tenure flexibility.
- High loan to value ratio (LTV) of up to 95%.
- Low rate of interest.
- No requirement for guarantor.
- Bundled schemes and offers.
- Quick financing with instant approval.
Once you have narrowed down on a suitable lender, you can proceed to look for other lender-specific aspects.
- Fulfil all eligibility requirements
Make sure to fulfil the eligibility criteria of the selected lender for availing two-wheeler finance conveniently. Lenders often lay down the following standard requirements for two wheeler loan approval.
- Should be an Indian national above 18 years of age.
- Salaried applicants must be employed for a minimum of 1 year with at least 6 months of employment in the current job.
- In the case of self-employed applicants, the minimum duration of current business operation is 1 year.
Keep the necessary documents handy
You must also keep the necessary documents ready for handover when seeking quick approval of the advance. Prepare your documents beforehand to avoid last-minute hassles. Some of the common documents you may be asked to submit include –
- KYC documents, including ID proofs and address proofs.
- Proof of income, like salary slips, ITR, bank statements, etc.
- Photograph (Passport sized)
Assess the EMIs payable
Along with availing a loan, repayment affordability should also be an essential concern of the individual. Thus, it is critical to assess the EMIs you would be required to pay towards loan repayment.
Once you have selected the two-wheeler to purchase and decided on the loan amount, decide on a suitable tenure. With some of the best NBFCs, repayment tenure on two wheeler finance can extend up to 48 months. Use financial tools like an EMI calculator and assess instalments before finalising on the loan amount and tenure.
Create a repayment plan
You must also have a repayment plan in place to project along with the application to depict proper financial planning and improve chances of quick approval. While a repayment plan in place is crucial for all applicants for efficient management of finances, it becomes all the more important in case of a self-employed borrower.
It is because self-employed individuals may find there income stability affected from time to time. You must also plan to prepay the loan with lump sum fund availability.
Apply for the loan online
Once done with all the previous steps, you can proceed to apply for your two wheeler finance with the selected lender. Choose to send your application online instead of offline for faster processing and approval through streamlined steps with reduced documentation.
Note that the repayment and security requirements of two-wheeler finance are same as any other vehicle loan such as a car loan, and require vehicle hypothecation until complete repayment of loan liability. Make sure to repay the loan on time and obtain a No Objection Certificate after complete repayment for encumbrance-free ownership.