If you have decided to purchase a two-wheeler, you can buy it with a bank loan. Buyers can obtain a loan in two ways. Firstly, you can apply for a personal loan at your bank. Secondly, you can apply for a loan that has been specifically offered to two-wheeler buyers. Choosing a personal loan from a bank or a financial company is hassle-free. You do not have to show any specific reasons for the loan. However, the personal loan amount will be low. Moreover, the interest rate will be high on such loans. Many borrowers choose a two wheeler loan in New Delhi for these reasons.
The Best Lenders for Bike Loans
You have multiple options for two wheeler loan finance. However, approaching a bank is the best thing to do. The banks offer loans with a low-interest rate. Moreover, the banks offer flexible loan repayment tenure. As a result, life remains easier after obtaining a two-wheeler loan from the bank. Instead of approaching a bank, you can also contact a financial institution for a motorbike loan. In the following section, you can find the lenders’ factors before approving your loan application.
Factors for Approving Bike Loan Applications
1. Source of Income
The most crucial thing that lenders consider is the source of income. The source of income helps lenders understand your ability to repay a loan. Therefore, the lender will seek employment-related documents from the applicants. Failing to provide those documents will lead to the loan application being rejected.
Typically, a salaried person gets a loan easily due to job stability and a fixed monthly income. But, it does not mean that non-salaried people cannot get a loan to purchase a bike. Banks and other financial institutions also offer motorbike loans to non-salaried people, though they ask for last year’s ITR certification to assess your financial ability to repay a loan.
2. Type of Vehicle
Loan approval depends on the type of vehicle that you want to purchase. You cannot purchase a four-wheeler vehicle with a two-wheeler loan. Similarly, most lenders offer loans for new vehicles. Therefore, you cannot use the loan amount to buy a second-hand vehicle and keep the remaining money in your account.
The loan interest may fluctuate depending on the type of vehicle you choose. The choice of a luxurious superbike will make your loan repayment difficult due to the high-interest rate. Therefore, people with low and medium incomes should think of purchasing a daily commuter motorbike at a low rate of interest.
3. Age and Location
Age is a crucial factor in approving a loan application. The lenders approve loans to those who can repay the loans without facing age-related obligations. For example, a person approaching 60 is about to retire from a job. Therefore, repaying the loan can be difficult for such people. On the other hand, a 30-year-old loan applicant can easily repay the loan since he will have a job for the next 30 years.
The location of the applicant is also a big factor in lending. You must pay a higher EMI if you live in a tier-1 city. For example, interest on two wheeler loans in New Delhi is higher than in rural regions. Government banks offer two-wheeler loans easily in semi-urban and rural areas. Since these regions do not have top-class public transport like the metro cities, the public sector banks provide motorbike loans easily to the applicants.
4. Down Payment
The loan approval depends on your ability to make the down payment. The down payment is an upfront cost that people have to pay for purchasing two-wheeler vehicles. For example, you may pay 20–50% of the overall motorbike’s value as the down payment. The bank will fund the remaining amount through the loan.
Do you have the financial ability to pay the down payment on the vehicle? Your loan application will be rejected if you fail to make the down payment. Therefore, lenders should arrange the down payment before applying for a loan.
5. Credit Score
A credit score is crucial when you apply for a two wheeler loan in New Delhi. Ideally, a person should have a credit score of over 750 to get a loan application approved. However, a person may not have a valid credit score if he has not borrowed anything in the past. In such cases, the lender will check the borrower’s employment status before approving the loan.
You can improve your credit score if you have a credit card. One must use the card frequently for purchases and pay the bills on time to improve the credit score.So, these are the crucial factors you must know about two wheeler loan finance. It would help if you found a trusted lender to get a loan to buy a new two-wheeler.