A large percentage of the Indian population buys a two-wheeler at some point in their lives. The demand for these vehicles is constantly increasing, which in turn has fuelled the growth of the two-wheeler loan industry in the country.
Here are five salient features of this type of loan.
1. Higher loan to value (LTV) ratio requiring minimal down payment by the borrowers
2. Flexible tenure (up to five years)
3. Affordable two-wheeler loan interest rate
4. Less documentation and quick approval
5. Low prepayment charges and other fees
Technical development has significantly reduced the processing time for availing of a bike loan. The entire online procedure is quick and uncomplicated making it advantageous for the borrowers.
Here are three benefits of using a loan to purchase a two-wheeler
1. Affordable
Contrary to the common perception, bike loan interest rates are affordable. Furthermore, the processing fees and other documentation charges are competitive, which makes it possible for most individuals to avail of this type of financing. Moreover, several financial institutions provide special offers and discounts on interest rates to a certain category of applicants like female borrowers.
2. Faster processing
The entire procedure of sanctioning and disbursal of loan is completed within a few days. Moreover, the documentation needed is minimal, which makes it easier for individuals to comply with all the requirements.
3. Available for individuals with low credit score
Several banks may not offer loans to borrowers with a lower credit score. However, most non-banking financial companies (NBFCs) are flexible and provide a loan to such borrowers. This makes it easier and convenient to purchase a bike on EMI.
With easier requirements and lesser processing time, purchasing a two-wheeler is no longer an impossible dream. However, individuals are advised to research on various lender options to make the right choice. Few well-known lenders in the market are Capital First, Mahindra Finance and Fullerton India.
