All You Need To Know Before Opting For Bike Finance
Two wheelers are a very convenient and sustainable mode of transportation and owing to its practicality, it is preferred for private transportation purposes in India. Be it buying your dream bike, or be it buying a motorcycle for commuting purposes, arranging for the money is one of the key concerns when you think of buying a bike.
That being said, bike finance is one of the most popular ways to purchase a bike in India. According to research, the Indian two-wheeler loan market is estimated to grow to $12.3 billion by the year 2025. Bike finance is very popular with Generation Z with 50% of two-wheelers financed in the Indian market.
That being said, let us take a look at the most important things you must know about bike finance.
Key Features of Bike Finance
Here are a few things that you must know about two wheeler finance before you apply for one:
- Most lenders finance the majority of the bike?s purchase price which may even extend to almost 90-95% of the price of the bike. You can also get a zero down payment bike loan from some lenders.
- The interest on bike loans are not exorbitant. As a matter of fact it is mostly between 9-17% depending upon the loan amount and the credit profile of the applicant.
- The loan repayment tenure for bike loans generally extend anywhere between 3-5 years.
- The processing fee charged by banks and NBFCs for such loans ranges between 0.25-5% of the loan amount.
- Two wheeler loans are widely available and accessible and you can apply for such loans online or even get apre approved bike loan for yourself.
- Generally, two wheeler loan documents are minimum and the eligibility criteria with most lenders are also pretty basic. Your chances of getting a two wheeler loan approved is pretty high even if you do not have a credit history.
Two Wheeler Loan Documents And Eligibility
The eligibility requirements for bike finance is pretty basic with most lenders offering such loans. Generally, lenders ask for the following:
- A minimum age of 21 years when you apply for a two-wheeler loan. The loan must be repaid before the age of 60 years. For self-employed individuals the age limit is 65 years.
- For salaried professionals, the employment tenure at the current organization must be at least one year when applying for the loan. For self-employed professionals, you must be in the same line of business for at least one year.
- The applicant must be a resident citizen of India.
- A decent CIBIL score of around 700-750 before applying for the loan. Some lenders may also specify a minimum income that may be anywhere between ?72,000 to ?1.5 lakh.
The basic documents required for a bike loan are:
- Personal KYC documents
- Residence proof
- Employment proof and documents
- ITR files for self-employed professionals
- A properly filled out loan application form
- Passport size photographs
- Bank statements and salary slips of last 3 months at least.
Final Thoughts
Once you have all that figured out, applying for a bike loan is really easy. Choose a suitable lender for bike finance and check out their terms, eligibility and other details of the loan. After that, simply fill out the application form and submit the documents without any errors or omissions. You can do it online, at the bank branch or finance company?s office or even at the dealership from where you buy the bike. Once all that is done, your new bike will be arriving very soon!