How To Choose Perfect Bike Loan Interest Rate

Bikes have become a popular choice of transport for most Indians for commuting from one place to another. It is evident from the fact that more than 120 million bikes were sold between 2012 and 2018. Bikes offer better mileage than four-wheelers, are affordable than cars and can help one to manoeuvre heavy traffic prevalent in almost every major city. Lenders across the country offer bike loans, which make it easier for an individual to buy a bike and make one’s life more convenient. Although the two-wheeler loan or bike loan interest rate is different for every lender, it is affordable for the common man. This article will help you choose the lowest two wheeler loan interest rate.

Bike Loan Eligibility

Age Limit

Every lender has set a different age limit for people who want to get a two-wheeler loan. The minimum age is 18 at the time of application. The maximum age limit is 65 years at the end of the loan tenure.

Employment Status

Lenders only approve a two-wheeler loan for individuals who have income and income proofs. They can either be self-employed or be salaried individuals.

Income

Earning more gives the lender assurance that a borrower will be able to repay the bike loan on time. Lenders have set a minimum income that a borrower should have to take a lender loan. It is around Rs. 96,000 per annum for salaried profiles and 1,20,000 per annum for self-employed professionals.

Work Experience

Lenders require you to have a year’s worth of work experience and at least six months with your current employer. For those who are self-employed, a 5-year tenure and ITR for the past two financial years it required.

Existing Debt Situation

Lenders will check your debt history before approving your loan. If a person already has a lot of debts to their name, approval of the loan may not take place. It is because of the risk of not repaying increases in such a case.

Area of Residence

It is easier to get a two-wheeler loan if you live in a metropolitan or a big city.

Documents Required for a two-wheeler loan:

Lenders require a few documents that need to be submitted before you take a loan. These act as proof that you are eligible to get a loan. Documents required will be different for different lenders but generally, the documents listed below are required:

       1. Identity Proof: Aadhar Card, PAN Card, Passport, Voter ID, Driving License

       2. Address Proof: Rental Agreement, Aadhar Card, Passport

       3. Asset Proof: Latest Land, Building or House Tax Receipt

       4. Recent Passport size photographs of borrower

       5. Proof of Income: Lender Statements, Income Tax Returns, Salary Slips
 

How to choose the perfect bike loan interest rate?

The interest rate for a bike-loan depends on numerous factors and differs from lender to lender. Some critical factors are:

• Interest Calculation Method: Do not opt for a personal loan program based solely on its low-interest rates. You also need to understand the full measurement of the debt while using a personal loan. Although some banks or lenders provide low-interest rate personal loans, sometimes the formula does not include a phased reduction of the principal and interest rates. You may sometimes allow the use of a flat rate that might cost you more than a may profit. A lower loan rate means payment of interest only to the outstanding balance, but a flat rate allows payment of interest to the loan amount throughout the entire loan term.
• Choosing the right Lender: Bike loan interest rates differ from lender to lender. But applying for a loan from your current lender has a lot of benefits. If the lender already trusts you, there is a chance that you will be able to negotiate with them and get better interest rates. You might even get a loan for which you are not fully eligible for based on the trust that they have on you. But this may or may not happen depending on the lender.
• Research: Before applying for a two-wheeler loan, you should conduct thorough research. It can be done on the internet or by visiting lenders. Borrowers should check for any offers that they can benefit from and finally get the lowest bike loan interest rate.

There are a lot of options that may be suitable for your budget and income, which can help you get the bike of your dreams at the lowest interest rate.