Multiple questions and doubts about Two-wheeler Loans tearing you apart and clogging your mind? Fret not, my friend; we’re here to clear your mind once and for all!
Multiple questions and doubts about Two-wheeler Loans tearing you apart and clogging your mind? Fret not, my friend; we’re here to clear your mind once and for all! Taking out a loan is a big decision, which is why decisions need to be made with clarity of thought. It’s natural for you to get a little confused when you swim through an ocean of banking jargon and what not, but we’re here to give you a lifeboat. Who knows? By the end of this article, you may be doing backflips!
Good to go? Let’s answer all the possible questions you may have when you’re on the lookout for a Two-wheeler Loan.
How do I know if I’m eligible for a Two-wheeler Loan?
Good question. Here’s a quick checklist you can use to determine your eligibility.
- Age group
Typically, anyone whose age falls between 18 to 65 years is eligible for a Two-wheeler Loan
Loans are usually given to individuals who will be able to repay them, so it’s a given that you need to be a salaried or self-employed individual to be eligible for a Two-wheeler Loan. Also, you need to have been in the same job for at least six months.
- Minimum income
It’s essential for you to earn a minimum income for banks to approve your loan application
For a bike loan, you’ll need passport-size photos, a valid identity proof, a valid address proof, and proof of employment & income.
- A permanent phone number
This one’s a no-brainer. You need to have a working permanent phone number that the bank can use to get through to you and for their records too.
Can I get a Two-wheeler Loan online?
Yes, of course! With the digital world making life ever so convenient, you can now get started on your Two-wheeler Loan application within seconds. In fact, why don’t you start right away?
What are the different types of Two-wheeler Loans?
In India, you can either opt for a secured or an unsecured bike loan. What’s the difference? Well, the former is a loan taken against a collateral such as a bond, home or land. The latter doesn’t require any collateral, but generally comes at a higher rate of interest than a secured loan.
Can I close my loan in advance?
Of course, you can prepay your loan amount, but only after six months from having taken it. If you wish to pay out your loan amount before that, it will only defeat the purpose of you taking the loan in the first place, wouldn’t it?
Any processing fees I should be aware of?
Yes, banks charge a fee to process your loan request. The amount depends on your total amount; it’s usually calculated based on it. It usually varies from bank to bank and is usually a non-refundable fee.
Any other fees I could end up paying?
Well, that totally depends upon your repayment habits. Let’s say you want to prepay your loan amount, i.e. close your loan earlier than the agreed tenure; in this case, some banks may charge a minimal fee. On the other hand, if you end up missing an EMI payment, banks will charge you a late-payment fee. You may want to avoid that, because who likes paying a fine? Also, any late payment in your financial history is only going to adversely affect your Credit Score.
What if I choose to convert my loan? Will I be charged?
Whether you’re changing to a floating rate from a fixed rate or vice versa, the bank will charge for the conversion. It’s also commonly referred to as a flexibility fee.
Is that all in terms of fees?
Well, there’s another misunderstood fee, namely the administrative fee. Now, many assume this to be the same as your process fee. However, the administrative fee has more to do with the recovery of the administrative cost your bank has incurred while processing your fee and not the processing costs.
I’ve heard banks mention ‘two-wheeler hypothecation’. Now, what in the world is that?
Don’t let these big words fool you; it’s simple. Let’s say you’re about to apply for a secured loan. As a part of the process, you need to pledge your bike to the lender as an act of guaranteeing them some kind of security for your loan settlement. This process is referred to as hypothecation. When you’re done repaying your loan, remember to get the hypothecation cancelled as soon as possible. This will require you to provide a proof of your loan repayment; your loan repayment receipt should do the trick. Want to learn about the process in detail? The link below should help you!
Additional Reading: Two-wheeler Loans – Everything You Need to Know
Is it a good idea to check my Credit Score before applying for a loan?
Yep! Checking your Credit Score is always a good idea. Firstly, it’s free. Secondly, it’s always good to know where you stand or how creditworthy you are before taking a credit product from a lender.
Ok, that helped clear my mind. Last question. How am I going to benefit from taking a Two-wheeler Loan?
Like any other loan, a Two-wheeler Loan will let you purchase a bike when you need it the most. You won’t have to wait for a year and save up to afford a bike. Secondly, even if you can afford to buy a bike by paying in full, the outflow of money in bulk may leave you a little financially stressed for a month or two, whereas a loan will give you the time to space payments out and enjoy peace of mind as you repay your loan amount in bits.
Also, bikes generally fare better than cars in terms of resale value, so if you plan to sell it once you’re done with the repayments, you can be assured of a very decent deal, provided your bike is in good condition, of course!