Do’s and Don’ts While Applying for a Two-Wheeler Loan in India

Applying for a two-wheeler loan is one of the easiest of all the financing options. Since the bike is hypothecated with the lender, the bike loan eligibility and the list of required documents are kept to a bare minimum. However, as a cautionary note, borrowers should be aware that there are still several things they should avoid when applying for bike financing. Also, there are several things you must do to obtain a low-interest two-wheeler loan. Today in this post, we will throw a light on do’s and don’ts while applying for a two-wheeler loan.

Do’s for Two-Wheeler Loan:

The following is a checklist of what you must do when applying for a two-wheeler loan.

Check Eligibility:

Before initiating your two-wheeler loan application, it’s recommended that you go through your preferred lender eligibility criteria. Different lending institutions have different qualifying standards and paperwork procedures. To avail of the best deal on your bike loan, choose the lender whose qualifying conditions match your profile.

Research:

Why rely on one financial institution when numerous financial institutions are waiting to finance your two-wheeler? Before applying for a bike loan, compare the rates and offers with different lenders. Conducting extensive research will help you get a better deal on your two-wheeler loan. To conduct research, you may also use the loan aggregator’s website.

Co-applicant:

If you don’t fulfil the lender’s minimum qualifying conditions, getting a two-wheeler loan can be a tough task. There is, however, a way to not only receive a bike loan but also a low-interest two-wheeler loan. By adding a co-applicant to your two-wheeler finance application, you can easily get loan approval. It is advisable that you add a co-applicant who has a stable income and a good credit score. However, keep in mind that once the loan is approved, the co-applicant is equally accountable for repayment. Your credit score and that of your co-applicant will both be affected if you default.

Flexible EMI:

If your monthly obligation exceeds your budget, it not only makes it difficult to pay your EMI but also has a negative impact on your credit score. Given this, your two-wheeler loan provider must allow you to choose your own EMI by selecting a favourable loan tenure. A flexible EMI option not only makes it easier to pay your EMIs on time but also makes it simpler to manage your budget.

Type of bike:

Are you aware that the interest rate on your two-wheeler loan is also determined by the resale value of your bike? If not, note down this point right away. Since in a bike loan, the lender hypothecates your bike, and in the event of default, they have the right to auction the same to recoup their losses. As such, the resale value of your bike becomes crucial in the eyes of the lender. Therefore, when choosing a two-wheeler, consider not only the mileage, comfort, and appearance but also the resale value to get a better deal on your two-wheeler loan.

Don’ts for Two-Wheeler Loan: 

Here are some of the pointers that you must avoid while applying for a two-wheeler loan.

Avoid Applying for Multiple Loans:

Applying for multiple loans with different lenders not only affects your credit score but also conveys the impression to the lender that you may reject their loan offer. Therefore, when applying for a two-wheeler loan, make a list of your favourite lenders, evaluate their minimal qualifying conditions, loan processing time, and interest rates and offers. Doing so will enable you to do a more accurate comparison between different lenders, allowing you to quickly select a lender that offers the most affordable two-wheeler loan in the market.

False information:

When filling your two-wheeler loan application form, never furnish the wrong information. Nowadays, financial institutions leverage technologies to cross-verify your details and documents. Any incorrect information can now easily be discovered, and the lender will not only reject your application but may also put you on a blacklist, preventing you from applying again.

Avoid Overborrowing:

In your normal days, how many times have you been enticed by a lucrative loan offer? Twice? Or is it thrice? Overstretching your budget or upgrading your bike just because your lender offers a huge discount or a pre-approved two-wheeler loan is not a wise decision. The reason for this is that, in the long run, overborrowing has a negative influence on your budget and may end in loan default. As a result, choose a bike that fits your budget and a loan amount that you can pay back without difficulty. To determine the EMI that you can afford, use a two-wheeler loan EMI calculator.

Never Skip your EMIs:

One of the most common mistakes made by two-wheeler loan borrowers is skipping EMIs while having an adequate income. Deferred EMI payments, on the other hand, have a negative influence on your credit score. Defaulting your EMIs frequently may result in the sale of your dream bike at an auction. As a result, pay your monthly instalments on time to avoid any trouble.

To Conclude:

To make your two-wheeler loan application process smooth and simple and to get a low-interest loan, follow the above do’s and don’ts.

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