In today’s scenario, having a vehicle have become a necessity more than a luxury. Some prefer having a car and some prefer having a two wheeler vehicle. Two wheeler are preferred mainly because of their easy handling and maintenance and lower price than cars and other 4 wheeler vehicles. A two wheeler loan helps you in buying any kind of two wheeler like bikes, scooty or scooters. It can either be a secured loan(in which you pledge a collateral) or an unsecured loan.
Even people who have enough finances to buy a two wheeler in cash also prefer taking a bike loan because of many benefits it offers like:
- A two wheeler can be approved in a short period of time(usually in two to three working days).
- There is usually no or very minimal foreclosure penalty if you want to repay the loan before the tenure.
- You can either apply for it online or offline. Online procedures are easy to follow and have made taking a two wheeler loans easier for the customers.
- While banks check the credit score of most of the customers who want to take a two wheeler loan, there are other non banking financial organizations also who offer loans to customers even with a bad credit score.
- There is no requirement of a third party guarantor in order to take a two wheeler loan.
- Two wheeler loans usually cover some of other expenses too like insurance of your vehicle, registration and accessories charges.
- Reduces your financial burden as you can pay the cost of your vehicle in installments instead of paying it at a time.
- Most of the banks offer loans up to 90% of the on-road price of the vehicle which makes it easier for you to buy any two wheeler vehicle as per your choice.
- Female customers may also get additional discount on the interest rate up to 0.5%.
- Most of the banks provides flexible replacement options for the customers so that the customers can easily pay their loans as per their convenience.
Eligibility for taking a two wheeler loan:
These are a few points that decide if you are eligible for a two wheeler loan:
- The minimum gross income required varies from Rs. 54,000 to Rs. 84,000 in metro cities and from Rs. 40,000 to Rs, 42,000 per annum in other cities.For a self employed person the minimum gross income needs to be INR 72000 per annum.
- Minimum age should be 21 years and maximum age should be 60 years or 65 years at the end of the loan tenure in case of salaried individual or self employed individual respectively.
- One needs to have resided for at least a year at his current or given address.
- One needs to be employed for at least a year.
- One should maintain a good credit score(above 750).
These are a few commonly required documents which almost every bank or financial organization will ask from you:
- Passport size photographs.
- Proof of identity like Passport, PAN card, Voter ID card, Aadhar card, driving license etc.
- Proof of address like Passport, Voter ID card, Aadhar card, electricity bill, telephone bills, bank statements of last 6 months etc.
- Employment proof like latest Form 16, bank statements or salary slips etc.
Important points that you should always remember before taking a bike loan:
- Fees and charges: Other than the principal and the interest rate, you also have to pay other charges like the processing fee. Before you take a home loan, you should consider the extra fee and charges that you have to pay.
- Credit score: Your credit score plays an important role in deciding how easily can you get a bike or a two wheeler loan. Higher the credit score, higher the chances for the approval of your loan application.
- Complete documents: Before submitting the application, you should check that you are submitting all the required documents also along with the application form.
- Research for the best option: When you apply for a bike loan, you should compare the deals from as many bike loan providers as you can so that you can choose the best plan for yourself.
- Compare the interest rate: Every bank charges different rate of interest on their loans. So before you finalize the loan compare the deals from other banks also.
Here is a comparison of the interest rates charged by top most bike loan providers:
|Bank||Two wheeler interest rate|
|Andhra Bank||Loan term up to 3 years||MCLR + 1.80%|
|More than 3 years||MCLR + 1.80% + 0.25%|
|Bank of Baroda||One year MCLR + Strategic Premium + 4.00%|
|Bank of India||For a new vehicle, for all tenures within the repayment period of the scheme||BSS (0.10%) above 1 Year MCLR (Presently 9.50 %)|
|Bajaj Finserv||Customers are segregated into three bands, namely,|
|Medium||27% to 30%|
|Central Bank of India||Interest rate(floating)||MCLR + 0.40%|
|Interest rate(fixed), repayment within 3 years||MCLR + 0.40%|
|City Union Bank||Base rate||Base rate + 7% = 17.50%|
|BPLR||PLR + 1% = 17.25%|
|HDFC||Super Bike Two wheeler Loan||APR: 9.96% to 15.74%||IRR: 9.95% to 15.50%|
|Two wheeler Loan||11.37% to 33.15%||11.01% to 24.07%|
|L & T Finance||Upto 23%; actual rate varies on fluctuations in market and credit worthiness of the borrower|
|Nainital Bank||Base rate + 0.25% (Floating)|
|Oriental Bank of Commerce||Upto 36 months||BR + 0.50% = 10.20%|
|Upto 84 months||BR + 0.75% = 10.45%|
|Punjab & Sind Bank||New Vehicles Two Wheeler||One Year MCLR (9.60%)+ 2.00% = 11.60% One year MCLR+3.10% (PER: 13.40% p.a.)|
|Lakshmi Vilas Bank|
|Punjab National Bank (14.50 %)||In which monthly income is being paid via concerned branch and/ or under check off facility||< 3 years||MCLR+3.10%|
|equal to 3 years||MCLR+3.60%|
|For every other loan including Business concerns||< 3years||MCLR+4.10%|
|equal to 3 years||MCLR+4.60%|
|Power Ride||Upto 36 months||MCLR+1.60%|
|Saurashtra Bank||Repayment Period upto 3 Years||15%|
|Repayment Period above 3 Years, upto 5 years||16%|
|SBI||MCLR + 3.00% = 12.10%|
|Shriram City Union Finance||At the lender’s discretion on the basis of schemes opted by the borrower|
|State Bank of Mysore||Upto 5 years||MCLR + 6.55% = 16.05%|
|State Bank of Patiala||Interest rate(floating)||15.75% p.a. i.e. 6.25% above MCLR|
|Interest rate(fixed)||16.00% p.a. i.e. 6.50% above MCLR|
|State Bank of Travancore||Rs.50000 and below||13.85%|
This table displays the rate of interest charged by different banks. On the basis of the above mentioned factors, you can decide the bank from where taking the loan will be best for you.