Why Opt For A Loan To Purchase A Bike Or Scooter?

Are you fed up with juggling hectic schedules and paying outrageous taxi costs during rush hour? Are you annoyed that you can’t locate cars when you need them the most? So why not purchase yourself a two-wheeler to avoid all those hassles? Get a bike loan or two wheeler loan.

Nowadays, two-wheelers have become the most common means of transportation and have the highest market demand. It’s no longer just a fashion statement; it’s a necessity for the common citizen. For a young person, a bicycle is a fashion statement; for an adult with a company, it is a means of transportation to go to the store; and for an older person with a professional career, it is a means of reducing the amount of time it takes to go to work.

Two-wheeled vehicles are gaining popularity because of their accessibility and affordability. Two-wheelers are better for long-distance transportation because they are lightweight, inexpensive, and quick.

Everyone cannot afford to buy a dream bike with their savings. Because some of the bikes are more costly than we imagined, and most of the people couldn’t pay all at once. So, they should consider the need to request for a loan for a two-wheeler. Even those who have enough money sometimes have difficulty deciding between these two financing choices. Get a bike loan or two wheeler loan.

If you’re looking to purchase a bike or scooter by taking a loan, use Ontrack’s loans product. We’ve partnered up with IDFC to make the entire process really smooth and easy going. You’ll get an approval within 60 seconds. You can also check out our app and rent a bike in 3 easy steps: Ontrack App | Bike rental in Bangalore.

Here are some of the reasons to opt for a loan to purchase a bike or scooter:

1: 100% On-Road Price.

Whenever you opt for a personal loan to purchase a new two-wheeler vehicle, whether a motorbike or a scooter, you can take advantage of financing that covers the entire on-road pricing of the vehicle. Most lenders only provide financing up to 90%, which is a huge benefit. Thus you are only required to make 10% of the balance amount as a down payment. In this manner, you can avoid being concerned about making hefty mortgage down payments. If you want to buy a car with a two-wheeler loan, you might be asked to make a specific amount of money toward the purchase as an up front.

2: No Down Payment Is Necessary.

A little down payment is necessary while purchasing a two-wheeler. After negotiating with your lender or bank, you will be expected to decide on the down payment amount. Since, most of the time, they will only provide financing for 80–90% of the vehicle’s cost once it has been removed from the dealership. On the other hand, if you opt to purchase a motorbike with the help of your personal loan, you won’t be required to make any kind of initial deposit or down payment. The cost of your bike will be fully financed. But it’s recommended to give some down payment because it will reduce your overall interest cost. Get a bike loan or two wheeler loan.

3: Even if you have no Credit History, you can still obtain a Loan.

In most cases, people purchase their first bike immediately after graduation or upon starting their first job. During such circumstances, one might not have any credit history because they have not yet applied for any kind of financing. When you apply for a two-wheeler loan, your lender will request information regarding your credit history or a CIBIL score. You cannot get approved for a bike loan if your credit is poor. You may postpone applying for a two-wheeler loan for a while, increase your credit score, and then apply for one. Simply submit a personal loan application. Even when applying for a personal loan, you’ll need to provide your CIBIL score to the lender. However, some lenders will accept to provide you with a personal loan after examining your financial info, employer information, work status, investments, etc. Your loan request will probably get approved if your creditor is pleased with your financial situation and confident that you’ll be capable of repaying it on time. After that, you can spend it to purchase the vehicle of your choice. Get a bike loan or two wheeler loan.

4: No need to hypothecate the two-wheeler.

Whenever you obtain a loan to buy a bike or scooter, the lender often will require that you hypothecate your bike until the debt is paid off. This implies you’ll have to register your new bike using your bank or NBFC (Non-Banking Financial Company). The ownership of the bike won’t be transferred to your name until you’ve paid the full-due amount. To hypothecate your bike, you must go through a lengthy paperwork procedure at the Regional Transport Office (RTO). You will also need to pay money for this procedure. Lenders often require borrowers to get a no-objection certificate (NOC) once the loan has been repaid in full before purchasing any two-wheeler. The NOC fees are often quite expensive. Instead, if you just took out a personal loan, you wouldn’t have to bother about any time-consuming hypothecation procedures or extra fees. You can save time and money by choosing this less complicated method to purchase your new vehicle. You will just need to pay a processing charge for a personal loan, which is often up to 2% of the loan’s total amount. This charge may vary from one lender to another.

5: Interest rates are low.

If you decide to finance the acquisition of your bike with a personal loan, then the interest rate you’ll be subjected to will most likely be quite reasonable. When compared to loans for only a motorbike or another sort of two-wheeled vehicle, personal loans often have lower interest rates. The interest rate that will be applied on your motorbike financing will be based on a variety of factors, including your income, the loan amount you’ll need, the length of the loan, the specifications of the two-wheeler, the age of the vehicle, and other factors. If the following factors do not fulfill your lender’s qualifying requirements, you might be charged an extremely high-interest rate. Your total loan costs will be significantly influenced by interest. If your interest rate is low, your loan expenditure will also be cheap because your equated monthly installments (EMIs) will be reasonable. However, if your interest rates are high, your loan expenditures will also be significant because of large EMIs. You should check into a personal loan if you want to buy the bike of your dreams but don’t have a lot of money to put down on it. In this situation, it wouldn’t even matter how old your vehicle is or what kind of motorbike it is. Get a bike loan or two wheeler loan.

6: Simpler Qualification Standards for Personal Loans.

They are less complicated than two-wheeler loans. Your minimum income threshold should be somewhat higher for a two-wheeler loan. If you have a stable source of income every month, paying back a personal loan shouldn’t be a problem. As a result, with an affordable personal loan, you will purchase that awesome bike that you’ve been looking for in your local bike store or online.

7: Smaller Tenure for Personal Loans.

Personal loans have shorter repayment terms. The typical personal loan term is between six months and five years. If you have a short tenure, you won’t be required to pay interest for an unreasonable number of months because you will have paid off the principal. You can easily repay your loan quickly if you’re diligent with the money. You save a lot of money whenever you opt for a short to medium-term with lower interest.

If you’re looking to purchase a bike or scooter by taking a loan, use Ontrack’s loans product. We’ve partnered up with IDFC to make the entire process really smooth and easy going. You’ll get an approval within 60 seconds. You can also check out our app and rent a bike in 3 easy steps: Ontrack App | Bike rental in Bangalore.wheeler loan.

Eligibility Criteria For A Two-Wheeler Loan

FactorsRequirements
AgeBetween 21 and 65 years of age. Some banks have minimum age as low as 16 for mopeds and electric scooters
Credit ScorePreferably 750 and above. However, a score below 750 will make you eligible but the interest rate would be higher
Minimum Annual IncomeINR 75,000
Employment StatusSelf-employed or Salaried

Documents Required For A Two-Wheeler Loan

Type of DocumentsRequirement
Photo Identity Proof2-6 passport size photographs
Identity ProofThe following are considered as identity proof:PAN CardPassportAadhar CardDriving LicenseElectoral Voter ID Card
Proof of EmploymentFor self-employed Individuals:The Last Form 16Proof of income sourceBank StatementFor salaried individuals:Salary SlipsOffer letter or letter of employmentBank Statements

Tips for obtaining the best two-wheeler loan.

  • Get in touch with your bank to negotiate a lower rate of interest.
  • Purchase your two-wheeler around the festivities for extra discounts and offers. Aside from that, banks also provide free insurance and no processing fees.
  • If you have a great credit score, you must bargain with the banks for a cheaper interest rate.
  • Calculate how much you can afford to borrow with a two-wheeler loan calculator. Don’t borrow too much, or you’ll have difficulty paying the loan back.
  • Before approving a two-wheeler loan, banks verify that you’re repaying previous debts. Before requesting a loan, pay off any credit card or personal loan debts.
  • Choose a repayment strategy with adjustable EMIs to ensure you never miss a payment. Spend much upfront to get smaller minimum repayments and a shorter term.
  • Before signing your loan agreement, ensure you fully understand the terms and conditions.
  • Consider a longer loan term to prevent difficulty with payback.
  • When purchasing a bike, pay close attention to the insurance and registration fees.
  • Check with your bank to see if there are any prepayment penalties associated with the loan if it is paid off early. Take a look at expenses, late payment penalties, etc. Get a bike loan or two wheeler loan.

Benefits of a two-wheeler loan.

  • You are free to choose the motorbike of your choice. Your two-overall wheeler’s on-road price can be financed fully by the bank.
  • Don’t buy a bike with your emergency funds. Get a loan for a two-wheeler and pay it back over time with simple installments.
  • When you return your loans on time, you will ultimately improve your credit score. It enables you to get better rates on your next loans.
  • Even if your salary is on the lesser side, the bank will nonetheless give you approval for the loan for the two-wheeler.
  • You get a tax break when you obtain a loan for the electric scooter from a bank. Under Section 80EEB of the Income Tax Act, you may claim a deduction for interest payments of up to Rs 1.5 lakh every year. Your loan approval date from the bank must fall between 1 April 2019 and 31 March 2023.

Bottom Line 

It is clear that two-wheeler financing has advantages over a cash purchase. You can save money for an emergency, improve your credit score, take advantage of tax advantages, and enjoy special deals and rewards.

Despite all of its advantages, it’s up to you to negotiate the best price for your purchase. You may need to compare prices, confirm your eligibility, and carry out in-depth market research for all of this. It’s best to consider all of your alternatives before making a choice. But once you do, you’ll be very close to driving your dream vehicle home.

You can also check out our app and rent a bike in 3 easy steps: Ontrack App | Bike rental in Bangalore.

t a bike loan or two wheeler loan.

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