The two-wheeler industry has seen a massive expansion in recent times. Owing to the heavy traffic and lack of parking spaces in the metro cities, two wheelers have emerged as one of the most trusted and preferred modes of commuting. If you are looking to purchase a two-wheeler for yourself, you should consider availing a two wheeler loan. However, with a lot of financial institutions available in the market, choosing the right one can be a tough task. It is recommended that you must compare the deals from different loan providers in order to get the best two wheeler loan for yourself. Below is a list of parameters you should consider before you apply for the loan.
Banks and leading Non-Banking Financial Companies (NBFCs) that provide a two-wheeler loan have a minimum and maximum limit for borrowing. Make sure that the financial institution you opt for provides you sufficient loan amount to satisfy your requirements.
There are two types of loans, secured loans, and unsecured loans. A secured loan is the one that is protected by collaterals. With a secured loan, the loan provider can take possession of the collaterals if you fail to repay the loan. On the other hand, unsecured loans are not protected by any collaterals. The down payment for the loan depends on whether your loan is secured or unsecured. Some loan providers offer 100% financing while others finance 80% to 90% of your two-wheeler purchase. In cases where the financial institutions do not provide 100% financing, you will have to pay the remaining amount as a down payment.
The loan term is the time period for which you take a loan and repay the same. Every financial institution has a specific tenure range based on which they provide you a loan. Nowadays, you can also use EMI calculator to check if you can pay the monthly EMIs based on the tenure.
Rate of Interest
The rate of interest at which you avail a two-wheeler loan plays a defining role in the loan repayment. Financial institutions offer two types of interest rates, i.e Fixed, and Floating. Fixed interest rate remains constant throughout your loan tenure, whereas a floating interest rate keeps fluctuating according to the market index. It is always advisable to avail two-wheeler loan with a low-interest rate and flexible repayment period.
Additionally, before availing a two wheeler loan, you should also discuss the prepayment charges, late payment fees, bounce fees and tenure change fees with your loan provider. This will help you avoid any inconvenience in the later stage.
Now that you are well aware of all the essential parameters of a two wheeler loan, ensure that you choose the best deal for yourself. Lastly, you must also read the terms and condition of your two-wheeler loan before opting for it.
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