A Loan Against a Bike from a bank can be a great alternative if you’re in the market for a two-wheeler but need funds to buy one. You can quickly get on the road thanks to affordable interest rates and adaptable repayment arrangements.
However, you must meet specific qualifying requirements and have a reliable source of income to begin the procedure. You’ll also be required to provide several documents. After application approval, the bank will pay the loan to the dealer or seller from whom you buy the bike.
This post will take you step-by-step through the whole application procedure for a Loan Against a Bike, including eligibility criteria, documentation requirements, and repayment alternatives.
Why Choose a Bank to Finance Your Bike?
In India, banks are among the top financial institutions which provide a variety of banking goods and services. Loan Against a Bike or Bike Loan is one of its most popular services. For taking this type of loan, you should take into account the following factors:
- Simple and Speedy Application Procedure: You can apply for a Bike or Two-Wheeler Loan with the banks’ user-friendly online application systems in just a few simple steps.
- Affordable Interest Rates: You can borrow money at reasonable rates because most banks offer affordable interest rates and EMIs as low as Rs 36 per 1000 on Bike Loans.
- Flexible Alternatives for Repayment: Banks let you select a payback period that fits your spending plan and financial objectives. You can use Equated Monthly Instalments (EMIs) to repay the loan over 12 months to 7 years.
- Easy documentation: Most institutions require a small amount of paperwork for Bike Loans, so you can rapidly receive approval and payment.
Now that you know the benefits, here’s the application process for Two-Wheeler Loan online approval.
Step 1: Make Sure You’re Eligible
You must determine your eligibility for a Bike Loan before applying for one with a bank. Applicants should consider the following factors for such kinds of loans:
- Age: For availing of a Bike Loan, the salaried individual must be at least 21 years old. If applying as a co-applicant, the minimum age must be 18 years.
- Income: You should have a job or should be self-employed.
- Employment: You should have worked for a company for at least 6 months or been self-employed for a minimum of 1 year.
Step 2: Collect the Necessary Paperwork
After determining your eligibility, the next step is to gather the needed paperwork for your Bike Loan application. The following are the necessary documents:
- Identity Validation: Passport, Voter ID Card, Aadhar Card, PAN Card, and Driver’s Licence
- Address Evidence: Passport, Voter ID Card, Driver’s Licence, Utility bills, and an Aadhaar Card
- Income evidence:
- Form 16/ Latest Salary Slips for salaried professionals
- Bank statements
- ITR (last one year) for self-employed professionals
- Photographs: Two passport-sized photos
Step 3: Request A Two-Wheeler Loan
Once you have the required documentation, you can apply for a Bike or Two-Wheeler Loan from the bank. Choose the “Bike Loan/Two-Wheeler Loan” option on the bank’s website. Provide all the essential details and submit the required documentation. Send your application in at the conclusion. Upon consideration of your application, the bank will notify you of its decision.
Step 4: Avail The Loan
The bank will offer you the loan contract if your application is accepted. The bank will put the money in your account when you sign the loan agreement. You must provide the bank details regarding your bank account. The bank will verify the information before transferring the funds to your account. You can purchase the bike of your choice with the borrowed funds.
Charges and Interest Rates for Bike Loans
Here is some information on the fees and interest rates for a Two-Wheeler Loan online approval.
- Rate of interest: Depending on several variables, including the loan amount, the payback period, and other considerations, banks offer you Bike Loans at competitive interest rates. The type of bike you buy may also affect the interest rate you are charged.
- Loan Amount and Repayment Period: Most banks offer motorcycle loans up to 100% of the cost of the two-on-road wheeler. According to the borrower’s preferences and financial capabilities, the repayment period can be anywhere from 12 months to 7 years.
- Processor charges: Most banks charge the following a non-refundable processing fee:
- For premium two-wheelers, up to 4.75% of the loan amount plus any applicable GST.
- For super-premium two-wheelers, up to 2.5% of the loan amount plus any applicable GST.
This fee, which includes loan documentation fees, is often subtracted from the loan amount at the time of disbursement.
- Repossession fees: The bank may impose a foreclosure fee if a borrower chooses to prepay their Bike Loan before the term has run its course. The exact cost might change depending on the loan’s remaining term and the amount still owed.
- Charges for late payments: The bank may impose a penalty fee of up to 2% of the amount past due if the loan EMI is not paid on time. It is usually essential to ensure that EMI payments are made on schedule to prevent additional fees.
When applying for a loan, it is wise to check your credit report and make sure you have the means to pay it back.
Advice to Consider When Applying for a Bike Loan
Following are some pointers to keep in mind when requesting a Bike Loan from the bank:
- Pick the appropriate bike: Select the bike that best meets your needs and budget before applying for a Bike Loan. The price of fuel, maintenance, and insurance should also be considered.
- See the conditions in writing: Carefully read the terms and conditions before signing the loan agreement. Thanks to this, you will better comprehend the loan’s interest rate, repayment period, and other terms.
- Compare offers: Loan offers should be compared before acceptance. Be sure to do this before accepting any loan offer. It will make choosing the loan that best fits your demands and budget easier.
Conclusion
A Bike Loan is an excellent choice for buying a bike if you lack the funds. Banks make it simple for you to get the bike of your dreams thanks to their simple application process, affordable interest rates, flexible repayment options, and minimal documentation needs. Check your eligibility, gather the necessary paperwork, and select the bike that fits your needs and budget before applying for a loan. Considering these suggestions, you can receive a Loan Against a Bike from a bank and profit from biking while staying within your budget.