You’ve decided to secure a bike loan to save yourself from the hassle of digging into your savings to make an upfront lump sum payment. While it’s a smart move, you are unsure how to proceed. Eligibility, bike interest rates, term, credit score—you are bombarded with so much confusing jargon online that you wish someone experienced could patiently guide you through the process. Well, consider your wish granted!
Follow the six easy steps mentioned in this guide to apply for your bike or scooter loan.
Step #1: Research bike finance options
In India, banks, non-banking financial companies, and fintech firms provide loans. Navigating through the sea of financers to find a trustworthy lender for your loan can be challenging. You can try out several approaches. Begin by asking your family and friends for recommendations. If that does not help, explore bike loan options online, create a comparison chart, and choose the most suitable and affordable lender. As a general guideline, a lender can be considered the best if they have:
- Many years of experience
- A website and social media presence
- Success stories and verified customer reviews
- EMI calculator tool
- Professional customer service
- Transparent terms and conditions
- Easy online loan application process
- Quick loan approval
- Low bike interest rates
- Minimal additional charges
Step #2: Check your eligibility
The next step would be to assess whether you are qualified to apply for the bike loan. While every lending institution will have its specific eligibility criteria, more or less, the following standard factors are taken into consideration:
- Minimum age: 18-21 years
- Maximum age: 60 years
- Nationality: Indian
- Profile: Salaried, self-employed, homemaker
- Credit score: The higher, the better
- Bank account: Operative
- Documentation: Identification, residency, and income proof
Step #3: Calculate EMI and choose a repayment tenure
Once you’ve selected a bike finance company and confirmed your eligibility, it’s time to use an online EMI calculator to estimate the monthly repayment amount post your loan approval. The EMI calculation involves three essential components: the loan amount, annual two-wheeler loan interest rate, and time period in months.
Let’s look at Rajat’s example to understand this concept better. He wants to purchase an EV bike priced at ₹1,00,000 and discovers the scooty loan interest rate is 5%. He explores a few different combinations to determine the most manageable repayment tenure.
- Shortest tenure (12 months): When he chose the shortest period, the EMI amount was highest at ₹8,750. However, the total interest payment was the lowest at ₹5,000.
- Longest tenure (48 months): When he chose the longest period, the EMI amount was lowest at ₹2,500. However, the total interest payment was the highest at ₹20,000.
After carefully considering his income, monthly budget, and financial goals, Rajat concluded he could afford a monthly payment of around ₹5,000. So, he settled on a repayment tenure of 24 months.
Step #4: Find out the down payment
In addition to calculating your EMI, remember that you may have to make an initial upfront payment, which will be a certain percentage of the total loan. 0 down payment loans are possible in specific situations, such as when the borrower has an outstanding credit history, or the bike finance institutions have special offers.
Step #5: Check special offers
Banks or financial companies release special offers during festivals, company milestones, product launches, and clearance sales. You can benefit from surprisingly low two-wheeler loan interest rates, down payment, and processing fees. So, keep an eye out for such steal-of-a-deal offers!
Step #6: Review the loan application process
Most reliable companies, such as Manba Finance, offer a proper step-by-step guide to apply for a loan via their website. It’s pretty straightforward: register, enter personal details, select your preferred two-wheeler, get loan approval in a minute, complete formalities, and secure your bike or scooter loan!