Owing to the enormous population of India and the increasing number of vehicles on roads, traffic jams have turned into a daily nuisance. That is why many people ride two wheelers due to their compact size and less fuel consumption. Two wheelers also look stylish and sporty, making them a favourite among college-going students and youngsters. Since two wheelers serve as a practical means of transport in India, many people look forward to purchasing one. This is where two wheeler finance comes into play.
When it comes to purchasing a two wheeler, there are two options to fund its cost: funding it from savings or applying for a two wheeler loan. These days, many NBFCs offer readily available two wheeler loans that serve several benefits over buying a bike from savings. Let’s look at a few reasons why one should opt for a loan while buying a two wheeler.
100% On-Road Bike Price: Borrowers applying for a bike loan get 100% of the bike’s on-road price in certain conditions. Therefore, there is no need to make any down payment while purchasing a two wheeler with a bike loan.
Choice of Convenient EMIs: The borrowers can devise their repayment strategy by choosing a repayment tenure with convenient EMIs. Since most NBFCs offer flexible repayment tenures on bike loans, borrowers must use a bike EMI calculator to calculate the EMIs suitable to their budget. Choosing a convenient EMI plan helps maintain timely repayments and keeps the borrower stress-free.
The Asset Serves as the Mortgage: Simply put, the bike purchased serves as the collateral for the two wheeler finance. There is no need to put any other asset or property as a security against the loan. As a result, if things go downhill and the borrower fails to repay the loan amount, the worst that can happen is that the lender will seize the bike. So, there is not much to lose.
Easy Eligibility: The very essence of availing loans from NBFCs is that they have simplistic eligibility conditions that almost anyone can fulfil. The eligibility conditions are only related to the applicant’s age and income. Any salaried employee or self-employed individual within the lender’s age limit requirement can apply for a bike loan.
Minimal Documentation: Many borrowers are worried about the documents they will need to submit to the lenders. However, NBFCs offering bike loans these days have minimal documentation requirements. An address proof, identity proof, and income proof are sufficient to apply for a two wheeler loan.
Low Interest Rates: Two wheeler loans typically have low interest rates that do not add much to the cost of the bike. However, the interest rate applicable to a borrower’s loan application depends on their loan amount, repayment tenure, income, vehicle’s brand and type, credit score, and other factors. Since the interest rate largely impacts the EMI amount, choosing a bike loan with low interest rate significantly minimises the overall loan cost.
No Need to Compromise: When an individual decides to fund a bike purchase from their savings, they have a limited amount within which they have to choose a suitable bike. However, when they have a two wheeler loan at their disposal, they can set their heart on a higher model without worrying about the finances. Therefore, purchasing a bike with two wheeler finance will prevent any financial burden while allowing the borrowers to buy their dream bike.
Helps Build Credit Score: Choosing a loan term suitable to the repayment capacity helps maintain consistent EMI payments. With regular EMI repayments, the borrowers get a chance to build their credit score and increase their creditworthiness.
Keep Savings for Emergencies: When an individual funds their two wheeler purchase with a bike loan, they keep their savings intact in their bank account. They may use this cash for personal expenses or emergencies. Instead of spending it on the bike purchase, they may invest that money into stocks, mutual funds, or other assets to grow it over time.
There are innumerable reasons for funding a bike purchase with two wheeler finance. While buying a dream bike, applying for a bike loan will fetch them all. Self-financing is fine, but it is essential to remember that the bike’s value will only depreciate over time, and it’s not worth investing savings into it. Use a bike EMI calculator to choose a loan term with convenient EMIs and make consistent payments to build a credit score.