In life, there are many financial milestones that give us a sense of accomplishment such as purchasing vehicles, owning a house, etc. You may think that you just graduated and reaching that first milestone is probably a couple of years away. That is why we want to tell you everything you need to know about getting a two-wheeler loan so you can fulfill your dreams quickly.
Our two wheeler loan guide will help you with a step-by-step process to help you choose and acquire a suitable loan and meet your financial milestones.
What are two wheeler loans?
A two-wheeler loan is a type of Auto loan. It helps you purchase scooters, motorcycles, mopeds, and other two-wheeled vehicles. The loan is provided at the time of purchase and you can repay it in installments. Several banks and non-banking financial institutions offer two wheeler loans.
Why should you get two wheeler loans?
There are several reasons why getting two wheeler loans is a better idea than paying with personal funds:
- Helps save funds for emergencies –
Instead of using your personal funds for paying for a vehicle, you can invest the money or save for financial crises.
- Safe and trustworthy —
Two-wheeler loans are safe and trustworthy and can be availed instantly. Alternately you can opt for a personal loan for your two-wheeler for quick processing without documents
- Tax advantages –
When you purchase and use a vehicle for commercial use, you get multiple tax benefits. The amount paid towards interest repayments is tax-deductible.
- Depreciation benefits –
A vehicle that is used for professional and business purposes also has depreciation benefits. The vehicle insurance, repayment of the loan, maintenance charges, etc. are also exempted from your profits. Therefore, you can claim them as company expenses.
- Credit profiling –
Borrowing and repaying loans helps in building your credit portfolio. This contributes to benefits on future loans such as easy availability, lower interest rates, etc.
Acquiring two wheeler loans help you save money in the long run. It is far more beneficial to get two wheeler loans to start meeting your life goals.
How to apply for two wheeler loans?
These days you can avail of any loan online. The process is quicker and requires less documentation. Here is a step-by-step two wheeler loan guide to help you get that vehicle you want:
Step 1: Research and compare two wheeler loans
This is the first and most important step when you apply for two wheeler loans. Don’t fall for the first offer you see. Search for different loan providers and compare their usual interest rates, percentage of loan approvals, requirements, etc. Make an informed decision as two wheeler loans at appropriate rates can help you save money. You can choose from an array of banking facilities as well as non-banking financial institutions.
Step 2: Visit the website or the mobile application
Once you have chosen your lender for the loan, visit the company website or the mobile application. Check the details of the loan and the rates of interest that they are offering. Be proactive and call the helpline number if something is unclear.
Step 3: Check the eligibility criteria for Two-wheeler loans
Here are the eligibility criteria you need to check in order to qualify for two wheeler loans:
- Age limit –
Two-wheeler loans are usually applicable to salaried candidates over the age of 21 and below the age of 60. The borrower must be 60 years of age or lower when the tenure of the loan ends. Check with your chosen lender if they accommodate more lenient age limits.
For self-employed professionals, the age limit is 21 to 65 years. The borrower must be 65 years or below when the tenure of the loan ends.
- Residential proof –
In order to avail of two wheeler loans, you must have resided in the city for at least a year with a local residential or professional phone number.
- Income criteria –
Different banking and non-banking organizations have different minimum income criteria. Check with your lender for their specific income requirements.
- Credit score –
In order to sanction two wheeler loans, the institution will require the status of your financial behaviour. They will need to know if you have any outstanding loans and if you pay them on time. This criterion is easily verified with your credit score.
Step 4: Evaluate your two-wheeler loan requirements
Calculate your requirement of loan amount based on the cost of the vehicle and your down-payment.
Step 5: Use the EMI calculator
You can use an online EMI calculator to check the installments you will need to pay every month. Just enter your desired loan amount, rate of interest, and the tenure that the lender offers. Usually, two wheeler loans are available for 1 to 3 years. Several institutions also offer a 5-year tenure.
The EMI calculator will evaluate the results based on the data you provide. You can choose a higher or lower loan amount based on the results.
Step 6: Submit your application
You can fill out two-wheeler loan applications online. Remember to enter your personal details correctly as they will be verified.
Step 7: Verify your details
An executive from the bank or non-banking financial institution will contact you to verify your personal details and loan requirements. If you have any queries, you can discuss them too.
Step 8: Share the relevant documents, if necessary
You can upload your e-copies of the relevant documents online. You can also submit physical copies of the documents required at the location of the financial institution. If you apply for personal loans on the mobile application, all your need to submit is your PAN and Aadhar number and the rest of the details would be verified from there without having to physically submit the documents.
Once you complete these steps, the lender will verify the details and documents. They will then authorize your two wheeler loans so you can go ahead and purchase your desired vehicle.
What are the documents required for two wheeler loans?
Usually, two wheeler loans usually require very little documentation. You will need to provide e-KYC or copies of the following:
- Identity proof – Aadhaar card, Voter ID, Passport, Driving license
- Address proof – Aadhaar card, driving license, voter ID, passport, bank passbook.
- PAN card
- Proof of income – Income tax returns, Form-16, salary slips, etc.
- Passport-size photographs – 2
- Updated bank statements – Passbook
Two-wheeler loans are easy to attain and repay. They also provide tax and depreciation benefits which only add to your financial portfolio.
We hope you found this two wheeler loan guide useful in acquiring your loan.