The Indian two-wheeler market is reaching new heights. Several brands are launching bikes for different purposes, including daily commuters, long riders, adventure seekers, and people from all walks of life. If you plan to buy your first bike with some bike models in mind but need more funds, then bike finance can be the best option. With bike finance, you can secure easy loans and buy your dream bike in less than 24 hours.
Read this blog to learn about specific things to consider before getting bike finance for your first bike.
What is Bike Finance?
Bike finance is a credit facility that helps you bridge the gap between you and the bike you desire. Like all other regular loans, the lender offers you immediate funds to buy the bike, and you repay the loan amount along with interest over a fixed period in the form of EMIs. This method of financing makes it easier to own a bike without needing a large initial payment.
Benefits of Opting for Bike Finance
Below are the various reasons why financing a bike through a loan is a popular option for first-time buyers-
- Affordability: Instead of paying the total amount upfront, bike finance allows you to spend, more manageable EMIs, making the purchase more affordable.
- Flexible Repayment Tenure: Bike loans come with flexible repayment options ranging from 12 months to 60 months, allowing you to choose a tenure that suits your financial situation.
- Minimal Down Payment: In many cases, lenders offer bike finance with a low or no down payment, making it easier for those who may not have a significant amount saved.
- Quick Processing: With streamlined application processes, bike loans are often approved quickly, allowing you to purchase your bike without long delays.
- Build Your Credit Score: Timely repayment of a bike loan can help build or improve your credit score, making it easier for you to secure other loans in the future.
Factors to Consider Before Applying for Bike Finance
Knowing these factors can help you make a wise financial decision-
1. Know Your Budget
Before applying for bike finance, figure out how much you can afford to spend each month on loan repayments. Consider your monthly income, current expenses, and any other financial obligations. Choosing a bike model that fits your budget is essential, even when considering loan payments.
2. Loan Amount
The loan amount will depend on the bike model you choose, the lender’s terms, and how much down payment you are willing to make. Some lenders offer 100% financing, meaning they cover the total cost of the bike, while others may require a down payment. Calculate the total price, including loan interest, before finalising the loan amount.
3. Bike Loan Interest Rate
The bike loan interest rate is one of the most crucial factors before opting for a loan. Interest rates for bike loans vary from lender to lender and depend on factors like your credit score, loan amount, and repayment tenure.
A lower interest rate will reduce your repayment, so it’s always worth comparing rates from different lenders to find the best deal. Look for special offers and promotions from banks and financial institutions that could lower your interest rate.
4. Loan Tenure
The loan tenure is the period you are required to repay the loan. Bike loan tenures usually range from 1 year to 5 years. While opting for a longer tenure can reduce your monthly EMI amount, you’ll pay more interest throughout the loan. On the other hand, a shorter tenure may increase your monthly EMIs but will reduce the overall interest paid.
Choosing a suitable tenure depends on your current financial situation and ability to make timely payments without straining your budget.
5. Eligibility Criteria
Most lenders have specific eligibility criteria that applicants must meet to get approved for bike finance. Common eligibility factors include-
- Age: Applicants must be between 18 and 65 years of age.
- Income: You need to have a stable source of income, either salaried or self-employed, to qualify for a loan.
- Credit Score: Your credit score is key in determining your eligibility and the interest rate offered. A higher credit score can help you secure better terms.
- Employment Status: Lenders prefer applicants who have been employed consistently, usually at least one year.
6. Documents Required
When applying for bike finance, you must provide certain documents to the lender. Commonly required documents include-
- KYC (Aadhaar card, PAN card, passport)
- Address proof (utility bills, rental agreement)
- Income proof (salary slips, bank statements, or income tax returns)
- Passport-size photographs
7. Processing Fees and Other Charges
In addition to the interest rate, bike loans may come with processing fees and other charges, such as prepayment penalties or foreclosure charges. It’s essential to read the fine print and understand all the charges associated with the loan to avoid surprises later.
Read More:
- What is an Instant Loan and How Does it Work?
- PNB Car Loan – Eligibility, Charges, and How to Apply
- How to Apply for ICICI Bank Car Loan
Tips to Get the Best Bike Loan Deal
Here are a few tips to ensure you get the most favourable terms:
1. Improve Your Credit Score
A higher credit score will help you get a lower bike loan interest rate. Improve your credit score before applying for a loan if your credit score is low. Paying off existing debts, making timely payments, and reducing your credit card balance can help boost your score.
2. Compare Different Lenders
Don’t settle for the first loan offer you receive. Compare interest rates, loan tenures, and additional charges from multiple lenders, including banks, NBFCs, and online lenders. This will help you find the best deal that fits your budget.
3. Negotiate the Terms
If you have a good credit score and a stable income, don’t hesitate to negotiate with lenders for better terms. Some lenders may be willing to reduce the interest rate or processing fees if you ask, especially if you have a strong credit profile.
4. Choose a Shorter Loan Tenure
While longer loan tenures may seem attractive due to lower monthly EMIs, they also mean you’ll pay more in interest over time. If you can afford higher monthly payments, choose a shorter tenure to save on interest costs.
Conclusion
Getting your first bike through bike finance is a convenient and affordable way to fulfil your dream of owning a two-wheeler. By understanding the factors that affect bike loans, including bike loan interest rates, loan tenures, and eligibility criteria, you can make an informed decision and find the best loan option.
Remember to compare lenders, negotiate for better terms, and use an EMI calculator to plan your repayments. With careful planning, you’ll enjoy the benefits of your new bike without straining your finances.
Disclaimer: The information provided in this blog post is intended for informational purposes only. The content is based on research and opinions available at the time of writing. While we strive to ensure accuracy, we do not claim to be exhaustive or definitive. Readers are advised to independently verify any details mentioned here, such as specifications, features, and availability, before making any decisions. Dev Library and Hero FinCorp does not take responsibility for any discrepancies, inaccuracies, or changes that may occur after the publication of this blog. The choice to rely on the information presented herein is at the reader’s discretion, and we recommend consulting official sources and experts for the most up-to-date and accurate information about the featured products.
Hi, I’m Dev Kirtonia, Founder & CEO of Dev Library. A website that provides all SCERT, NCERT 3 to 12, and BA, B.com, B.Sc, and Computer Science with Post Graduate Notes & Suggestions, Novel, eBooks, Biography, Quotes, Study Materials, and more.
