Finance

The Top 5 Things to Consider Before Getting a Two Wheeler Loan

It’s possible that many of us are actively toying with the thought of purchasing a personal two-wheeler. But because of the high cost, which is a typical worry, the easiest way to fund our desire is with a two-wheeler loan. The top 5 factors you should take into account before selecting a two wheeler vehicle loan in India will be covered in this post if you have been thinking about getting one for some time.

Credit Score:

Your credit score, which is based on four basic characteristics and is one of the first and most significant elements lenders take into account when analysing your loan application because the majority of two-wheeler loans in India are unsecured in nature.

  • Loans you have taken in the past
  • Amount of loans you’ve previously taken
  • Timely payments you have made
  • Payments you have missed

Every borrower in India has a credit score out of 900. Most lenders provide online approval options for two-wheeler loans. You must, however, have a long credit history in order to take advantage of this.

Type of Loan:

Both secured and unsecured loans are offered in every category globally, and this holds true for two-wheeler loans as well. A piece of collateral must be put up as security for a secured loan that is worth at least as much as the loan itself. On the other hand, while asking for an unsecured loan, you are not required to put up any assets as collateral.

The majority of two wheeler vehicle loan issued in India are unsecured, although some lenders also offer secured loans, which frequently have lower interest rates.

Tenure of Loan:

The loan’s tenure is the third factor you should think about in order to receive the ideal two-wheeler loan. Most Indian lenders offer durations of 12 to 60 months so that you may control your personal spending as well as the stress of loan repayment. However, since the lender would be taking on greater risk with a longer payback time, you should be aware that the interest rate will normally be higher. Therefore, it is best to get a loan with a shorter term.

Nature of the Interest Charged:

In the realm of lending, there are primarily two types of interest rates: floating and fixed. A floating rate of interest is one where the rate of interest fluctuates over time, depending on a number of variables such as the state of the market, the remaining balance on the loan, your credit score, and the number of previous payments you have made. Few lenders provide two-wheeler loans with adjustable interest rates. An interest rate that is fixed means that it will not change over the course of the loan. It must be mutually agreed upon by the lender and borrower at the time the agreements are signed.

Documents Required:

  • Salaried Professional:

    • Aadhar Cards, PAN Cards, Voter IDs, and other eKYC documents.
    • Income proof, including a pay slip, an ITR, and the most recent bank statement
    • Cancelled cheque and passport size photographs
  • Self Employed Professionals:

    • Aadhar Cards, PAN Cards, Voter IDs, and other eKYC documents.
    • Income proof, including a pay slip, an ITR, and the most recent bank statement
    • Cancelled cheque and passport size photographs

Conclusion:

By taking advantage of the top two-wheeler loan, you can make your goal of owning a bike a reality. Therefore, give the aforementioned factors careful thought and choose properly.

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