Looking for a brand new bike, but don’t have enough funds? For your ease, banks and other financial institutions have started providing two-wheeler loans to help you in purchasing your favorite vehicle. The lender will convert the loan amount into Equated Monthly Installments (EMI) which you have to pay on a monthly basis.
But, before taking a loan, be aware and choose a reliable institution for your two-wheeler financing. Always go with the lenders providing loans at the low-interest rate and have safe and secure repayment options.
Through this article, you will get to know about the bike loan, the entire procedure of getting a loan, the bike loan EMI calculator and the factors that affect your EMI.
Important Facts about Bike Loan
Bike Loan is a two-wheeler loan designed to help you in purchasing your selected vehicle. Many banking and non-banking institutions are involved in providing this loan. A few important pointers regarding Bike Loan are as follows:
- Loan Eligibility Calculator: Designed to check your eligibility for getting a loan. You have to fulfill some criteria for becoming an eligible candidate.
- EMI conversion: Around 80% of the total bike price can be converted into EMI i.e. you have to pay only 20% amount as a down payment to the bike dealer.
- Type of Profession: The loan facility can be availed by anyone, no matter if you are a salaried individual or a self-employed person. Even a student can avail the benefit of this loan if the guarantor has a good CIBIL or credit score (700 or more).
- ROI: The interest rate of bike loans may vary depending on various factors.
- Available EMI options: The moneylender will select the best EMI options for you according to your loan tenure and the loan amount.
Eligible Candidates for Availing Loan on Two-Wheelers
|Eligibility Criteria||Self-Employed||Salaried Professional|
|Income||Min. 2.5Lakh/ annum||Min. 1.5 Lakh/ annum|
|Age||21-65 years||21-58 years|
|Working Status||Min. 1 year||Min. 1 year|
|Income Proof||3 months bank statement||3 months bank statement|
Types of Bike/ Two-Wheeler Loans
There are generally two types of Bike Loans i.e. secured and unsecured. Let’s discuss them:
- Unsecured Loan
An unsecured loan is a kind of personal loan that does not require any type of security (asset/ property/ gold, etc.). It has a high-risk factor.
- Secured Loan
A secured loan is provided against the security like a bike or any other collateral. If you cannot repay the loan the moneylender (bank or NBFC) has a right to take action against you and seize your asset.
Get to know about Bike Loan EMI Calculator
Loan EMI Calculator is used by lenders to calculate the EMIs for the bike you want to purchase. It helps in the calculation of:
- Total payment including both principal amount and payable interest
- Total interest payable
- Loan EMI/ per month
Advantages of EMI Calculator
- EMI Calculator is an easy-to-access online tool that instantly calculates your monthly EMIs. It not only saves your time but also reduces your workload of manually calculating the EMIs.
- As the tool delivers results instantly, you can quickly check your EMI amount for different values.
- The tool provides accurate results, so be sure that the value of the EMI you are getting via the EMI calculator is 100% correct.
Calculation of Bike Loan EMI via EMI Calculator:
EMI loan calculator provides an easy way to calculate the two-wheeler loan EMI. You have to just enter 3 values to know about your EMI amount:
- First of all, enter the required loan amount
- Next, choose the ROI and
- Finally, fill the loan tenure
5 important factors that affect the EMI of the bike loan
There are many factors that affect the bike loan EMI of which the 5 major ones are described below:
- Credit Score
- Loan Tenure
- Type of loan (secured or unsecured)
- Dealer’s location
- Loan Amount Requirement
Credit Score: The credit rating agencies provide you with a score after considering many factors. This score is regarded as a Credit or CIBIL score.
- It is the first and the most important factor that any financial institution could consider before sanctioning a loan.
- A good credit score (above 700) helps you in getting a loan in an easy way.
- For a high credit score, you have to maintain a good income.
- Moreover, it highly depends on the aspects like the number of currently running loans, timeliness of loan repayment, missed repayment, and more.
So, to increase the chances of getting the loan amount, it is mandatory to build a good credit score.
Loan Tenure: The loan tenure period is directly proportional to the interest rate and the risk factor as well. So, always choose shorter loan tenure to avoid paying extra ROI to your lender. It reduces your risk factor of becoming a defaulter. Let’s take an example: For a shorter loan period, you are bound to pay off the amount within a shorter period and it automatically decreases your interest rate. On the other side, if you choose longer loan tenure, there might be a high risk of defaulting and hence the interest rate will be high.
Loan Amount: Higher the loan amount, the higher will be the interest rate. If you are taking a big amount from the financial institution to purchase a bike, the lender will increase the interest rate. They do so because a big loan increases the risk factor and the interest amount helps the lender in covering any losses in the future by lending you such a high amount.
Locality of Dealer: Pricing of the bike may vary with the location. For every location, the local tax charge is different and this is the main reason for the varied price of the product. Apart from the local tax charge, another aspect that increases the bike price is the cost that the manufacturer incurs for delivering bikes at varied locations. This directly impacts the interest rate as if the loan amount gets low the ROI is also low and vice versa. The high-interest rate and high pricing increase the risk factor. So, do little research work to find out the dealer selling the same model of the bike at the best pricing
Kind of Loan: As discussed earlier, in a secured loan the borrower should pledge assets or collateral to the financial institution. As the individual is taking a loan against collateral, the risk factor for the bank or a financial institution will be less. It also reduces the rate of interest on the loan amount. But in an unsecured loan, the risk factor will be higher as compared to a secured loan. It directly impacts the rate of interest and it automatically increases.
Purchasing your favorite bike is no more a dream for you? Take the financial support from the banks and other NBFCs. Nowadays, several banking and non-banking institutions are involved in providing two-wheeler loans at attractive ROI. Money View is amongst a reliable moneylender known for offering bike loans to an individual. It is recommended to choose Money View as the company policies are very genuine and designed keeping in mind customer’s benefit. Furthermore, they charge a low-interest rate and their repayment options are also good. So, check your loan eligibility and choose a trustworthy financial institution to avail the loan.