All You Need To Know About Two Wheeler Loan and How to Apply Online

Selecting the two-wheeler and type of loan:

After selecting the two-wheeler, the buyer will have to choose the type of loan they avail.

These include:

  • Direct Financing Options from the dealership:
  • Nowadays, dealerships of two-wheeler manufacturers also offer these loans with the help of a financial services partner.
  • However, these may carry some extra terms and conditions regarding proper servicing (through officially authorized service centers) in their clause.
  • Banks/Financial Service Providers:
  • Most lenders offer monthly EMI-based payment options for two-wheeler loans.
  • The tenure for these EMIs can generally range from 2 to 5 years.
  • Most lenders also offer 100% financing with zero down-payment schemes.
  • Some of these loans are also available for superbikes.

Checking the Eligibility:

  • The age of the borrower should be above 18 years old. However, some loan providers may even require the applicant to be 21 years old or above.
  • Applicants would need to provide identity proof, address proof, and proof of income (in certain cases).
  • Some loans may even have a minimum earning per month in their criteria.
  • The applicant should have a salaried occupation or have a stable self-employed occupation.
  • These criteria will vary for non-individual buyers (like delivery companies).

Interest Rate of the loan:

  • Most interest rates will reduce for the borrower with:
  • Verified repayment capability, i.e. financial stability to pay the loan.
  • CIBIL Credit Score.
  • Current debts and other EMIs (if any).
  • Area of Occupation (Private, Government, or Self-employed.)

 Amount of the loan:

  • The amount of loan which will be approved needs to be  confirmed before committing to purchase the two-wheeler:
  • The lender may not cover the cost of accessories and optional packages for the two-wheeler in their loan amount.
  • However, most lenders will cover the entire On-road price or a percentage of it.

The On-Road Price consists of the Off-Road Price in addition to the insurance and registration/RTO tax cost.

How To Apply For Two-wheeler Loans:

  • Choosing the Loan from a suitable lender:
  • The selection of the lender will determine the rate of interest, the minimum and maximum amount of loan, the maximum tenure of loan, as well as the processing fee.
  • Often this will also depend on the brand of your two-wheeler which might have partnered with the lender to provide the best interest rates.
  • Checking the loan eligibility:

Nowadays, this can be done on the lender’s online platform by answering a few questionnaires and filling up a few details.

  • Calculation of the loan:

Most online application platforms for two-wheeler loans will have a loan calculation tool.

  • Two-Wheeler Loan Application:

While applying for the loan, the borrower needs to give certain information like personal details, financial status vehicle details, RTO details, dealership name, etc.

  • Submit and Verify Documents:
  • The borrower/buyer will also need to verify their documents before approval of the loan.
  • These documents include:

– Identity Proof (Aadhaar, PAN, Voter, Driver’s License, Passport)

– Address Proof (Aadhaar, Utility Bill, Voter Card, etc.)

– Income Proof (3 months Bank statement, Tax Returns, etc.)

Frequently Asked Questions:

  • Reselling a two-wheeler under a loan.

The loan needs to be repaid and then the two-wheeler is permitted to be sold after having no dues.

  • Time required for approval.

The loan usually gets approved if all the eligibility is met. The usual time taken for approval is within an hour.

  • What Credit Score is required for approval?

A score of about 750 is good enough for easy approval. The Credit Score will depend on the income status as well as ongoing and past loans’ status.

  • Maximum and Minimum Loan Amount.

The usual range for the minimum and maximum loan amount for two-wheelers is Rs. 10000 to Rs. 2,50,000.

  • How to update new RTO details if the location is changed?

Nowadays, most Banks and lenders offer online updates of certain submitted documents.

  • Two-Wheeler availability lists for loans.

The list of two-wheelers listed for availing loans may differ from lender to lender. However, most mass-market two-wheelers available in the country are available for loan approval.

  • Will non-individual borrowers follow the same process?

The aforementioned Two-wheelers Loan Application process is only for individual borrowers. A special representative from the lender may handle such non-individual clients.