Owning your dream bike is now possible with a motorcycle loan. Leading banks and non-banking financial companies (NBFCs) offer such loans at competitive interest rates. There are several loan options available and making the right choice may seem confusing.
Here are five tips to choose the most suitable motorcycle loan.
Most lenders take charge of the motorcycle you purchase using the loan. This means if you fail to pay the Equated Monthly Installment (EMI) on time, the lender may take possession of your bike. Furthermore, you will need to repay the entire amount before you are allowed to resell your bike purchased with a loan.
- Prepayment penalty
When you opt for a two-wheeler loan, the repayment tenure is pre-determined. In case you want to prepay the amount either partially or completely, you need to ensure the lender does not levy any prepayment penalty.
- Rate of interest
One of the most important factors that often influence your decision is the bike loan interest rate. It is important to check other fees and charges. You must clearly understand the additional applicable charges. This is because these fees directly affect the cost of your borrowings. The effective two-wheeler loan interest rate increases with additional charges, such as processing fees.
Lenders will not fund the entire cost of your bike. You must determine if your lender will finance other expenses, such as accessories and extended warranties. If these are not included, you will need to pay a higher amount for availing of these add-ons.
When you consider availing of a bike loan, you need to provide some basic documents to the lender. These include income, residential and identity proof. The entire procedure from the loan application to disbursement is completed quickly. However, if an institution takes a long time to approve your application, you may consider moving to another lender.
Purchasing your dream bike on EMI is quick and simple because of a large number of loan options available. Most banks and NBFCs offer different types of loans to cater to the various needs of borrowers and therefore, choosing the right loan based on your needs is important.
Click here to get more details about two-wheeler loan, eligibility criteria and required documentation.