Two-wheelers are among the most popular vehicles for transportation in India as they are comfortable, affordable and fuel-efficient. As purchasing a new two-wheeler can be costly, many people choose to buy a used one instead. A used two-wheeler loan can help you in this scenario. Everything you need to know about used two-wheeler loans, including how to apply online, will be covered in this article.
What is a used two-wheeler loan?
A type of loan that enables people to finance the purchase of a used two-wheeler is known as a used two-wheeler loan. Any two-wheeler, including motorcycles, scooters, and mopeds, may be purchased with the help of this loan. The loan amount that will be sanctioned depends on various factors including the value of the two-wheeler and the borrower’s eligibility.
Some factors to consider before taking a second-hand two-wheeler loan
Rate of interest: The bank, the borrower’s credit score, and other variables influence the interest rates on used two-wheeler loans. One should shop around and compare the interest rates charged by different lending institutions before finalising a loan offer.
Eligibility Requirements: The borrower must be above the age of 21 years and an Indian citizen to qualify for a used two-wheeler loan. A borrower can be a salaried person or a self-employed individual.
Loan tenure: Depending on the policies of the bank and the borrower’s ability to repay the loan, the loan term for a used two-wheeler loan can stretch up to 48 months. It is crucial to pick a loan tenure that the borrower is comfortable with because a longer tenure could mean higher interest payments and a shorter loan tenure means a high monthly EMI amount.
Loan Amount: Subject to a maximum, banks offer loans up to 90% of the value of the used two-wheeler. The loan proceeds can be used by the borrowers to pay a private seller or a dealer for the used two-wheeler of their choice.
The following documents must be submitted by the borrower in order to apply for a used two-wheeler loan:
- Passport, PAN card, or Aadhaar card for identification.
- Aadhaar card, passport and utility bills can all be used as proof of address.
- Bank statements, pay slips, or income tax returns are acceptable as income proof.
- Documents for two-wheeler, including the pollution control certificate, insurance certificate, and registration certificate.
How to Apply for a Used Two-Wheeler Loan Online?
The process of applying for a used two-wheeler loan online is quick and easy. The steps are as follows:
- Click the “Apply Online” button on the Bank’s website.
- Fill out the application form with relevant details like your financial, employment, and personal information along with the documents required.
- Examine the application, then send it.
- The loan amount will be transferred to the borrower’s bank account once the application is approved.
A few things to keep in mind regarding loans for used two-wheelers
Prepayment of loans and foreclosure: It is crucial to find out if the bank permits prepayment or loan foreclosure before submitting an application for a used two-wheeler loan. Pre-payment is the option to pay parts off the loan balance before the loan term expires, whereas foreclosure is the option to pay off the entire loan balance at once. Prepayment or foreclosure penalties may be applied by some banks.
Processing costs for loans: A processing fee for the loan that banks may impose can run from a few hundred to a few thousand rupees. Usually, the fee is subtracted from the loan amount before the remaining sum is given to the borrower.
Loan repayment: To avoid defaulting on the loan, it’s critical to make on-time EMI payments. Your credit score may suffer if you fall behind on your loan repayment. It is crucial to pick a loan term and monthly payment amount that you can afford considering your financial situation and goals.
Second-hand two-wheeler loans are an excellent option for people who want to buy a used two-wheeler but cannot afford to pay for it outright. By availing a used two-wheeler loan, you can purchase a two-wheeler that meets your requirements without worrying about its financing.
Before you consider applying for a used two-wheeler loan, whether online or offline, you must conduct thorough research and carefully assess your financial situation to choose the loan amount, tenure, and repayment schedule that is most suitable for you. It is essential to read the loan terms and conditions carefully, including the bike loan interest, processing fees, pre-payment terms, and foreclosure options, to avoid any unexpected costs.
Finally, borrowers must repay the loan on time to avoid any negative impact on their credit score. With proper planning and management, a second-hand two-wheeler loan can help borrowers purchase a used two-wheeler without much hassle.