Buying a two-wheeler like a bike or scooter is often a big financial decision for middle-class families in India. However, thanks to the recent cuts in repo rates to 6% by the Reserve Bank of India (RBI), 2 wheeler loans are now much more affordable. This means the rate at which the RBI lends money to other banks has reduced, enabling the banks to transfer this benefit to customers. With reduced interest rates, you can now easily finance the bike or scooter of your dreams. To do this, it is advisable to leverage the power of a bike EMI calculator. Let’s take a better look at two wheeler loans and how using an EMI calculator can be helpful.
What Is a 2 Wheeler Loan?
It is a type of loan offered by banks to help you buy a two wheeler if you fall short of savings. Besides, there is another common use-case for these loans. Instead of waiting to save up and purchase a two-wheeler, a two-wheeler loan enables you to start riding a bike
or scooter almost immediately. Some banks and non-banking financial companies (NBFCs) offer loans of up to 100% of the on-road price of a two-wheeler.
However, the rate of interest on a 2 wheeler loan depends on your credit score and overall credit history. If you have a good credit score, lending institutions (such as banks and NBFCs) may offer you interest rates as low as 9%. Contrarily, if your credit score is low, you may get loans with interest rates of 15% and upwards.
Benefits of Taking a 2 Wheeler Loan
If you choose to apply for a two wheeler loan, then there are many benefits that you can avail of. In most cases, the benefits are dependent on the policies of the specific financier. (i.e., the bank or NBFC from which you have taken the loan)
However, some general benefits include:
- No Upfront Payment: Buying a two wheeler using a 2 wheeler loan means you do not need to make any upfront payment. This is true if your loan finances 100% of the on-road price of the bike or scooter.
- Quick and Easy Approval: Most two-wheeler loans nowadays are disbursed digitally. This means you can apply for them online, and there is minimal paperwork involved. Some lenders even conduct the KYC process digitally.
- Flexible Payment Plan: The best part about these loans is that you can use a bike EMI calculator to estimate the monthly amount you would have to pay towards loan repayment. On these calculators, you can customise the loan tenure, interest rate, and loan amount to get the most affordable EMI amount.
- Improve Credit Score: When you take a 2 wheeler loan, your credit score is temporarily reduced due to the hard inquiry by the lending institution. However, if you practice financial discipline and pay each instalment on time, this can greatly improve your credit score in the long run.
What You Need to Apply
To apply for a 2 wheeler loan, you need to be at least 18 years old and have a regular income. Most lenders ask for the following documents:
- Identity proof (like Aadhaar, PAN card)
- Permanent address proof
- Income proof (salary slips, bank statements, or both)
- A recent passport-size photograph
- Quotation or invoice of the bike you wish to purchase
Once your documents are verified, the loan can be approved within a few hours or days, depending on which bank or NBFC you choose.
Tips to Get the Best Two-Wheeler Loan
- Check your credit score: A good score means better chances of approval and lower interest rates.
- Choose a shorter tenure: This reduces the total interest you pay, though the EMI may be a bit higher.
- Compare different lenders: Don’t settle for the first offer. Use a bike EMI calculator to compare and pick the best option.
- Go for a partial down payment: Paying a small amount upfront lowers the EMI and total interest.
- Read the terms carefully: Check for hidden charges, prepayment penalties, and insurance requirements.
Key Takeaway
Getting a 2 wheeler loan is one of the easiest and fastest ways to buy your dream bike or scooter. With flexible repayment options and quick approvals, it fits well into most budgets. But before you make a decision, use a bike EMI calculator to know exactly how much you’ll pay each month. This simple step can help you avoid financial pressure and enjoy your ride stress-free.
The post Everything to Know About Two-Wheeler Loans appeared first on MoneyMiniBlog.
