Atwo-wheeler loan helps you borrow funds to purchase a vehicle. The loan amount varies depending on the type of two-wheeler you are buying and your monthly income. Once you have taken the loan, you will have to repay the same through Equated Monthly Instalments (EMIs).
Each instalment will be partly made up of principal and interest payments. After paying back the entire loan amount, you can apply for the removal of hypothecation on your vehicle and become an absolute owner.
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You must, however, remember some important factors while applying for a two-wheeler loan.
Loan Amount
You must assess your requirements and calculate exactly how much money you need to buy your two-wheeler. Avoid applying for an amount larger than your repayment capacity.
Check your Eligibility
Check your eligibility once you have decided on the amount you want to borrow. You must not apply for a loan amount you are not eligible for to avoid the rejection of your loan application.
Credit Score
Your credit score is important when you are buying an expensive two-wheeler. It helps you borrow 100 per cent of the cost of your two-wheeler. Some lenders can give you a 100 per cent loan amount if your monthly income and credit score match their criteria.
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Add A Co-Applicant
You can add a co-applicant if your credit score and income cannot get you the loan you want. Adding a guarantor or co-applicant will help you borrow the loan you need.
Documents
It is important to list the documents you may need to apply for the loan. You can ask the lender to keep these documents ready when applying for the loan. If you keep your documents ready, the disbursal of your loan takes place without delay, and you can get your loan approved exactly when you want it.
Apply with Existing Lender
You can consider applying for the loan with your existing lender or where you have a relationship. It helps you process your loan quickly. If you fulfil the criteria, your loan will get approved faster, and you won’t need to wait unnecessarily.
Compare Interest Rates
One of the most important things is to compare the interest rates of different lenders to know where you are getting the cheapest and lowest loan. It is also important to know the EMI you will be paying in advance to calculate accordingly to avoid defaulting or delaying your EMI repayments.
The table below compares the interest rates of more than 20 financial institutions for a two-wheeler loan of Rs 1 lakh for three years. You can compare and decide basis your requirements.
Interest Rates & EMI on Two-Wheeler Loan
Compiled by BankBazaar.com
Note: Interest rate on Two-Wheeler Vehicle Loan for all listed (in BSE) banks along with selected NBFCs considered for data compilation (except foreign and small finance banks); Entities for which data is not available on their website are not considered. Data collected from respective institution’s website as on 13 Sep 2022. Banks and NBFCs are separately listed in ascending order on the basis of interest rate i.e., bank offering lowest interest rate on two-wheeler loan is placed at top and highest at the bottom. Lowest interest rate offered by the lenders on two-wheeler loan is shown in the table, irrespective of loan amount and tenure. EMI is calculated on the basis of interest rate mentioned in the table for Rs 1 Lac Loan with a tenure of 3 years (processing and other charges are assumed to be zero for EMI calculation); Interest mentioned in the table is indicative and it may vary depending on the bank’s/NBFC’s T&C. ^Rack Interest Rate.
