Most Indians choose two-wheeler loans, even if they have cash or funds to buy vehicles directly. Therefore, two wheeler loans are one of the best products of banks and NBFCs (non-financial companies). You can buy your dream vehicle on credit and pay the dues in simple EMIs. The popularity of two-wheeler loans has forced lenders to compete with each other to attract customers.
However, today, people have many options to buy the bike or scooter of their dreams. As a result, they are bombarded with various benefits and concessions, but most of them do not know the requirements for applying for a two-wheeler loan or all the factors that must be considered in advance. Applying for a bike loan without further ado, here are some important facts that you need to check out.
Consider the following while looking for a two wheeler loan in Chennai
Many of us may actively have the idea of owning the bikes or scooters of our dream, but one of the common concerns is the high cost involved, so the best financing option to fulfil our dreams is to avail of two wheeler loans.
If you have been considering obtaining two-wheeler loans for some time, this article is for you because we will discuss 5 key points to consider before you decide to take the loan.
Your credit score
Most two-wheelers in India are inherently unsecured, one of the first and most important things a lender considers when evaluating your loan application is your credit score, which depends on four main factors:
- The total number of loans you have obtained in the past
- The total number of payments you have made in the past
- The total number of timely payments
- The total number of outstanding payments
Most lenders provide online credit to two-wheeler approval facilities. However, to take advantage of it, you need to have a reliable credit rating.
Types of loans
Globally, there are two types of loans in each category: secured and unsecured, for two-wheelers. However, you do not need to mortgage any assets or collateral to obtain an unsecured loan.
The third thing to consider when obtaining the best two-wheeler loan is the loan period. Your financial situation and the pressures associated with repayment; however, you should keep in mind that a longer term usually results in obtaining a loan at a higher interest rate.
One must check the list of documents required before applying for a two wheeler loan in Chennai.
- Photo ID
- 6 Passport photo
- PAN card, Passport, Aadhar Card, Driver’s License, Voter ID
- Employment Certificate
- For Self-employed Person
- Final Form 16, Income Certificate, Bank Statement
- For Salaried Person:
- Offer Letter or Employment Certificate
- Bank Statement, Payslips
Nature of accrued interest
In the field of credit, interest rates can be divided into two categories: The floating interest rate is an interest rate that rises or falls over time, depending on many factors, such as current market conditions, remaining credit lines, your Credit rating, and the number of payments. Few lenders offer floating interest rates on loans. A fixed interest rate means that the interest rate agreed upon by the lender and the borrower when signing the document remains unchanged throughout the loan term.