2-wheeler loan – Necessary factors

A two-wheeler can be a source of freedom, mobility, and convenience. It can be especially useful when navigating through traffic and escaping congested areas. If you're planning to buy a two-wheeler, a two-wheeler loan can be a great financing option. Before you sign up for a two-wheeler loan, there are several factors to consider. In this article, we'll look at some of the essential factors you should keep in mind before taking a two-wheeler loan.

1. Loan Amount

The first factor to consider is the loan amount you need to finance your two-wheeler. Determine the cost of the two-wheeler and the down payment that you are willing to make. The down payment should ideally be 20-30% of the total cost of the vehicle. The remaining amount can be financed through a two-wheeler loan.

It's essential to calculate the loan amount as it determines the EMI, interest rate, and loan tenure. You can use online calculators or consult with a loan officer to determine the loan amount you need.

2. Interest Rate

The interest rate is the cost of borrowing money and is a significant factor in determining the affordability of a two-wheeler loan. The interest rate for a two-wheeler loan depends on several factors, such as the borrower's credit score, repayment history, loan amount, and loan tenure.

Before choosing a lender, compare the interest rates of various banks and financial institutions. Some banks offer lower interest rates for women borrowers. You can also negotiate with the lender to get a better interest rate.

3. Loan Tenure

The loan tenure is the duration of the loan repayment. It's essential to choose the loan tenure that suits your financial situation. A longer loan tenure reduces the EMI but increases the total interest paid over the loan's duration. A shorter loan tenure increases the EMI but reduces the total interest paid over the loan's duration.

Consider your current income, expenses, and future financial goals before choosing the loan tenure. It's a good idea to opt for a shorter loan tenure if you can afford a higher EMI.

4. Debt-to-Income Ratio

Debt-to-Income (DTI) ratio is the ratio of your monthly debt payments to your gross monthly income. It's a crucial factor that lenders consider before approving a two-wheeler loan. A higher DTI ratio indicates that you are more likely to default on your loan payments.

Before applying for a two-wheeler loan, calculate your DTI ratio to ensure that you are eligible for the loan. Try to keep your DTI ratio below 40%.

5. Loan Processing Fees

Most lenders charge processing fees for two-wheeler loans. The fees can range from 0.50% to 3% of the loan amount. Compare the processing fees of various lenders to choose the one that offers the lowest fees. Also, check if there are any prepayment charges if you plan to repay the loan.

6. Down Payment

The down payment is the amount you pay upfront for the two-wheeler. Lenders prefer borrowers who can make a higher down payment as it indicates the borrower's commitment to the loan. A higher down payment also reduces the loan amount, interest, and EMI.

Consider the down payment you are willing to make while budgeting for the two-wheeler. Try to make a higher down payment to reduce the loan burden.

7. Credit Score

Your credit score is a crucial factor that determines your eligibility for a two-wheeler loan. A higher credit score indicates that you are a responsible borrower who can make timely payments. A lower credit score indicates a higher risk of default.

Before applying for a two-wheeler loan, check your credit score and credit history. If your credit score is low, take steps to improve it before applying for a loan.

Top recommended apps for two-wheeler loans

1. Bajaj Finserv App 

The Bajaj Finserv app is a popular app for two-wheeler loans. The app offers instant approval for two-wheeler loans, making it convenient for users to apply for a loan on the go. Additionally, the app provides pre-approved offers, which can be availed with a few clicks. 

The app also has an EMI calculator that allows users to calculate their EMI based on the loan amount and tenure. The app provides detailed information on loan offerings, including interest rates, fees and charges, and repayment options. 

The Bajaj Finserv app also allows users to track their loan application status and provides information on loan disbursement and repayment. Overall, the Bajaj Finserv app is a must-have for anyone looking for a hassle-free two-wheeler loan experience. 

2. BankBazaar App

The BankBazaar app is a popular app for comparing and applying for two-wheeler loans. The app offers a wide range of loan options from various banks and financial institutions, making it easy for users to compare and choose the best loan offer. Additionally, the app allows users to calculate their EMI, based on the loan amount, tenure, and interest rate. The app provides detailed information on loan offerings, including interest rates, fees and charges, and repayment options. 

Users can also apply for loans through the app and track their loan application status. The BankBazaar app is a great tool for anyone who wants to compare loan offerings from various lenders and make an informed decision. 

3. MyLoanCare App 

The MyLoanCare app is a popular app for two-wheeler loans, providing users with access to loan offers from various banks and financial institutions. The app allows users to compare interest rates from different lenders and calculate their EMIs. 

The app also provides users with personalized loan offers based on their credit scores and other financial parameters. Users can apply for loans through the app and track their loan application status. MyLoanCare app is an excellent option for anyone who wants to find the best two-wheeler loan offers and apply for loans on the go. 

4. Paisabazaar App 

Paisabazaar is another popular app for two-wheeler loans, providing users with access to loan offers from various banks and financial institutions. The app allows users to compare interest rates from different lenders and calculate their EMIs. 

The app also provides personalized loan offers based on users' credit scores and other financial parameters. Users can apply for loans through the app and track their loan application status. The Paisabazaar app is a great tool for anyone who wants to compare loan offerings from various lenders and make an informed decision.

Conclusion

A two-wheeler loan can be a convenient financing option for purchasing your dream vehicle. However, it's essential to consider several factors such as loan amount, interest rate, loan tenure, debt-to-income ratio, loan processing fees, down payment, and credit score before signing up for it. Compare various lenders before choosing the one that offers the best terms and conditions. You can also consider using the Bajaj Finserv app to simplify the loan application and approval process. The app offers features such as instant approval, pre-approved offers, and easy EMI calculation.