Despite all the modes of commuting, a two-wheeler is still one of the most convenient modes of personal transport available. It is better in terms of affordability and fuel efficiency. It can be maneuvered among traffic, the maintenance costs are low, and parking space requirements are meager. Whether going to the office or starting a new small-scale business, a two-wheeler could help you further your dreams. If you plan to buy a two-wheeler, a two-wheeler loan could help you do it without putting a burden on your pocket.
What is a down payment?
In most cases, if you decide to take a loan, you need to pay some part of the value upfront. For example, if you want to buy a two-wheeler worth Rs. 1 lakh, the financial institution will pay Rs. 85,000 while you have to pay Rs. 15,000 upfront. The amount that you pay out of your pocket is called a down payment. It is the down payment that actually puts the financial burden on you.
The best deal is if you do not have to pay anything upfront. This is called a zero-down payment two-wheeler loan. If you meet the eligibility criteria, the lender will pay the total value of the two-wheeler without you having to pay anything upfront. You will still have to bear the loan processing fees, which is a small percentage of the loan amount you want to borrow.
Eligibility Criteria
The eligibility criteria vary from lender to lender, but there are some common elements in all of them.
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- Age: 21-65 years
- Employment: Working for at least a year
- Income: Varies between salaried and self-employed. A typical range of annual income is from ₹72,000-84,000.
- Residential status: You must stay at the given address for a minimum of one year. If there is an address change, relevant documents will have to be provided.
- Credit History: This is one of the essential requirements in getting a loan. Varying lenders have different requirements of credit score. Higher the credit score, cheaper the finance.
Importance of credit history
The lender of your choice will check your financial history before giving you the two-wheeler loan. Having a good credit score is just the beginning. Maintaining it is going to be the most important thing. Once you take a two-wheeler loan, or any other loan, paying it back responsibly within the right time will reflect positively on your credit history. Your good credit history will reduce the interest rates, making your EMIs affordable.
Documentation
Just like any other loan, your lender will require you to provide some primary documents.
- Identity Proof
- Income Proof
- Bank Statement
- Residence Proof
Closing Comments
In these times, a two-wheeler could very well be your ticket to having your own vehicle. And what better time to make this happen than Diwali, the festival of lights. Automobile manufacturers offer a bevy of offers on various two-wheelers, and you have the chance of getting a great deal during this festive period. A lot of new two-wheelers are launched during this period. Hence, you might get the choice of a great new bike model as well.
There will also be some income tax benefits of taking a two-wheeler loan that you can choose to avail. Do not forget to choose a lender who is reputed and trustworthy. Make sure that you get the best two-wheeler loan interest rates possible. You can understand the impact of loan repayment using an online two-wheeler loan EMI calculator.