What is the Best Way to Finance a Bike or Two-Wheeler in India?
- Author :
- TATA AIG Team
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Now you can buy the two-wheelers and bikes of your dreams with an easy loan. Learn more about how to finance a two-wheeler or bike in India.
Cities are becoming increasingly congested, making two-wheelers the best mode of transportation. You can use it for short- and long-distance commuting.
However, not everyone can afford a two-wheeler with their hard-earned savings. Many banks and NBFCs offer two-wheeler loans. People interested in buying their dream two-wheeler and looking for some financial support can avail of these loans and repay them in Equated Monthly Installments or EMIs.
Read on to learn more about how to finance a bike, which finance is best for a bike loan, the documents required for a bike loan etc.
How to Finance a Bike in India?
The best way to get a motorcycle loan is to get a two-wheeler loan through banks or NBFCs. Two-wheeler bike loans are loans provided to individuals who wish to buy their dream two-wheeler.
These are secured loans available from banks and non-banking financial companies in India. Vehicles themselves are collateral security in this case.
The loan amount can be repaid in Equated Monthly Instalments (EMIs). Consequently, you do not have to spend much to apply for bike finance without a down payment.
The insurance for two-wheeler and registration charges are usually included in a bike loan. Hence, you do not have to pay separately for all this in the EMIs.
Interest rates start at 9% and go up to 26% based on a borrower's credit score. Several other factors also play a role, including the borrower-bank relationship, the borrower's income source, age, and employment status.
There is usually a four-year loan tenure for two-wheeler bike loans. Some NBFCs and banks, however, offer five-year loans. Your paying capacity will determine the loan tenure. Choose a repayment period that fits your financial responsibilities.
For existing customers, banks offer pre-approved loans for two-wheelers. The loan is instantaneous and disbursed into the bank account as soon as possible.
Moreover, major two-wheeler showrooms provide loans to their customers through partnerships with banks or financial institutions. As a result, you can acquire a bike on loan at the bike showroom itself.
Documents Required for Bike Loan
Listed below are the documents required to finance a bike.
|Type of Document||Accepted Documents|
|Photo Identity Proof||2-6 passport-size photographs|
|Proof of Employment|
Two-wheeler Bike Loans Benefits
Now you understand how to finance a bike or two-wheeler in India. A person may sometimes feel uncomfortable hearing the word "loan".
Here are a few benefits of a bike loan that may surprise you:
It is now possible to obtain two-wheeler and bike loans at low-interest rates. Prospective bike buyers find them appealing because of this.
Getting a loan enables you to purchase the model of two-wheeler or bike you choose without concern. Buying your dream vehicle doesn't require compromising.
Buying superbikes through easy bike loan options is possible if you want to be more adventurous.
Eligible borrowers can repay their loans through EMIs (Equated Monthly Instalments). Borrowers can pay these EMIs without a financial burden since they come in easily affordable amounts.
You can build a good credit score by paying your EMIs on time, enabling you to secure your next loan more quickly.
In most cases, two-wheeler loans offer flexible repayment terms. Borrowers are free to choose the duration according to their convenience.
Tips on Purchasing a Two-wheeler Bike Loan
You can finance your bike more efficiently if you follow a few effective tips below.
In India, two-wheelers can cost between a few thousand rupees and lakhs. City navigation is more accessible with gearless scooters, which are cheaper than bikes. On the other hand, the bike is more powerful and sturdy for longer-distance travel but costs more.
Tip: Set a budget before selecting a vehicle. Financing your bike begins with this step!
New or Used?
You can then determine whether you need a new bike or a used bike based on the type of vehicle you need. Based on your daily needs, you should make the decision. Decide based on your budget!
Tip: Though a new bike is more expensive, it requires less maintenance over time. Make a wise choice here!
Set a Budget
To get a loan, you must calculate your disposable income and the amount of EMI you can comfortably pay. This would help you determine the term and EMI of your loan.
Fixing a budget is always essential, even if you plan to self-finance your bike.
Tip: Consider that two-wheeler loans are usually for 4-5 years, so you must plan accordingly.
Do a Credit Score Check
Higher credit scores can lead to lower loan interest rates. Two-wheeler loans are usually short-term and secured against your bike, but credit score affects their availability and interest rates.
Tip: A good credit score will help your financial health, not just for loans but for all products. Keeping your credit score high is, therefore, essential.
Which Finance is Best for Bike Loan?
You can get a bike loan from several banks. It is important to consider interest rates, processing fees, and EMIs.
Discover your best bike financing option from the table below.
|Banks/ NBFCs||Rate of Interest (Per Annum)||Loan Tenure|
|Bajaj Auto Finance||6.2% to 13.8%||Up to 60 Months|
|HDFC Bank||14.5% onwards||12 - 48 Months|
|ICICI Bank||10.25% to 27.00%||Up to 48 Months|
|Axis Bank||10.80% to 28.30%||12 - 48 Months|
|SBI Bank||16.25% to 18.00%||Up to 36 Months|
|Tata Capital||10.75% onwards||6 Months to 60 Months|
|IDFC Bank||9.99% to 18.99%||6 Months to 48 Months|
|Muthoot Capital||0.99% onwards||Up to 48 Months|
|Hero Fincorp||10.65% onwards||Up to 48 Months|
|Bandhan Bank||16.45% to 21%||Up to 48 Months|
|Fullerton India||8% to 28%||Flexible tenure|
Two-wheeler bike loans are a safe and conventional option. Choosing the best way to get a motorcycle loan requires extensive research in this digital age. Also, these loans require minimal documentation. In addition, the bike loan is available with no down payment and easy EMI repayment plans.
Along with financing the purchase of your vehicle, it is vital to choose the right two-wheeler insurance to safeguard yourself from the financial implications arising from damage to the bike, loss of the bike, third-party damages, etc.
Choosing the right two-wheeler insurance policy is as simple as comparing online policies. Buy Tata AIG two-wheeler insurance for comprehensive protection of your two-wheeler.
Don’t worry about the cost of buying insurance. You can use our bike insurance calculator online and get a quick quote for the bike insurance of your choice.
You can buy the bike insurance policy online on our website. You can also renew your two-wheeler insurance online from their website if you already have one.
Get in touch to know more.
Reference Links https://www.paybima.com/blog/bike-insurance/what-is-the-best-way-to-finance-a-bike-or-two-wheeler-in-india/ https://www.hdfcbank.com/personal/resources/learning-centre/borrow/know-how-to-get-bike-loan-in-five-steps https://www.bajajautofinance.com/blog/best-way-to-finance-a-bike-or-scooter-in-india https://www.policybazaar.com/motor-insurance/two-wheeler-insurance/articles/what-is-the-best-way-to-finance-a-two-wheeler-in-india/ https://www.herofincorp.com/blog/the-basics-of-bike-finance https://www.financialexpress.com/auto/bike-news/should-you-finance-your-two-wheeler/2377107/ https://www.wishfin.com/two-wheeler-bike-loan/
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