When you think of a two wheeler, it is most likely that you are thinking of scooters, bikes, and mopeds. A newly purchased two wheeler can last for more than 1 lakh kilometers and choosing a right two wheeler would give you the freedom to weave your way through the crowded roads to work, travel to a picnic spot with friends or give in to the wanderlust for a journey uphill without any worries.
There is no need to put your dream of owning a bike or scooter on hold due to lack of funds when you have companies like Muthoot Capital Services Limited by your side which provide instant two wheeler loans at lower interest rates. The reason why people hesitate to opt for a loan is their encounter with companies having complex loan disbursal process, higher interest rates & processing fee.
You can apply for a scooter or bike finance online with an essential list of documents. The loan can now be availed within a few hours. But, before you collate your documents and start applying for a loan, let’s understand various elements involved in detail.
For those who are taking a loan for the first time, you first need to understand the nomenclature or phrases that the lenders will use.
Loan Amount – It is the amount that you take as the loan -it is also referred to as the principal amount. The loan amount you are applicable for takes into account the cost of the two-wheeler and your repayment capacity. Muthoot Capital Services Limited (MCSL) offers up to 100% of the on-road price of the vehicle as loan.
Interest Rate – The interest that the borrower is expected to pay on principal amount is calculated basis a certain percentage called as interest rate. It starts as low as 0.99% per annum at MCSL
EMI or Equated Monthly Installment – It is the amount that the borrower is expected to pay the lender every month. With each installment, you are paying back a part of the principal amount and interest accrued on the loan.
Loan Tenure – It is usually the number of months within which you are supposed to repay the loan amount. You have the option of choosing the tenure ranging from 12-48 months.
Repayment Capacity – Your current income and expenses along with other loans you have are taken into account to judge your repayment capacity. It helps to calculate the EMI you can pay comfortably for the full tenure. The repayment capacity has a direct impact on your loan amount eligibility.
Processing Fees – It is a one-time, nominal charge for processing your loan application.
Though companies like MCSL provide a quick, no-hassle, easy to secure, and attractive two wheeler loan, the importance of researching and knowing what you are getting into can never be undermined.
Here are Some Things You Need to Keep in Mind To Choose The Best Offer Two Wheeler Loan Offer:
In 2019, 4.13% of people who took out two wheeler loans risked default on its payment. Creating a financial plan is important to ensure you can make the EMI payments on time. Some steps you can take when planning your repayment:
Lenders expect you to submit documents as per the rules and regulations of the RBI- NHB and their protocols. Here is a generic list of documents you need to keep ready:
Once again, the application process may vary across lenders, and follow the general pattern mentioned below:
After completing the online process, you should receive a referral ID through messaging. Save this for all future correspondence. A customer care executive gets in touch to help you complete the formalities.
It is easy to get a bike or scooter loan, as long as you meet the eligibility criteria. Researching the interest rates and repayment capacity to make an informed decision.