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5 Reasons Why You Should Take a Bike Loan
13 Jan 2020

A bike easily snakes in and out of traffic on Indian roads, especially, during office hours. Having a bike allows you to commute freely without any inhibition. Dependence on two-wheeled vehicles, especially, bikes have prompted their sales as now more people are either using up their savings or applying for loans to buy them. 

Take A Loan For Your Bike

Bikes are available in a broad price range. You may choose from the widely available economical options or pay for a hi-end luxury vehicle. The coming up of numerous financial institutions availing bike loan has made it possible for intended buyers to afford one without dipping into their hard-earned savings. Understanding the following reasons will make it clear how taking a loan to pay for your bike helps.

  • Zero collateral: As opposed to most other loans where you have to offer a collateral to secure the loan amount, there is no hypothecation involved while taking a loan for your bike. This means that the lender will not ask you to pledge your bike as security while approving your loan application. Zero hypothecation relieves you from the hassle of submitting your hypothecation certificate to any lending institution.
  • Easy accessibility: Multiple banks and non-bank financial companies (NBFCs) avail loans to their customers so that they can buy their choice of bikes. This means that there is no dearth of choices available to you. Both online and offline availability means that you can either apply for the loan online or go to the nearest branch to submit your loan application. Most lenders allow you to apply for loans through their mobile apps too. The digital format not only allows you to scan the internet before you pick and choose your choice of the lender but also repay your loans with the click of a button.
  • Loan affordability: As opposed to the myth that lenders charge very high bike loan interest rates, bike loans are surprisingly affordable. Moreover, you can choose from numerous lenders based on the interest rates they charge. Lending institutions charge interest based on factors like bike price, bike model, employment history and regularity of income in case of self-employed borrowers. Despite getting a loan to finance your bike, you must make the minimum down payment from your end. This is because lenders finance up to 90 per cent of the bike price, thus, leaving you with a down payment to the tune of 10 per cent of the vehicle price.
  • Quick loan approval: Loan approval and subsequent disbursal are quick if you meet the lender’s eligibility criteria. As lending institutions compete with each other to increase their customer base, it makes sense to ease the loan facilitation process by promising quick approvals and seamless disbursals. Also, digitalisation of the loan process means less paperwork, thus, expediting the loan approval process.
  • High coverage available: Opting for a higher loan amount allows you to cover all related expenses. It makes sense to quote the on-road price of the bike than the showroom price as higher coverage in loans for bikes increases the affordability of the bike. Moreover, the increased loan amount can help you to pay for the bike’s accessories during the purchase or add to the bike’s seating options. Recent government regulations have made it mandatory for lenders to extend an insurance cover equivalent to the loan amount. This adds to the security factor at nominal prices.
    Sudden inflow of cash due to appraisals or bonuses at work or increased profits from businesses allow you to prepay the loan amount. Foreclosure charges are low in case of bike loans, thus, relieving you from the burden of the loan at minimal charges.
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