Having a motorcycle has become essential. This is especially true for people who travel frequently and for people who either don’t want to or can’t commute by public transportation. But not everyone wants to spend their savings on a bicycle. Instead of exploring alternatives, they abandon the concept entirely. Many people frequently ignore another choice, which is to purchase a bike on EMI. How to buy a bike on EMI is the question that comes to mind right now. Financing for a two-wheeler would need to be taken out to purchase a bike on EMI. You can quickly apply for a bike loan online, and then use the funds to purchase the bike of your desire.
What Determines Bike Loan EMI
Amount of loan
The entire value of the loan that is requested affects the interest rate as well. You will require a larger loan the more expensive your bike is. As a result, the interest rate was also raised because the financial institution was taking a bigger risk by giving you a loan for a larger sum. After all, it increased the likelihood that you would default. This makes it worth the price.
The cost of the bike loan EMI depends on the length of your loan. The interest rate would be reduced if your monthly EMI payment is big because there is less chance that you would default. Your interest rate will be substantially higher when you have a longer tenure and a low EMI rate. This is a standard rule in banking. The bike loan EMI calculator can help you determine your best course of action.
Loans: Secured vs. Unsecured
You must guarantee an asset as collateral or security to the financial institution in order to receive a secured loan. Because the institution is taking less of a chance by offering you the bike on EMI loan, the interest rate is reduced.
Unsecured loans are those for which you do not pledge security; as a result, they have higher interest rates to account for the risk involved. You must select the option that suits you the best.
When applying for a bike on EMI loan, one of the most crucial considerations is your credit score. It’s a number that credit rating organizations give you after taking into account a variety of factors, such as how many loans you’ve taken out, how much you borrowed, whether you made on-time payments or missed them, and other things. Any score over 700 is considered to be an excellent score on a scale of 900. This score will determine the interest rate for your bike loan, and if it’s high, you’ll pay less.
Advantages of Buying a Bike on EMI
The following are some benefits and advantages of purchasing a bike on EMI:
- Purchase the Bike of Your Preference: The price is one factor that prevents many individuals from purchasing bicycles. You can purchase any bike of your preference without being concerned about the price with a loan.
- Competitive Interest Rates: Keep in mind that your age, work status, earnings, and other factors at the time of application will affect the rate of interest on vehicle financing.
- Boost CIBIL Score: When you apply for a two-wheeler loan, you would be obtaining funds to pay for the car of your choice. When you repay the car loan on time, your CIBIL score rises because you become more creditworthy, which makes it simpler for you to get a loan in the upcoming future.
- Financial Relief: You will be withdrawing a substantial sum of money from your savings when you decide to buy a bike. Your financial plan may become out of balance as a result. You will feel relieved knowing that you won’t need to use any of your funds if you take out a loan to buy a bike on EMI.
- Simple Application Process: Previously, you would have to wait months to receive the money for your bike loan. You can nonetheless apply for an auto loan online because the entire process is now digital.
Documents for bike loan
Unlike other loans, you only need a few documents for bike loan. The following are the required documents for bike loan:
- KYC records: Proofs of identity and address.
- Income documentation, such as a bank statement or pay stub.
- One passport-size photo.
The following are the eligibility criteria to get a bike on EMI:
- Indian citizens must be older than 18 to apply.
- Salaried: at least 6 months in present work, with a minimum of 1 year of employment
- Self-employed individuals: should have been running for a minimum of one year.
Bikes on EMI can be purchased at numerous offline and online retailers. When you purchase a two-wheeler on an EMI, you may make manageable monthly payments without going overboard with your spending.