Here are the top 6 advantages of two wheeler loan that make your life easy
Two-wheelers have significantly made our lives easy and convenient. Besides being a popular travel pick, they give high mileage and cause fewer emissions compared to big vehicles. Nonetheless, buying them for everyday movement for groceries, office, colleges, etc., is a worthy investment. However, saving money from your monthly expenses to buy a two-wheeler might cause financial trouble. A two-wheeler loan might come to your rescue in such a scenario.
A two-wheeler loan gives you the exact loan amount you need to buy a bike. A two-wheeler has a lot of importance in our day-to-day life, and something that has high significance in our lives is worth every financial risk. However, with advanced features and services provided by banks and NBFCs, getting a two-wheeler loan is even more convenient than a personal loan.
In this article, you will learn about two-wheeler loans, their comparison to a personal loan, and six of their advantages.
What is a two wheeler loan, and what is its significance?
A two-wheeler loan is financial aid from a lending institution, whether a bank or NFBC, to purchase a two-wheeler. These lending institutions charge you a specific rate of interest based on your credentials and loan-repaying capacity. You can opt for monthly instalment options to repay your loan amount. You must ensure you pay your EMIs on time throughout the loan tenure.
Two-wheeler loans can only be obtained for purchasing a bike. You can’t apply for it to cover other needs. During festival seasons, banks offer heavy discounts on interest rates and elevate the loan amount for the customer’s attention. This is the reason why loans for two-wheelers were popularly applied for. In India, people opt for two-wheeler loans instead of personal loans to purchase a bike.
Now that you know about two-wheeler loans and the purpose they solve, let us find out some advantages of them.
What are the six advantages of applying for a two wheeler loan to purchase a bike?
There are more than six benefits of going for a two wheeler loan over a personal loan to purchase a bike. They are:
- Compelling rate of interest:
Banks and NBFCs charge a lower interest rate to borrowers for purchasing a bike. This helps you lower your equated monthly instalment amount to a great extent. In addition, it allows you to make fewer compromises on your financial aspect and, as a result, puts less stress on your budget. In India, most financing institutions charge an interest rate that starts from 7% per annum.
However, some lending institutions even charge much less than this, often that starts from 1 per cent per annum. If this rate is compared to a personal loan, a two-wheeler loan is a preferable option.
- High-Value Financing:
While opting for a two-wheeler loan, you can get as much as the total amount you require to purchase a bike. Unlike other types of loans like personal loans, you can get 100% as the loan amount for financing your two-wheeler. Most financing institutions spend at least 90% of the money you need to purchase a bike.
- Flexible tenure:
The tenure of the loan plays a huge role in deciding whether or not the loan is preferable. A flexible tenure allows you to have ample options and choose the one that suits you the best. So, in the case of a two-wheeler loan, the tenure of repayment ranges between 12 months to 48 months. So, a flexible tenure helps you to decide and plan your finances wisely.
- Easy EMI options:
Equated monthly instalments also play a decent part when applying for a two-wheeler loan. The easier the EMI options, the easier the repayment capabilities. Most lending institutions provide diverse options when opting for a loan for a two-wheeler. This helps you choose the best for you and manage your budget.
- Easy and Quick approval:
In a two-wheeler loan, there is involvement of lesser paperwork with minimal documentation. This helps you prevent unnecessary delays and get your amount reimbursed way sooner. However, in some cases, it might take 3 to 5 days to get your loan amount disbursed. Compared to a personal loan, the disbursement period is comparatively lower than the mentioned period.
- Boosts credit score:
Credit scores are a fundamental requirement for bigger loans like personal and home loans. So, a two-wheeler loan helps you build a good credit score. If you opt for a loan for a bike and repay it with smaller EMIs throughout a more extended period, your credit score will increase simultaneously.
In Conclusion
Though two-wheelers are one of the most popularly chosen vehicles in recent times, buying them with personal finance might be tough. A two-wheeler or personal loan might help you get through the buying procedure. A two-wheeler loan has many benefits like easy approval, flexible tenure, lesser EMIs, etc. While choosing a loan, you must focus on the parameters like interest rates, EMI and tenure. Increasing your tenure might decrease your EMI but increase your overall interest payment. Decreasing your tenure might lower your net interest payment but increase your EMI and cause financial distress. If you want to know more about two-wheeler loans, home loans, personal loans, etc. You can prefer to visit Piramal Finance.