Bikes have emerged as a definitive answer to navigating traffic in India. Two-wheelers are also easy to use and are relatively inexpensive. This has increased the demand for bikes and two-wheelers in the Indian market.
As the demand for bikes continues to grow, so has the demand for bike loans. In order to meet this demand, financial institutions have fine tuned their bike loan offerings. These days, you can apply for a bike loan from the comfort of your home with minimal documentation.
Let’s take a closer look at bike loans and why they might be a great way to finance your bike purchase.
Why Choose Bike Loans?
1. Purchase your dream bike
Purchasing your bike in cash can be a little challenging as you’d have to make the entire payment at one go. This can deplete your savings and can cause some financial stress.Apart from depleting your savings, paying for your bike out of pocket can also mean that you’d need to make some compromises. This can mean that you’d have to choose a more inexpensive variant or a different bike altogether. This may not be such a good idea, particularly if you plan on using your bike for the foreseeable future. A bike loan can help you purchase your preferred bike without any hassles.
A bike loan allows you to purchase the bike of your choice without having to make any compromises. With a bike loan, you just need to make a down payment of anywhere between 0% to 30% of your bike’s value and you’re good to go. Post this, all you have to do is make monthly payments towards your bike loan.
2. Helps plan finances better
Taking a bike loan ensures that your EMIs are spread evenly throughout the loan repayment tenure. Paying for the bike in one go can throw off your finances and can cause a lot of liquidity crunch. Instead, you can take advantage of a bike loan and allocate your funds towards building an emergency fund or investing.Additionally, you can analyse your finances before taking a bike loan to understand your repayment capability. It’s impossible to take a one-size-fits-all approach to personal finance. This is why you should always take into account your unique life and financial circumstances to arrive at a repayment plan that works for you.
You can use a two wheeler EMI calculator to understand how loan amount, interest rates and loan repayment tenure affect your monthly payments. You can tweak the repayment tenure and the loan amount a little bit to help you arrive at an ideal EMI amount.
3. Rewards and offers
Nowadays, the loan industry has become quite competitive. This means that lenders are eager to give loans to credible borrowers. This has translated into lower interest rates, rewards, free insurance offers, additional discounts, full-financing with zero down payment, etc.If you have a regular source of income and have a good credit score, you may be eligible for one or many of these offers. Taking advantage of these offers can help you make the most of your bike loan and lower costs.
4. Helps improve your credit score
If you are new to credit, one of the simplest ways to improve your credit score is to take a small ticket loan. Apart from being a small ticket loan that’s accessible, a bike loan is also a secured loan. This means that the interest rate on a bike loan is much lower than the interest rates offered on other small ticket unsecured loans.A combination of accessibility and affordability makes bike loans a great way to enhance your credit score. If you’re planning to take a bike loan to improve your credit score, here are some things to keep in mind:
- Avoid applying for multiple bike loans in a short period of time. This will signal to credit bureaus that you are desperate for credit and they may flag you as a risky borrower. This can lower your credit score.
- Always make sure to pay your dues in full, on time. Defaulting on payments can negatively affect your credit score.
5. Easy application process
These days, applying for a bike loan is very simple and takes only a matter of minutes. You only need a few basic documents and information to get started. You can get started online through your preferred partner’s online portal.6. Low interest rates
Being a small ticket secured loan, bike loans bear some of the lowest interest rates available in the market. You can take advantage of these low interest rates to fund your bike purchase. Bike loan interest rates can range anywhere from 6.85% to 28.30% per annum.By shopping around a little bit and/or negotiating with your lending partner, you can get very low interest rates that can make your bike purchases quite affordable.
7. Tax benefits
If you’re a self-employed person and intend on using your bike for business purposes, then you can get tax benefits on your bike loan. The interest paid towards this bike loan will be considered a tax-deductible. Apart from this, you can also deduct the amount paid towards the maintenance of the vehicle from your profits while filing for taxes.
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