Two-wheelers are the most preferred mode of transportation in India. More than 17 million two-wheelers were sold in FY2019-20. However, it may not be possible for a large proportion of buyers to pay a lumpsum amount and purchase their dream two-wheeler. Therefore, it’s best to buy one by applying for a two-wheeler loan. It is not only convenient but also the best option in case you don’t have enough funds to pay the full amount in cash.
Important features of two-wheeler loan
There are a plethora of benefits that a two-wheeler loan provides. Some of the benefits are-:
- Quick and Hassle-free Process – One of the biggest advantages of a two-wheeler loan is that it’s very quick. Unlike other loans, the process of getting a two-wheeler loan is not at all cumbersome and can be easily sanctioned in a few days. The process is also convenient as you can pay some little amount easily every month. Trusted companies like Muthoot Capital Services promise to approve and disburse the loan amount in just few hours.
- Surprisingly low interest rates- In the last couple of years, there has been a tremendous increase in the two-wheeler loan leading to a remarkable reduction in the interest rates. Two wheeler loan interest rate usually vary from company to company and sometimes customer to customer basis his credit score.
- Helps bump up the Credit Score- Getting a two-wheeler loan is one of the best ways to improve your credit score. Since the cost of buying a two-wheeler is less, it’s also easier to pay back the loan amount, which in turn increases the credit score. Therefore, for young professionals, it’s a great opportunity to boost up their credit scores at an early age.
Facts To Know Before Applying For Two Wheeler Loans (about 80 words per fact)
- Borrow only the amount you require-
Do make sure that you don’t over-borrow in any case. It may lead to a condition where you may not be able to pay back the loan and default. Moreover, it can also worsen your credit score. Therefore, you should borrow according to your requirements.
- Research for the best available interest rates- Don’t be in a hurry to get a two-wheeler loan just because you get it conveniently and at a low -interest rate. Interest rates vary from lender to lender; therefore, you must research properly and talk to different lenders before taking the loan. You should also take advantage of the vast pool of information available online to get better information about two-wheeler loans. Check out the low interest rates offered by Muthoot Capital Services Limited – One of India’s fastest growing financial companies, the part of Muthoot Pappachan Group.
- Make frequent pre-payments or extra payments whenever possible- Most of the lenders give the option of making advance EMI payments. Early payment has its own advantages, and it gives you the benefit of saving on the interest rates, reducing the principal amount, financial stability and will also boost your credit scores. Also, if possible, you should make a high amount of down payment so that both your repayment amount and tenure are less.
- Watch out for additional fees- Apart from the interest rates, there are also many additional fees involved like processing fees and different charges like valuation charges, documentation charges, administration charges, etc. Therefore, before availing the loan, you must research carefully about the additional charges and prepare yourself accordingly.
- Plan your monthly EMIs- Your EMI is mainly determined by factors like the loan amount, its tenure and the interest rate. Therefore, planning your EMI is very important so that you don’t get derailed from your budget. If you can’t change the loan amount, then you should increase the tenure of your loan so that you can pay your EMI comfortably. Also, you must keep track of your other expenses too. Usually, it is advisable to go for a plan that includes flexible EMIs with an option of grace periods so that you never miss an EMI.
- Festive Season influences two-wheeler loans- The Festive season has a significant impact on two wheeler loans. During the festive season, there is an exponential rise in the sale of two-wheelers. The increased demand ultimately reduces interest rates. Moreover, sometimes festive seasons may also lead to cuts in the loan-processing fee and other additional fees involved. Therefore, festive seasons are a great time to take the two-wheeler loan.
A two-wheeler loan is secured and one of the affordable loans available. After reading this, you must be convinced about the different benefits of the loan. By taking some precautions, you can make an informed decision about taking a two-wheeler loan.