Your Money: Do you want to buy your dream bike but are unable to arrange the money? You don’t need to worry about it. You can raise funds for your dream bike and make your dream come true by taking a two-wheeler loan. There are many types of two-wheeler loan plans available in the market, so we should be careful while applying for it. Here we will tell you what five things are very important to keep in mind while applying for a two-wheeler loan.
Do research first
Loan terms and conditions differ from different financial institutions. Apart from this, there is also a difference in the interest rate, maximum loan amount and loan to value (LTV) ratio. While applying for the loan, one must be prepared to pay various fees associated with two-wheeler finance such as processing fees etc.
Along with this, also understand the hidden rules of different lenders about which people are generally not aware. These rules may affect your loan application. Through good research, you can also get information about such lenders who do not charge processing fees or charge very little.
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loan amount
Many banks offer loans up to 90% to 95% on a bike. The LTV ratio depends on factors such as the type of two wheeler and the applicant’s profile. You should compare the LTV ratio and loan amount offered by different lenders. You would absolutely not want the bike that you want to buy costs one lakh rupees but the lenders offer you a maximum of 20 thousand rupees only. Hence, opt for lenders who offer adequate loan amount as per your requirement.
It may happen that you are offered a higher loan amount than you need and tempted to buy a more expensive bike. In such a situation, you should act with a cool mind. By doing this you may have to suffer financial loss in the long term. If the monthly EMI amount is high, you may also face trouble in paying it.
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Affordable interest rate
Banks or financial institutions determine the loan eligibility and interest rate based on factors such as the applicant’s income, age, employment status and credit history. It is not necessary that you have a strong credit history to get a two-wheeler loan approval, but strong credit will help you get a two-wheeler loan at an affordable rate of interest.
The Annual Percentage Rate (APR) should also be compared with different banks or financial institutions. Because it includes the cost and expenses involved in getting a two-wheeler loan. Hence, it is advisable to choose a financial institution that offers two wheeler loan at an affordable rate of interest.
special offers
Most of the banks or financial institutions offer attractive loan offers to their customers during the festive season. Some even offer seasonal offers like Monsoon Sale. These offers can include low interest rates, zero down payment, 100% financing, zero processing fees, etc. Also, if you are already a customer, there is a good chance that you will get a loan at a lower rate of interest as compared to new customers.
Repayment options should be investigated
The repayment options of different lenders should be examined. The longer the tenure, the higher will be the interest component. By choosing a plan with Flexible Loan EMI, you will be able to repay your loan quickly and never end up paying EMIs.
Source: Tax Guru
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