Owning a new motorcycle is an exciting affair. However, if one is planning to buy their dream bike this year then they would need a motorcycle loan.
The reason is simple. Motorcycles in India have become very costly. Every motorcycle brand these days revises the prices of their line-ups. The price revisions often take place multiple times in a month! The situation has come to this. Even entry-level commuter bikes with 125 or 150 CC engines now cost more than one lakh INR!
Hence, one has to apply for a two-wheeler loan if they want to buy a bike in India this year! However, financing a bike can come with downsides especially if one makes any one or all of the following mistakes.
One must only apply for a loan when they have conducted in-depth research on the lender they have chosen. For the best results, it is best to get a motorcycle loan from a traditional lender like a private or government-owned bank. If one plans on getting a loan from an NBFC, then it is best to choose one that has been lending money for decades. One must also make sure that the overall reputation and track record of the lender is spotless. One must also ensure that the lender covers the extra mile when a borrower has met with some difficulties.
It is a mistake to apply for a bike loan without fully understanding the terms stated in the fine print in the loan document. If one is unable to understand certain terms in the loan document, one must clarify the same. For assistance, one should reach out to the loan officer who is handling their loan application.
Additional Read: 8 Things To Remember Before Buying a Bike in India
It is a huge mistake to apply for a motorcycle loan when one’s credit score is low. A low credit score will let one get a bike loan. But the lender would impose a hefty interest rate on the money one will be borrowing. Furthermore, the EMIs on the borrowed sum would be steep as well. For the best results, one must only apply for a motorcycle loan when their credit score is above 700.
One must always compare available motorcycle loan schemes from multiple lenders before applying for one. In this way, one will be able to avail of the lowest 2-wheeler loan interest rate. At the same time, one will be able to get a loan that entails the lowest EMI on the borrowed sum.
It is important that one applies for a motorcycle loan only after they have put together a debt repayment plan. A perfect debt repayment plan consists of setting a budget. The plan should also be designed in a manner that one has to prioritise EMI payments. The plan must also have steps that would allow one to make extra payments whenever they can. A debt repayment plan allows a borrower to stay on top of their lender and clear the debt in no time.
Additional Read: What Is A Zero Down Payment Bike Loan?
One has taken all the precautions like using a bike loan EMI calculator before signing the loan papers. But they made the mistake of applying for a zero down payment loan. And now, they are stuck with a bike loan that entails hefty interest rates and EMIs. A 0 downpayment loan lets one to take their bike home without paying a penny as a downpayment at the dealership. The entire ex-showroom price of the bike is paid by their preferred lender. This must sound amazing on paper. But that is not the case. A lender is a business at the end of the day. Hence, they would charge a hefty interest rate on the money they have spent on a borrower. Furthermore, the EMIs that entail a 0 down payment bike loan are most of the time steep. This adds to the financial burden of the borrower. For the best results, it is best that one avoids applying for a 0 down payment loan.
The advice shared above in this post is coming from a creative content writer. For the best results, it would be best that the reader consults a professional financial advisor.
