Riding a bike symbolises control, puts your mind at ease, and gets you out of traffic jams. No wonder why, this mode of transportation has become exceedingly popular for intra-city movement and long-distance thrill rides.
What’s more, with easy availability of bike loans at affordable interest rates, several enthusiasts are able to afford their dream motorcycle without hurting their budget. If you’re looking for the same, you must know about the two-wheeler loan processing fee and other charges as you begin your loan application.
Let us discuss the important loan charges to help you buy the bike you desire.
Bike loan processing fee
When you apply for two-wheeler finance, a lender may require you to pay an additional fee to process your loan. This is a one-time processing fee, which is non-refundable. A potential borrower must pay this charge at the time of filing their application for the two-wheeler loan. Let us look at some components that make up the processing fees.
Administrative fee
This is to cover the administrative expenses that are incurred while processing and sanctioning your loan. Some lenders may even charge this as a separate charge.
Post-disbursement documentation charge
This fee is to cover the charges related to the post-disbursement documents like the disbursement letter, disbursement agreement, collateral documents, etc.
Other charges for bike finance
Apart from the processing fee, bike finance entails miscellaneous charges such as:
Bounce charges-
If a cheque bounces due to technical reasons or insufficient funds in your account, the lender can charge you a penalty.
Cancellation charges
When you request to cancel the loan for some reason after the loan approval or disbursal, the lender may charge you for the cancellation.
Stamp Duty charges
This is to cover the stamp duty expenses that are incurred during the two-wheeler loan registration.
Foreclosure Charges
When you wish to repay the loan before the loan tenure is over, your lender might ask for a foreclosure charge.
Repossession Charges
If the lender takes the vehicle through repossession, they might penalise you. This will occur if you fail to make the loan repayments.
These charges could be a percentage of the loan amount or a standard amount, depending on the lender. GST is applicable on some of these charges too.
Other aspects of a bike loan to consider
Loan charges need to be considered carefully before choosing a bike loan. There are also other elements to factor in while selecting a bike loan that best fits your requirements:
Loan amount
Most financial institutions cover 100% of your bike’s value. Based on your capacity to put forward a down payment, you can even opt for a zero-down payment loan.
Two-wheeler loan interest rate
Some lenders can offer you a lower rate than the market’s rate if you have a good credit history.
Tenure
Your tenure can also influence your interest rate. A longer tenure means a lower two-wheeler loan interest rate but it could also mean paying more in total over the entire tenure.
Flexible EMI payment
Most lenders offer some flexibility in EMI payment. Check with your lender if you can choose a flexible EMI scheme that suits your financial situation better.
Eligibility criteria for a bike loan
Before applying for bike finance, check your two-wheeler loan eligibility criteria online.
To be eligible for a motorcycle loan, you must maintain a decent CIBIL score (preferably 750 and above) and have a stable job for at least one year. Self-employed individuals can apply for a loan too by providing proof of stable employment for at least a year.
The minimum age of the loan applicant should be at least 21 years, and the maximum age limit is usually between 60 to 65 years, depending upon the lender. Also, it is preferable if you prove residence in the same home for at least one year to show a stable residential status.
Additional Read: How to get a Two Wheeler Loan? 4 Tips to Follow
Documents required for bike finance
After meeting the primary criteria to avail a two-wheeler loan, you need to submit a list of documents to the lender. Your loan will be processed based on the verification and approval of the following documents-
- Identification proof- Aadhar Card/Driver’s License/Pan Card/Passport/Voter’s ID
- Address Proof- Passport/Electricity Bill/Ration Card
- Last 3 months bank statements (mandatory)
- Income Proof (if required)
Based on your profile and documents’ approval, you can successfully avail of bike finance at attractive bike loan interest rates.
Additional Read: Things to Know While Comparing Two-Wheeler Loans
To sum up
All set to add a brand-new bike to your garage? Apply for a motorcycle loan at Tata Capital at competitive two-wheeler loan interest rates.
Not sure about the kind of EMI you will pay if you take a loan from us? Don’t fret! Simply log on to our website to use our bike loan EMI calculator to accurately evaluate your monthly instalments. So, make a smart financial move by applying for a two-wheeler loan with us today!
03 September 2024
5 mins read
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