A bike loan is one of the most effective ways of generating funds for the purchase of a bike. Bike loans are loan products provided by financial institutions to customers for the purchase of a bike. With a bike loan, the process of purchasing a bike becomes simple as the customer will not be forced to use their savings in order to buy the bike. A customer can purchase any type of bike through a bike loan, they can get a new bike or a used one. A bike loan is one of the most efficient ways of purchasing a bike.
In a bike loan, the customer is provided with the loan amount to purchase the bike. The repayment on a bike loan is done through equated monthly instalments (EMIs). Repayment done through monthly instalments are smooth and easy for the customer who has availed the loan. A bike loan is provided at a certain interest rate, generally, the interest rate on a bike loan is fixed interest rate. A fixed interest rate means the customer has to pay a specific fixed amount on a monthly basis, throughout the tenure of the loan.
Types of a two wheeler loan:
1. Secured bike loans:
In a secured bike loan, the customer availing the loan will provide the financial institution with an asset as collateral. Through an asset provided to the financial institution the customer gets low interest rates on the loan. But, if the customer fails to make any of the repayments, the financial institution has the right to seize the asset provided as collateral.
2. Unsecured bike loans:
As the name suggests, the customer does not have to provide any type of collateral as asset to the financial institution. For first time buyers, a secured loan may not always be an option, thus this type is the best option for them.
4 important aspects to remember while availing a bike loan:
1. Repayments:
The loan amount provided is paid back through equated monthly instalments over a specified tenure. EMIs or monthly instalments are uniform throughout the repayment tenure of the loan. Repayment done through monthly instalments is an easy way of making the repayment on a bike loan.
2. Loan tenure:
To make the repayment of a loan affordable for the customers, the financial institutions allow the customer to make the repayment on the loan over a set tenure period. The tenure period for a loan generally ranges between one to four years. The customer can choose any tenure which will not disrupt their monthly expenditures.
3. Eligibility:
All financial institutions follow a list of eligibility criteria which they have to follow. The customer before availing the loan should ensure that they meet all these criteria’s for a smooth bike loan sanctioning process.
4. Prepayment charges:
In case of a bike loan, if the customer wishes to make any type of prepayments to the financial institution over the loan, they can make the prepayments without making any type of prepayment charges. A customer can also pay off their loan without paying any additional charges.
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