A 2-wheeler is a very convenient means to travel in cities and small towns. They are extremely popular and the first choice of vehicle for an Indian. Are you looking to finance your new 2-wheeler via a two wheeler loan ? Then you must take into consideration the frequently asked questions about the two wheeler loans.
How Can I Get Started?
First-time borrowers are often confused about where to start. The first obvious step is to gather information about the various creditors available in the market. You need to make a list of the creditors and financial entities that are providing 2-wheeler loans. Simultaneously, you can compare the interest rates and EMI along with the features and benefits that are provided by them.
What Is a Credit Score?
Once you apply for the two-wheeler loans, your profile will be assessed. In other words, the creditors will assess your credit score. A credit score is an expression that signifies the creditworthiness of your profile. This credit score will be a determinant for the acceptance or rejection of your loan, the interest rate for the loan amount, and the credit limit for the loan. Hence, you will need to check your credit score before applying for the loan.
What Are the Documents Required for the Loan?
The unavailability of appropriate documents can lead to rejection of the loan amount. You need to keep all the documents handy so that you can submit for the loan.
Here is a list of documents that you need to submit:
1. Pan Card
2. Aadhar Card
3. Employment proof (if employed)
4. Salary slips
5. Bank account statements
6. Business-related documents (if self-employed)
The list of documents required will vary from one entity to another.
What Are the Charges for Processing a 2-Wheeler Loan?
This is the fee that you pay directly to the creditor and is non-refundable in nature. This fee will vary depending on the creditor. You need to submit this fee at the time of the loan application. Your credit score/profile influences the processing charges and can be adjusted on request with the creditor. The processing fee can be anywhere between 2% and 3.5% of the loan amount. This variation depends largely on your location and credit profile.
Are There Any Prepayment Charges?
After the interest rate, the next concern is to identify any charges such as foreclosure, prepayments, and miscellaneous expenses. Such charges are important to know beforehand, as it gives you a clear idea of the exact loan amount that you will be eventually paying. Many creditors don’t charge a prepayment fee, while some do.
Regardless of the creditor you apply for your 2-wheeler loan with, these are a few important questions that you must know. You shouldn’t hesitate to ask or clear your doubts because it is you who will invest and obviously there shouldn’t be any room for compromise. The processing of a loan is a rather easy process if all the documents are kept in check and the pre-requisites are taken care of in a timely manner.