How To Get Pre-Approval For a Bike Loan?

Nowadays, travelling from one place to another is impossible without a feasible transportation option. A two-wheeler is what helps best in this situation in terms of cost-effectiveness and usage.

People of all age groups are comfortable using a two-wheeler primarily because of its cost-effectiveness. Two-wheelers are also known to have low maintenance costs and are capable of covering long distances with low fuel consumption.

For many of us, purchasing a two-wheeler becomes a tough choice, especially when planning our expenses and analysing the aspects of getting down to make a new investment. In these cases, a two-wheeler loan could be beneficial. Your liquidity remains intact, plus you can buy your favourite bike immediately!

Let’s dive deep into it to see the dynamics of how this works.

What Are Pre-Approved Loans?

Before we understand what a two-wheeler loan entails, let’s understand the concept of a “pre-approved” loan.

Such loans are offered to existing or select customers who have previously availed of a loan from a lender and have maintained a good track record of clearing dues and repayment of previous or existing loans. Preapproved loans offer preferential interest rates which means borrowers may be charged lower interest rates when compared to those who did not have a preapproved offer. When you are offered a preapproved loan, the lender has already evaluated you as a desirable loan candidate by evaluating various parameters such as your credit history, job stability, income level, and more. The lender may also offer discounts on fees and charges and require lesser documentation from borrowers with a pre-approved loan offer. This means the processing time is comparatively shorter and the disbursal is quicker as compared to other loans.

Must Read: 5 Benefits of Two-Wheeler Loans for Women

Pre-Approved Two-Wheeler Loan Explained

A two-wheeler loan is mainly borrowed to buy a brand-new bike or scooter. The idea is to repay the amount through EMIs. The loan duration and interest rates are easily calculated depending on the borrower's repayment capacity.

The lenders make a primary investment of 80% to 100% and the borrower incurs the remaining amount. The loan is flexible and allows the borrower to buy a two-wheeler from a diversified option range.

A few reasons why a pre-approved two-wheeler loan is a smart choice is how your savings are intact and the minimum paperwork required. Also, a two-wheeler loan is an optimal solution for someone with a stable income and a sound credit score.

Factors of Pre-Approved Two-Wheeler Loan

Before you opt for a pre-approved two-wheeler loan, it is important to understand the determinants. Here are a few of them:

1. Repayment Tenure

The repayment tenure is the total time taken to clear the loan installments. Loans that have a shorter repayment tenure can quickly get loan approvals.

2. High Credit Score

Getting any loan depends entirely on how well your credit score is. Through a credit score, there is a clear picture of the financial status of an individual. It shows that you are capable enough to repay the amount in the selected tenure.

3. Income

The income level is another crucial factor before a lender gives a loan. If you are taking a loan, your income level plays a significant role in the process. 

4. Outstanding debts

Getting a pre-approved two-wheeler loan is easy but has certain conditions along with it. Another aspect of gaining access to a loan is being free of any financial burden. Hence, borrowers applying for a two-wheeler loan must clear their outstanding debts. This makes the transition easy.

Must Read: Common Bike Loan Myths You Should Ignore

Bike Loan - Everything Else You Should Know

You must know some essential information before applying for a two-wheeler loan.

1. Eligibility Criteria

The eligibility criteria for a two-wheeler loan works as below:

• One must be of 18 years while applying for the loan and the maximum age limit is 60 years.
• The loan borrower should be a resident of India and should be staying at the same address for 1 year at least.
• Having a strong CIBIL score is mandatory.
• Relevant KYC documents are necessary. 
• Having a permanent telephone number is also required.
• For salaried individuals, it is important to be a part of a public sector for 1 year minimum. For self-employed professionals, the IT returns for 1 year needs to be filed.

2. Bike Loan Interest Rates

The interest rates are the primary charges on a two-wheeler loan. A bike loan interest rate is the interest one has to pay on the principal amount for a specific timeline. The interest rate varies based solely on income criteria, eligibility, and credit score. The bike loan interest goes anywhere from 22%-28%, stretched across a tenure of 12-60 months.

3. Bike Loan EMI Calculator

There are several repayment plans that one can opt for. The Standard EMI plan and the Structured EMI plan are the most effective ones.

One can use the bike loan EMI calculator to calculate the total repayment cost. The calculator allows one to look at the interest rates and compare them with different financial institutions.

4. Required Documents

The mandatory documents needed to get a bike loan are:

• Recent Photograph
• Age Proof
• Address Proof Documents
• Identity Proof
• Employment Letter
• Statement from Official Financial Institutions
• Bank Statement for 6 months’ salary or Pay Slips for 3 months
• ITR

Conclusion

Amid the rising fuel costs, having a two-wheeler is the most cost-effective. Indians typically prefer a two-wheeler over other modes of transport.

SMFG India Credit makes it easy for anyone to avail of a two-wheeler loan. Our bike loan EMI calculator can be used to calculate the EMI. Moreover, the process of applying for a loan is also easy and hassle-free. The steps to apply are straightforward: Fill an online application, submit the documents, get verified, and get approval. Start by filling out our simple two-wheeler loan application, today!