With the ever-increasing traffic and the uncertainty of getting safe public transport to commute, two-wheelers have become a preferred choice for people to move within the city. Not only does it help in quicker transport by letting you navigate through the narrow lanes of the city and bypassing the traffic, but it also saves your valuable time.
Two-wheelers are easier to maintain and are also the most practical mode of transport in the current times. Therefore, if you are planning to buy a new two-wheeler for yourself or your family member, and need some financial help, consider taking a two wheeler loan. In this blog, we will discuss a few reasons why buying a two wheeler on a loan is a good idea.
4 Reasons to Buy a Two-wheeler on a Loan:
- You Can Buy a Two-wheeler with Higher Specs:
The use of two-wheelers is now just limited to city commuting. However, many like having the perfect bike to go for a long adventure ride, or weekend getaways. If you are considering a bike for both purposes, a normal city bike will not fulfill your needs. You need to have a bike that provides good riding comfort during long rides and is safer when you need to commute through unexplored territory, expressways and highways.
Also, the emergence of electric two-wheelers has come up as an economical and eco-friendly alternative to regular-petrol based two wheelers. Therefore, by taking a bike loan, you can buy a two-wheeler of your choice by borrowing the amount you need instead of waiting for several months or years to save up.
- You Can Enjoy Tax Benefits:
If you are a self-employed professional or run a business, then you can take tax benefits on a two-wheeler loan if you purchase the two-wheeler in your company’s name.
You can get tax benefits on the interest paid on a two-wheeler loan, show depreciation, fuel, servicing, and insurance expenses in your company’s book, which can be deducted from the profits. Salaried users can also declare the same while filing their investment proof for the financial year. It will help you to save a considerable amount of money.
- Lower Interest Rates:
Two-wheeler loans are the most common type of loan and are offered by almost all financial institutions. Due to higher competition among financial institutions, customers tend to benefit in the form of low two wheeler loan interest rates.
Also, some financial institutions, like SMFG India Credit offer zero down payment bike loan to eligible customers on select bike models, which makes it extremely easy and stress-free to finance a two-wheeler purchase.
If the two-wheeler loan is paid back on time as per the loan schedule, it can improve your credit score significantly and that will improve your chances of getting other loans in the future.
- Reduces Burden on Finances:
Financing your two-wheeler purchase through a loan reduces the burden on your finance as you can repay the loan in easy installments. Whereas, if you decide to pay for the bike by breaking into your savings, you have to pay a lump sum amount which will deplete your emergency fund and may cause trouble in case of an emergency. Using a two-wheeler loan can help you to hold on to your emergency funds, and repay the amount through easy EMIs spread over the loan tenure. SMFG India Credit offers flexible loan tenures for two wheeler loans between 6-36 months as per your convenience.
Using the bike EMI calculator, you can calculate the EMI amount and select a tenure so that your budget can easily accommodate the monthly EMI.
Must Read: How to Buy a Bike on EMI?
Top 5 Things to Consider Before Taking a Two-Wheeler Loan
A two-wheeler loan is not similar to a car loan and the loan features differ with every lender. The following are the things you need to consider before taking a two-wheeler loan.
- Type of Loan Offered: Most leaders offer two-wheeler loans as a secured loan type, which means your two-wheeler will be pledged as collateral. Therefore, before taking a two-wheeler loan, check the loan type- secured or unsecured that is offered to you and the terms and conditions.
- Tenure of the Loan: Most two-wheeler loans have a repayment tenure of 6 to 36 months, which you can choose as per your repayment capacity. Using the bike EMI calculator, you can arrive at the right loan tenure that will help you to pay the loan and manage personal finances in a better way.
- Rate of Interest: Before selecting a lender, check the nature of the two-wheeler loan interest rate being charged from you. Some lenders charge the interest monthly, whereas others charge the interest annually (like SMFG India Credit). Ensure that you understand how interest is being calculated on your loan before accepting the loan agreement.
- Documents Required: Provide all the necessary documents required to meet the eligibility criteria for two wheeler loan. In case, if you are unable to provide all the required documents, it may result in the rejection of the two wheeler loan application.
- Have a Repayment Plan in Place: Before taking a two-wheeler loan, ensure you have a solid plan in place to meet the repayment obligation. In case of default, it will lower your credit score, which may make it difficult to get a loan in the future.
If managed properly, buying a two-wheeler using a loan can provide you with numerous financial benefits and help you to get the bike of your dreams.