Navigating through the bustling streets of Indian cities can be quite a challenge. For students, especially those who have recently moved for higher studies, a dependable mode of transportation like a two-wheeler can be a boon. Not only does it save time commuting between the college and accommodation, but it also grants a certain level of independence.
But here’s the catch: as a student, where do you get the funds for your dream bike or scooter? This is where two wheeler loans come into play. Let’s delve deep into how students in India can secure these loans without breaking a sweat.
Understanding Two-Wheeler Loans
At its core, a two-wheeler loan is similar to any other loan – it’s a sum of money lent to you by a financial institution, which you then repay over a specified period with an added two-wheeler loan interest rate. For students, this offers an excellent way to procure a two-wheeler without paying the entire amount upfront.
Eligibility criteria: While the specific criteria might vary slightly from one lender to another, students generally need to be 18 years or older, have a valid driving licence, and possibly a co-applicant (like a parent or guardian) with a steady source of income.
Loan amount and tenure: Typically, two-wheeler loans cover up to 85-90% of the vehicle’s on-road price. The tenure for these loans can range from 12 to 48 months, allowing flexibility in repayment.
Factors Affecting Two-Wheeler Loan Interest Rate
While embarking on your loan journey, you’ll often hear about the two-wheeler loan interest rate. This rate can vary based on several factors, and understanding these can help you bag a better deal.
- Credit score of the co-applicant: Most students might not have a credit history. Hence, lenders look at the credit score of the co-applicant. A high score might fetch you a more favourable interest rate.
- Type of vehicle: New vehicles might attract a different interest rate compared to used ones. Likewise, the make and model can also influence the rate.
- Down payment: A higher down payment can often lead to a more attractive two-wheeler loan interest rate, as it reduces the lender’s risk.
Tips to Secure the Best Loan Deal
Securing a loan is one thing, but ensuring you get the best deal requires some savvy and a keen eye.
- Compare lenders: Don’t settle for the first lender you come across. It’s crucial to shop around, compare the two-wheeler loan interest rate from various institutions, and choose the one that’s most favourable.
- Read the fine print: Hidden charges, processing fees, or prepayment penalties can add to your loan cost. It’s always good to be aware of these before finalising a deal.
- Negotiate: Yes, even loan terms can be negotiated. If you or your co-applicant has a good relationship with a particular bank or financial institution, leverage that. It could land you a better deal.
The Repayment Process:
Once you have secured the loan, the next vital step is ensuring timely repayments. Late payments can attract penalties and affect the credit score of the co-applicant.
EMI calculators: Many online tools allow you to calculate your monthly EMI based on the loan amount, tenure, and interest rate. Using these can help you plan your finances better.
Automated payments: Setting up an auto-debit from your bank account can ensure you never miss a payment date.
Considering Additional Costs
While the allure of obtaining a two-wheeler on loan can be compelling, it’s vital to remember the associated costs beyond just the EMI. Owning a vehicle comes with its share of responsibilities and expenses. Firstly, there’s the insurance cost, which is mandatory in India. This not only protects your vehicle against damages but also covers third-party liabilities.
Then, there’s the regular maintenance. Whether it’s a minor service or replacing parts, these costs can increase over time. Additionally, consider the fuel expenses; with fluctuating petrol and diesel prices, it’s crucial to factor in these while budgeting.
For students, it might be helpful to start a separate savings fund dedicated to these additional costs. This proactive approach ensures that you’re not caught off guard by unexpected expenses, allowing you to enjoy your rides without any financial hiccups.
Also Read: Best Suspension Bikes In India for Comfort
For students in India, owning a two-wheeler can offer unparalleled convenience. With the availability of two-wheeler loans, this dream is now more accessible than ever. By understanding the nuances of the loan process and the factors affecting the interest rate, students can navigate this financial journey with confidence and ease. Remember, while a loan can get you your dream vehicle, timely repayment ensures financial credibility for your future endeavours.