Chennai is a large city, and if you live here without your own vehicle, you will have major transportation issues. To make things easier for residents, numerous financial institutions have come forth with reasonable two-wheeler loans in Chennai. The post will go over some of the primary benefits of applying for motorcycle loans.
The first benefit of obtaining a motorcycle loan is a lower interest rate. Even though the interest rate varies depending on the lender, the rates are substantially cheaper than many other loan products available on the market. The primary reason is that the bike is hypothecated with the financial institution under a two-wheeler loan in Chennai till the complete principal amount plus interest component is settled. In addition, over the years, the number of lenders offering bike loans has increased significantly. Thus, financial institutions offer this loan at a competitive interest rate to keep the competition healthy and to ensure their sustenance.
However, before making any assumptions, you should be aware that other criteria such as your income, credit history, and occupation all play a role in determining interest rates.
Another advantage of applying for a two-wheeler loan in Chennai is quick approval. As previously stated, your bike is hypothecated with the lender until the loan is paid in full. Given the lender’s added security in terms of repayment, they do not have any severe loan eligibility criteria. You will also be surprised to learn that individuals who do not have a high salary and earn around Rs 15,000 per month can also qualify for this loan, providing they do not have any previous loan defaults on their record.
Here is a quick overview of motorcycle loan eligibility criteria.
- The loan can be applied by both business owners and the salaried class.
- If the applicant is of Indian citizenship, the minimum age to apply for a bike loan is 18 years.
- If you are a salaried employee, you will require six months of work experience with your present employer and a total of 12 months of working experience. Business owners, on the other hand, will need a year of experience to qualify for this loan option.
Reduce your burden
If you have a good income and believe that paying for the bike upfront would not affect your budget, you are mistaken. A bike is a significant investment. Even a basic commuter bike will set you back roughly Rs 80,000. Instead of putting a strain on your finances, it is advisable to look for a financing alternative. When you apply for a motorcycle loan, the lender divides the total amount of your debt into modest EMIs. You can repay the loan over the course of 48 months. The lender also provides you with the flexibility of choosing the repayment terms that are best suited to your budget. Here is the table explaining how EMIs make it easier on your budget.
|Parameters||One year tenure||Two years tenure||Three years tenure||Four years tenure|
|Loan amount||Rs 1,00,000||Rs 1,00,000||Rs 1,00,000||Rs 1,00,000|
|EMI||Rs 8,768||Rs 4,591||Rs 3,203||Rs 2,512|
|Interest payable||Rs 5,220||Rs 10,195||Rs 15,319||Rs 20,591|
|Total payable||Rs 1,05,220||Rs 1,10,195||Rs 1,15,319||Rs 1,20,591|
Are you surprised to learn about the tax advantages of two-wheeler loans? You might be surprised to learn that a motorcycle loan has tax advantages. However, this benefit is only available to self-employed individuals and not to salaried employees. If, as a business owner, you are using the bike for commercial purposes, the interest you pay on your loan will be treated as business expenses. You can deduct the interest component from your business profit and can reduce the overall tax burden.
Building credit history
Yes, you read that correctly. Two-wheeler loans in Chennai aid in the development of credit history. If you are unfamiliar with this, then keep reading. Motorcycle loans typically do not have severe qualification requirements. Even if you have a low income and an ordinary credit score, you will be authorised for a loan if you have stable employment. However, once approved, make sure you pay your EMIs on time. After a few months of consistent EMI payments, you will notice a significant improvement in your credit score.
Do you think that the lender determines LTV based on the showroom price? If yes, you are wrong. The two-wheeler loan covers the cost of insurance and registration as well. So, the time you are preparing your budget, never overlook this factor.
Bikes are known for making our lives easier, and so do the loan offered to purchase them. And now that you are aware of its numerous benefits, it is time to give your goal of purchasing two-wheeler wings by utilising bike finance.