Purchasing your dream bike is not difficult with easy access to funds. All you have to do is open your laptop, navigate to your preferred lender’s website, and complete the application form. However, the easier it appears to obtain a two-wheeler loan in Bhubaneswar, the more borrowers make a mistake. The following article will inform you of the mistakes to avoid when applying for a bike loan.
1. Choosing a bike before knowing the approved amount
This statement may surprise you, but it is correct. The two-wheeler market has a diverse selection of bikes. There are numerous options available in various categories, such as commuter bikes, sports bikes, superbikes, and the recently launched e-bikes. However, the prices of different categories of bikes vary greatly. Commuter bikes are thought to be the most cost-effective, whereas superbikes are thought to be the most expensive. If you choose a superbike worth Rs 5 lakhs and require funds of around Rs 3 lakhs, but the lender of a two-wheeler loan in Bhubaneswar informs you that you qualify only for Rs 1,00,000, won’t you be disappointed?
Therefore, to avoid the above situation, it is recommended that you thoroughly review the eligibility requirements and request the loan amount you qualify for from your lender.
2. Lack of research
Don’t run after the new launch; it will stay in the market for a long time. Many people in a hurry to buy a new arrival make the mistake of not spending enough time researching a lender for a two-wheeler loan in Bhubaneswar. As a result, they end up obtaining funds at a high cost. Remember that the rates charged by different lenders on a bike loan differ greatly from each other. Furthermore, the parameters used to determine the interest rate may differ. For example, some lenders prioritise credit history, while others prioritise income and employment stability.
Apart from that, you should investigate what is covered under your two-wheeler loan. When calculating the loan-to-value ratio, some lenders include the cost of accessories. Also, remember that if you can find a lender offering a zero down payment two-wheeler loan, you are wrong.
3. Over borrowing
Overborrowing is another critical factor to consider when applying for a two-wheeler loan in Bhubaneswar. Assume you are looking for an inexpensive bike to ride from home to work and from work to home. You made the decision to purchase Splendor Plus. However, when you visit your preferred lender, they inform you that you qualify for a larger loan amount and persuade you to apply for the entire amount you qualify for. Given the loan amount, you upgrade to a sports bike. You are at a loss from two perspectives in this case. The first is that you will have to pay more interest on the borrowed funds. The other issue is increased running costs. Sport bikes typically have larger displacement engines. When running on the road, such an engine consumes more fuel.
As a result, overborrowing in the context of two-wheeler loans results in a debt burden as well as higher operating costs.
4. Not going through the fine lines
Never overlook your loan agreement. In their excitement to secure funds for bike purchases, many borrowers sign the loan agreement blindly. However, this is the most serious error that anyone can make. Your bike loan agreement contains all of the loan’s finer points. It specifies the interest rate, the method of charging the interest rate, the various types of additional charges, the provisions for foreclosure, and other information. When you read these lines, you can get a sense of any hidden clauses that your lender is hesitant to disclose. Such clauses have the potential to significantly increase your loan’s annual percentage rate.
5. Resale value
Many bikers do not prioritise resale value, which is another mistake they make when applying for a two-wheeler loan in Bhubaneswar. The resale value is an important factor because it tells the lender how secure their funds are. For example, suppose you spend Rs 2 lakh on a bike that has a resale value of Rs 1.3 lakh after three years. If you default in this situation, the lender can still recover the majority of their losses.
Before applying for a two-wheeler loan in Bhubaneswar, always do your homework. Examine the parameters that influence your loan eligibility criteria as well. Working on them can help you obtain funds at a lower interest rate.