Buying A Bike On EMI – All You Need To Know

By Jonas Lafontain 8 months ago

Many Indian youth share the dream of owning a bike, but financial constraints can delay this aspiration until a steady income is achieved. Choosing a bike on an Equated Monthly Instalment (EMI) becomes wise, especially for those just entering the workforce and needing a personal commute.

Why EMI For A New Bike?

Buying a bike on EMI fulfils your dream and brings numerous benefits, providing long-term financial flexibility. Critical concerns about EMIs involve the purchase process, instalment calculations, and understanding down payments.

Steps To Purchase A Bike On EMI

Step 1: Budget Estimation

Initiate the process by setting a comprehensive budget encompassing the loan cost, bike price, and down payment. This initial step lays the foundation, guiding you on the affordable bike types, financing amounts, and monthly instalment expenses.

Step 2: Explore Options

After defining your budget, delve into the bike market. Explore various models aligning with your preferences and budget constraints. To make an informed decision, compare interest rates, terms, and processing fees offered by different lenders, including banks and online platforms.

Step 3: Qualification Verification

Ensure you meet the eligibility criteria for your chosen bike and loan option. Your eligibility is influenced by factors like employment status, age, credit history, and income. The finance company evaluates these parameters to determine the loan amount and interest rate applicable to you.

Step 4: Streamlined Loan Application

Once you’ve identified your dream bike and a suitable loan, proceed to the loan application. Whether in person or online, provide the necessary personal details for documentation, simplifying the application process.

Step 5: Loan Approval and Disbursement

After submission, your application undergoes review, including a credit check. Upon approval, funds are disbursed to you or the bike dealer based on the agreed terms.

Step 6: Essential Bike Insurance Online.

Opting for an instalment plan mandates securing bike insurance online. This coverage protects against unforeseen events like theft, collisions, or natural disasters. Claims are subject to terms and conditions set forth under the motor insurance policy. *

Step 7: Timely EMI Payments

Following loan disbursement, initiate timely EMI payments. The fixed monthly instalments can be conveniently paid through various methods, including cash, online payments, or auto-debit. Punctual payments mitigate the risk of late fees and accumulating interest.

Step 8: Full Loan Repayment

The final step involves diligently repaying the loan, ultimately making you the absolute owner of your dream bike. Consistent and timely repayments positively impact your credit score, solidifying your financial credibility.

Benefits Of Purchasing A Bike Loan On EMI

  • Convenient Process: EMI payments are hassle-free, allowing you to manage the loan amount without a hefty one-time payment.
  • Affordability: EMI options make monthly payments affordable, preventing a significant financial burden.
  • Enhanced Credit Score: Consistent on-time EMI payments contribute to an improved credit score, beneficial for future financial endeavours.
  • Tax Benefits: Interest paid on the bike loan is eligible for tax benefits under the Income Tax Act, reducing overall loan costs. **
  • Low-Interest Rates: Competitive interest rates make bike loans on EMI an attractive and cost-effective financing option.

Third-party bike insurance is mandatory by law, so always make sure that your bike is insured. You can renew two-wheeler insurance online in a hassle-free manner. *

* Standard T&C Apply

** Tax benefits are subject to change in prevalent tax laws.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.