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Indian Bank Two-wheeler Loan

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Indian Bank Two-wheeler Loans

Indian Bank was founded in 1907 and offers consumer banking, corporate banking, finance and insurance, mortgage loans, investment banking, merchant banking, private equity, private banking, savings schemes and credit cards amongst other products. It is a government-owned, public sector banking company which has its headquarters in Chennai, Tamil Nadu. The bank has over 2500 branches spread across the nation.

The Growth of Two Wheelers

India is one of the largest manufacturers and users of two-wheelers in the world. From scooters to super bikes India has it all. This kind of growth in motorcycle usage across the country is due to the availability of easy two-wheeler loans.

With most families in the country becoming nuclear, two-wheelers are an economic and fast way of travelling. With the swelling traffic on the roads it is very easy to maneuver through to quickly reach one’s destination.

While on the one hand, commuter bikes have found a place in Indian homes, motorcycle manufacturers like Royal Enfield and Harley Davidson are promoting their motor bikes as a lifestyle, and enthuse a biking culture which has resulted in biking groups who go on long trips which are taken well by audience and these bikes too have been gaining popularity.

The youth (age between 18 to 25) find it easier to afford a bike for their commutations as motor cycles are fuel efficient and affordable with the entry level motor-bikes start from Rs.40000.

With targets of zero emissions, India too is looking at electric two wheelers with all the major manufacturers either acquiring startups or developing their own electric vehicles.

Let us now look at how the two-wheeler loans can be financed.

Two-wheeler loans are relatively easier to obtain and their installments not very taxing it has become very easy to get a two-wheeler and pay off the loan.

People who have the finances to pay for the bike in a single payment also go for two-wheeler loans. They see that by paying the loan in monthly installments they can utilize the funds they have in various investments that make them money.

Also, they continue to use the bike while paying for it, where once the payment is done the owner can sell the bike and go for a newer and better model as motorcycle’s cost is comparatively lesser than cars.

A two-wheeler loan is also a method through which most people attempt to get their credit history, a two-wheeler loan when repaid consistently will have an impact on your credit score positively and would help you get better loans and credit cards in the future at favorable rates.

Why go for two-wheeler finance?

  • Two-wheeler loans are easy to get and easy to pay off.
  • The resale value of motor cycles is high and once you complete a loan you can start thinking of a new bike immediately
  • When paid off consistently affects your credit score positively and helps you build a credit profile.
  • Some banks also provide zero down payment bike loans, where you don’t have to put up your own money to buy the bike

Documentation Required for Allahabad Bank bike two-wheeler application

Important documents to be submitted while applying for personal loans with Aditya Birla

  • Completed loan application
  • 3 Passport size photographs
  • Proof of identify (photo copies of Voters ID card/ Passport/ Driving licence/ IT PAN card)
  • Proof of residence (photo copies of recent Telephone Bills/ Electricity Bill)
  • Statement of Bank Account/ Pass Book for last six months
  • Form 16/IT returns for the last two financial years for salaried employees
  • IT returns for the three years for self-employed professionals

Who are the loan providers?

Banks: Which includes all types of private banks, commercial banks, state-owned banks, scheduled banks or non-scheduled banks, offer two-wheeler loans as part of their products and services. It does not matter if you are an existing customer or not you can still avail a two-wheeler loan.

NBFCs: Non-Banking Financial Companies (NBFCs) are organizations that have got the license from RBI to operate as a financial institution. They provide services only in the matter of loans, mutual funds or wealth management categories not taking part in banking functions like Savings account or transactions. In the case of two-wheeler loans many manufacturers like Hero Corp and Bajaj offer loans.

How to avail two-wheeler loans?

You can apply for 2-wheeler loans in two ways

Online: You can apply for two-wheeler loans online which almost all the banks and NBFCs offer. They also offer EMI calculators which you can use to calculate your EMI amount for each month. Once you choose your motor bike you will know how much loan amount you need and based on that you can vary your tenure and interest rate to know which will suite you.

Offline: You can directly approach any branch of any bank or NBFC and meet their representative to apply for a loan. Here you could negotiate your loan rate and tenure. You can also avail a loan at the dealers as most dealers have tie ups with banks or NBFCs where at the time of purchase you can avail a loan.

Two-wheeler Loan Eligibility Criteria

There are certain factors or criteria stipulated by banks which needs to be satisfied before loan applications are approved. They are

AgeMinimum 21 years
Maximum – 65 years
NationalityIndian
Employment TypeSalaried or Self-employed
Employment statusEmployed/In-business for at least 1 yrs. and at least 6 months with current employer/business
Minimum IncomeRs. 50,000 per annum
Maximum Loan AmountOn an average financial institution pay up to 90% of the loan
TenureMinimum – 12 months
Maximum – 60 months
Credit ScorePreferred 750

These are the general criteria which you need to satisfy for your loan to be approved. These criteria will change from bank to bank.

Factors Affecting Two-wheeler Loan Application

Apart from the eligibility criteria there are certain factors that affect your loan application mainly the minimum salary expectation and your loan amount eligibility. They are

1. Location: the place where you stay play an important part in your loan application. This determines the minimum salary amount for you to be eligible for a two-wheeler loan. The minimum salary is higher in the cities and more so in the case of metropolitan cities like Mumbai.

2. Income: The loan is given to people with an annual income of Rs. 50,000. Thus, income is not a major factor when you apply for a motor-cycle loan.

3. Housing situation: Banks would prefer borrowers to stay in a single location as they prefer borrowers to have a stable address to make sure they avoid defaulters who continuously change address.

4. Company of employment: Working for a reputed company close to a year could indicate to the lender you are in a stable job, the better the rating of the company the better the interest rate can be negotiated.

5. Existing credit: If you already have another loan or credit card debt will be a factor in determining your loan amount and interest rate.

6. Credit history: This loan is a good way to improve your score if you are new to credit. Credit score is not a major factor but if considered a score of 750 is preferable.

There are multiple factors that banks consider before approving any two-wheeler loan. Let us look at the Two-wheeler Loan offered by Indian Bank

Indian Bank 2-wheeler Loan Eligibility

Purpose Indian Bank provides funds for purchasing of fresh 2 wheelers i.e. Scooters, Motor Cycles, Mopeds, Battery-Operated Scooters etc. of any make and model.

Eligibility

Minimum age of applicant:

The applicant should be minimum of 21 years old or above.

Maximum age of applicant:

The maximum age limit is 65 years at the time of loan maturity to get two-wheeler loan from Indian Bank.

Minimum employment:

The applicant must be a salaried or self-employed individual and should be working for at least 1 year and live in the current residence for 1 year.

Maximum Loan Amount

You can get up to 10 Lakhs for the purchase of a new vehicle.

Tenure: Loan can be repaid within a maximum period of 60 months.

Margin: 15% of cost of the new vehicle

Security: Hypothecation of Two-Wheeler to be purchased.

Processing Fees: Maximum of 0.229% of the loan amount will be charged as processing fee subject to maximum of INR 10191.

Interest rate:

The base lending rate is 9.45% and the it is subject to change at the sole discretion of the bank.

How to Apply for Indian Bank Two-Wheeler Loan?

You can either apply online or visit a nearby Indian Bank branch for the application. You can also download the 2-wheeler loan application form from the Indian Bank official website, complete the form and submit it to the bank representative.

Paying Your Indian Bank Two-Wheeler Loan

The Indian Bank 2-wheeler loan EMI can be repaid in following three ways.

Standing Instruction (SI): If you are an existing account holder with Allahabad Bank, Standing Instruction is the best mode of repayment. Your EMI amount will be debited automatically at the end of the monthly cycle from the Allahabad Bank account you specify.

Post-Dated Cheques (PDCs): You can submit post-dated EMI cheques from a non-Allahabad Bank account at your nearest Allahabad Bank Loan Centre. A fresh set of PDCs will have to be submitted in a timely manner. Please note Post Dated Cheques will be collected non-ECS locations only.

Electronic Clearing Service (ECS): This mode can be used if you have a non-Allahabad Bank account and would like your EMIs to be debited automatically at the end of the monthly cycle from this account.

It is recommended that you opt for either the SI or ECS mode of payment for faster and less prone to error than the use of PDCs.

Indian Bank Two-Wheeler Loan FAQ

1. What are the age limits of applicant of Indian Bank?

The minimum age must be 21 years and maximum of 65 years old at the time of loan maturity.

2. How much of financing do I get on Indian Bank two-wheeler loan?

The customers can get up to INR 10 Lakhs for the purchase of a new vehicle.

3. Are there any processing fees for Indian Bank two-wheeler loan?

Yes, maximum of 0.229% of the loan amount will be charged for processing Indian Bank two-wheeler loan.

4. Do self-employed individuals provide guarantee to get a bike loan from for Indian Bank

Yes, self-employed individuals need to provide a single guarantor with good credit score standing

5. Can I prepay the loan?

Yes, you can prepay the loan.

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