How to get a Pre-Approved Loan for Two Wheeler?
Last Modified: 4-April-2022
Transportation has become a necessity to travel from one place to another. And one of the most cost-effective means of transport used by people of all age groups is two-wheelers. This is because two-wheelers have low maintenance costs and are convenient to cover long distances, particularly in metropolitan places. There are various ways in which one can finance a two-wheeler loan. One of them is pre-approved loans for two-wheelers. Muthoot Capital Services Ltd. is among the country’s most progressive automobile companies, which seek to empower all Indians by offering several services. Its bike loans provide about 100% of the on-road price with flexible repayment tenures and attractive interest rates.
The introduction of two-wheeler loans has purchased bikes quite affordable and convenient for all users. A flexible interest rate and suitable time duration as per the financial plans help ease the payment burden. Moreover, with the help of Muthoot Capital’s two-wheeler loan EMI calculator, you can quickly determine the amount of equated monthly payments as per the interest, loan amount, and tenure requirements.
Let us understand what pre-approved loans are for two-wheelers and the factors influencing them.
What are Pre-Approved Loans?
Pre-approval loans refer to those loans offered to borrowers whose creditworthiness is considered acceptable by different financial institutions. The primary factors which distinguish these loans are collaterals and short tenures. Moreover, since the lender already has proper knowledge about creditworthiness, such loans have a quick disbursement period of loan amounts. The borrower also gets access to competitive interest rates and flexibility in repayment tenures.
Factors Influencing Pre-Approved Loans for Two Wheelers
Before taking any loan, it is crucial to understand the various factors which influence such loans. These include repayment tenure, credit score, income levels, and prior financial obligations, and these are explained below.
A credit score accurately represents an individual’s financial status and well-being. This is the primary factor that all financial institutions check before lending loans. The repayment capacity of an individual is assessed based on the credit score. Various organizations determine credit scores. These include Credit Rating Information Services of India Limited (CRISIL), Credit Information Bureau (India) Limited, and Credit Analysis and Research (CARE) Limited. The minimum CIBIL score which you need to obtain two-wheeler loans is 750.
Repayment tenure refers to the period over which the total loan amount is repaid in installments. There is an inverse relationship between the repayment tenure and the willingness of the financial institutions to lend loans. The lesser the duration of repayment, the more is the willingness of the lender to give you a loan. Moreover, it’s easier to get approval for loans with shorter repayment tenures.
The income levels of the borrower directly influence the eligibility for two-wheeler loans. This is because pre-approved two-wheeler loans are a type of short-term collateral-free loans, and therefore, evidence of a stable income source is imperative. It is crucial since higher-income results result in lower bike loan interest rates.
The repayment history and prior financial obligations play an essential role in determining whether or not an individual will get access to two-wheeler loans. It is the aspect that is checked after the credit score. Therefore, borrowers must avoid or clear all large outstanding debts before availing of any type of loan. This, in turn, leads to smooth disbursement of the loan amount.
There are two forms of repayments apart from the equated monthly installments available across the country. These are part payment and prepayment. In the former, the borrowers pay a bulk amount to the financial institutions or lenders, which is lower than the entire principal amount owed. This bulk amount covers a large portion of the total amount due. However, in the latter, the borrower repays the entire amount before the repayment tenure. The lender also settles the amount, and the process involved is termed foreclosing. Prepayment is an indication of financial stability and ensures a healthy credit score.
A proper financial plan is crucial to ensure appropriate management and flow of funds, precise evaluation of income and expenses, and setting a budget. Various types of loans can be availed from financial banks, such as loans against property, mortgage loans, or two-wheeler loans. Different financial institutions offer different schemes while taking these loans. Muthoot Capital provides innumerable benefits to consumers availing of bike loans. It includes flexible repayment tenures, quick documentation, special schemes, hassle-free processes, and low down payment. These factors play a significant role while availing of loans in the future. Contact us to access attractive bike loans interest rates and fulfill your dream of two-wheeler loans.