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Know more about second-hand two-wheeler loans, including the meaning, features,and benefits. Check the eligibility, documentation, and application process to make an informed decision.
If you are looking for a budget-friendly option or want a specific bike model that is no longer available in the market, you can buy a second-hand bike. To make your purchase more affordable, you can choose to buy a used bike with a loan.
A second hand bike loan, also known as a used bike loan, is a specific type of financing offered by banks and non-banking financial companies (NBFCs). These loans can be suitable for individuals who are looking to purchase a pre-owned two-wheeler.
A loan for a second-hand bike usually comes with moderate interest rates and can cover a significant portion of your two-wheeler’s cost. With this loan, you can finance a second-hand bike on EMI and repay in easy instalments over a fixed period of time.
Interest rates, tenures, & down payment...Confused? Watch the video
Lenders may usually offer up to 100% financing for the used bike’s value. The exact loan amount you may be able to borrow depends on the bike's price, loan tenure, and your financial profile.
Interest rates of a loan for second-hand bikes are generally higher since they tend to be riskier investments for lenders. This can be due to several factors, including
potentially higher maintenance costs, uncertain vehicle histories, and faster depreciation rates.
The maximum tenure for a second-hand bike loan generally is 5 years. This longer duration provides flexibility in managing your loan repayments effectively.
The typical age requirement to apply for a second-hand bike loan is between 21 and 65 years. However, some lenders may approve loans for applicants as young as 18.
Before applying for a used bike loan, it is essential to consider some factors to make an informed decision. Here are some key points to keep in mind:
Budget
Plan your purchase by determining the exact loan amount you need. Ensure that the EMI fits within your monthly budget affordably and does not exceed your financial capacity.
Credit Score
Lenders will check your credit score when you apply for a bike loan, so it is important to maintain a good score. A higher credit score will improve your chances of getting your application approved with favourable terms.
Research and Compare Lenders
Before finalising your decision, check out all the lenders offering two-wheeler bike loans. Compare factors such as two-wheeler loan interest rates, tenure, and other lending terms to find the best fit for your finances.
Choosing a Trustworthy Lender
Select a reputable lender that offers competitive interest rates and favourable terms. You might consider applying for a bike loan from a bank where you already have an account, as you may receive better interest rates and lending terms. Also check the reviews of past customers to make an informed choice.
Check Your Eligibility
Ensure that you meet the two-wheeler loan eligibility criteria set by your preferred lender, such as age, income, employment stability, and credit score. Checking these requirements before applying can help you avoid loan rejection.
If you wish to opt for a second-hand two-wheeler loan, here are some eligibility criteria you need to consider before applying:
Nationality: Indian
Age: Between 18 and 65 Years
Minimum Salary: ₹10,000
Employment Duration: At least 1 year
Employment Status: Salaried or self-employed
Residence: Must have resided in the current city for at least 1 year
When applying for a second-hand bike loan, it is important to have your documents ready and in order. This practice helps avoid rejections or unnecessary delays in your loan application. Additionally, the required documents are straightforward and include:
Identification Proof
Aadhaar Card
PAN Card
Passport
Voter ID Card
Driving Licence
Address Proof
Aadhaar Card
Passport
Utility Bills (such as electricity or gas bill)
Voter ID Card
Rental Agreement
Income Proof
Salary slips from the past three months
Bank statements for the past six months
Income Tax Returns (ITR) for the last two years (for self-employed individuals)
Form 16 or employment certificate (for salaried individuals)
Vehicle Documents
Bike’s Registration Certificate (RC Book)
Valid Insurance Policy
Pollution Under Control (PUC) Certificate
Price Quotation Document for the two-wheeler
Photographs
Most recent passport-sized photographs of the applicant
You can apply for used two-wheeler loans from most banks and NBFCs either online or offline. Here is the process for both methods:
Online Mode
Visit the website of your chosen lender who offers used bike loans.
Navigate to the loan section and fill out the application form with your details. The details can include your name, contact information, employment details, etc.
Upload all the required documents, including ID proof, address proof, income proof, etc.
Cross-check all the information before submitting it for verification.
The lender will verify your application and the documents you have submitted Once approved, the loan amount is directly disbursed to the seller, allowing you to complete the purchase.
Offline Mode
Visit the nearest branch of your chosen bank or NBFC that offers used bike loans.
Obtain the loan application form from a customer service representative.
Fill out the form with all the necessary details.
Submit the required documents, such as ID proof, address proof, and others, along with the completed application form.
The lender will verify your application and the documents you have submitted Once approved, the loan amount is directly disbursed to the seller, allowing you to complete the purchase
Note: The steps could vary to some extent depending on the processes followed by the banks or NBFCs.
If you're planning to buy a second-hand bike, there are various loan and financing options designed to make the process smoother and more flexible. Many banks and NBFCs offer specially tailored solutions to help you make your purchase with ease. Here are some of the common options:
Personal loan
Two-wheeler loan
Used two-wheeler loan
Get a pre-owned bike loan from the dealer
The minimum down payment for a used bike depends on the lender and the bike's valuation. Typically, lenders require a down payment of 10% to 30% of the bike's price. However, this amount may vary based on your credit profile and the specific lending terms set by the lender.
Yes, you can apply for a used bike loan jointly with another applicant, such as your spouse or a family member. It can improve your chances of loan approval, especially if the co-applicant has a strong credit rating or higher income.
No, the bike typically serves as collateral for the loan, so you usually don't need to offer additional security.
If you fail to repay your loan, the lender can take several actions, such as charging late payment fees or reporting the default to credit bureaus, which can negatively impact your credit score.
If the loan is secured, the lender may repossess the bike to recover the outstanding amount. It is advisable to inform the lender if you are facing financial difficulties to explore possible solutions.
Yes, many banks and NBFCs offer loans specifically for purchasing second-hand bikes. These loans typically come with flexible tenures and competitive interest rates, making it easier for individuals to finance a second-hand two-wheeler.
Yes. Even if you are self-employed, you can still get a loan to buy a second-hand two-wheeler bike or scooter, depending on your income.
A loan for a new bike can be costly due to high bike prices and accounts for faster depreciation in initial years. At the same time, a second-hand bike loan costs less with fewer depreciation concerns.
You can get a loan amount of up to 100% of your bike’s value. The highest loan amount you can get is 100 LTV, but it can vary according to your credit score, repayment structure, and vehicle cost.
If you are applying online, you might get instant approval. However, depending on the bank, this process can take a few minutes, with approval ranging from a few hours to a few business days.
Several actions may be taken by lenders if you fail to repay the EMI within 90 days. It includes late payment fees, a negative credit score, an increase in loan tenure. Lenders may also take legal action or proceed with repossession of the vehicle to recover dues.
Yes. According to the Motor Vehicles Act of 1988, it is necessary to have bike insurance, irrespective of the fact the bike is new or old.
A low CIBIL score does not automatically disqualify you from a used bike loan. However, lenders typically prefer scores of around 700 or above. With a lower score, you may qualify for a lower loan amount, higher interest rates or other stricter terms.
Yes, many lenders levy charges like processing fees which can range around 5% of the loan amount for used two‑wheeler loans. However, this may vary across lenders. It is advisable to review the loan agreement carefully to check for any additional charges before applying.
Yes, you may prepay or foreclose a used two‑wheeler loan before its scheduled end date, subject to the lender’s terms. However, this may attract a charge or have set requirements like payment after at least one EMI. Check with your lender about any pre‑payment penalty and the exact closure process before proceeding
The tenures for used bike loans vary across lenders. Some providers offer flexible repayment of up to 60 months for used two‑wheelers. Confirm the specific tenure with your chosen lender as per your eligibility before applying.
In general, documentation for a used two‑wheeler loan will include identity proof, address proof, age proof, and income proof like salary slips, bank statements, ITR etc. Some lenders may ask for the vehicle quotation or verification of vehicle age or usage in case of a pre‑owned bike.
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