Second Hand/Used Two Wheeler Loan

Second-hand bikes are for those who are looking to make an economical purchase or want a specific bike model that is no longer available in the market. Regardless of the reason, buying a bike will be more affordable 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 are for individuals looking to purchase a pre-owned two-wheeler. 

With this loan, you can cover a significant portion of your bike's cost and you can repay the amount with the help of equated monthly instalments (EMIs) over a fixed period.

If you are opting for a used two-wheeler loan, here are some pros of second-hand bike loans. 

• Lower Loan Amount

Due to the reason that the bike is second-hand, the overall cost is reduced, and the overall loan amount is decreased, too. The lower bike value often means a smaller loan and easier approval. Also, it’s easy to get approval compared to financing for a new bike. 

• Flexibility

When you buy a used bike, you have the opportunity to customise it compared to the ease of customisation in a new model. 

• Lower Insurance Premiums

Compared to new bikes, the insurance premiums for older bikes are lower. So, maintaining insurance for the bike becomes more affordable.

• Affordable to Maintain

The maintenance cost for second-hand bikes or scooters is less than a new model. So, you can keep the bike in good condition without paying much. 

• Additional Benefits

Buying a used bike may also support environmental sustainability by reducing the demand for new production.

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 and ensuring that the EMI fits within your monthly budget. The EMI should be affordable and 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 checking the reviews of past customers will help in the choosing process as well. 

• Check Your Eligibility

Ensure that you meet the two-wheeler loan eligibility criteria set by lenders, such as age, income, employment stability, and credit score. Checking these requirements before applying will help you avoid rejection.

• Repayment Capacity

Assess your monthly income and financial situation to determine how much you can afford to repay without straining.

• Loan-to-Value (LTV) Ratio

The LTV ratio indicates the amount of loan you can receive based on the bike's market value. A higher LTV ratio means a lower down payment but may come with higher interest rates due to the increased risk to the lender.

• Down Payment

When buying a used two-wheeler on EMIs, choose a down payment that suits your budget. This ensures financial stability throughout the loan period. 

• Additional Charges

Besides the interest rate, account for costs like processing fees, administrative charges, prepayment penalties, and late fees. Evaluating these charges across lenders helps you find a more cost-effective loan.

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

Most banks and NBFCs offer used two-wheeler loans, and you can apply for these loans either online or offline. Here is the process for both methods:

(Please note: The steps could vary to some extent depending on the processes followed by the banks or NBFCs)

Offline Mode

1. Visit the nearest branch of your chosen bank or NBFC that offers used bike loans.

2. Obtain the loan application form from a customer service representative.

3. Fill out the form with all the necessary details.

4. Submit the required documents, such as ID proof, address proof, and others, along with the completed application form.

After submitting the form, the lender will verify your documents and assess your eligibility.

Once approved, the loan amount will be disbursed directly to the seller, allowing you to take possession of your bike.

Online Mode

1. Visit the lender’s website that offers used bike loans.

2. 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.

3. Upload all the required documents, including ID proof, address proof, income proof, etc.

4. 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

If you are looking to purchase a second-hand or used bike, there are several loan and financing options available to make the process easier and more flexible. Many banks and Non-Banking Financial Companies (NBFCs) offer tailored solutions for such purchases. 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