When it comes to financing a 2-wheeler, one of the essential factors that comes into play is creditworthiness. Creditworthiness is defined as an individual’s track record when it comes to handling credit and debt payments. A good credit score is seen as an important factor in availing of a 2-wheeler loan. In this article, we will dive deeper into understanding the role of creditworthiness when it comes to 2-wheeler loans.
What is creditworthiness?
Creditworthiness, as mentioned earlier, is the ability of an individual to repay loans, and manage
credit, and debt. This ability is assessed based on a credit score, which is a numerical representation of an individual’s creditworthiness. The credit score is calculated based on factors such as loan repayment history, credit card utilization, and credit inquiries.
How big of a role does it play in 2 two-wheeler loans?
Creditworthiness plays a massive role in determining whether a person is eligible for 2-wheeler
loans. When applying for a 2-wheeler loan, lenders will check and evaluate the borrower’s credit score. Based on the score, lenders decide whether the borrower is eligible for the loan and at what interest rate. The higher the credit score, the lower the interest rate on the loan.
Is creditworthiness necessary for all loans?
Yes, creditworthiness is necessary for all types of loans, including 2-wheeler loans. Good credit reflects the borrower’s financial responsibility and ability to repay loans on time.
Why is creditworthiness important?
A good credit score improves the individual’s financial aspect in many ways. It enables them to get better interest rates on loans, access to more credit options, and qualify for lower insurance premiums. It also indicates to lenders that the borrower is financially responsible and has a track record of repaying loans on time.
What do you need to know before getting a 2-wheeler loan?
Before availing of a 2-wheeler loan, one should carefully review their credit report, get a credit
score, and understand their financial standing. It is essential to understand the loan terms, including interest rates, processing fees, prepayment charges, and loan tenure. Also, compare the loan offers available from different lenders to choose the best deal.
Who all provides 2-wheeler loans in India?
Several banks and financial institutions offer 2-wheeler loans in India:
- Axis Bank
- HDFC Bank
- ICICI Bank
- State Bank of India (SBI)
- Bajaj Finserv App
Who is one of the best at providing 2-wheeler loans?
A comparative analysis of 2-wheeler loans provided by top loan providers can help you make an
informed decision. In India, 2-wheeler loans have become increasingly popular among individuals who want to purchase a motorcycle or scooter. Three of the top 2-wheeler loan providers in India are ICICI Bank, State Bank of India (SBI), and Bajaj Finserv App.
ICICI Bank offers 2-wheeler loans with loan tenures ranging from 12 to 36 months. Individuals can apply for a 2-wheeler loan online or visit a nearby branch to submit their application. One of the significant highlights of ICICI Bank is that they offer 100% funding on specific 2-wheeler models. The interest rates vary from 10.50% to 28.00%, depending on the borrower’s creditworthiness. Along with 2-wheeler loans, ICICI, also provides an insurance policy that covers the 2-wheeler.
State Bank of India (SBI)
State Bank of India (SBI) offers 2-wheeler loans with loan tenures ranging from 12 to 60 months. Individuals can apply for the loan online or walk into an SBI branch. The bank offers a fixed rate of interest, which is currently 7.50% (as of August 2021). SBI provides a loan amount ranging from Rs. 10,000 to Rs. 2,50,000, depending on the borrower’s credit score. However, the bank requires at least 50% of the 2 wheeler’s cost to be funded by the borrower.
Bajaj Finserv App
The Bajaj Finserv App offers 2-wheeler loans via its app, making the loan application process more convenient for individuals. The loan can be availed without any collateral and minimal documentation in a few steps through their 2-wheeler loan app. The interest rate ranges from 14% to 27%, depending on the borrower’s credit score. The bank doesn’t charge any prepayment penalty and offers flexible repayment tenure options of up to 36 months.
All three loan providers offer a hassle-free application process to make getting a 2-wheeler
loan quick and convenient for individuals. However, notable differences exist between these providers’ interest rates, repayment tenures, and the availability of 2-wheeler loan apps.
ICICI Bank, SBI, and Bajaj Finserv App have varying repayment tenure and interest rates according to the borrower’s credit score. ICICI Bank offers a higher interest rate of up to 28%, whereas SBI enjoys a lower rate of 7.50%. Bajaj Finserv offers an interest rate ranging from 14% to 27%, depending on the borrower’s credit score.
In terms of repayment tenure, ICICI Bank and Bajaj Finserv provide repayment options of maximum 36 months, while SBI’s repayment tenure goes up to 60 months. Bajaj Finserv stands out as it offers a dedicated 2-wheeler loan app to facilitate instant loan approval. ICICI Bank and SBI don’t provide such an app to allow quick and hassle-free loan applications.
Creditworthiness plays a crucial role in availing of 2-wheeler loans. It determines the borrower’s eligibility and interest rate for the loan. It is essential to review credit scores and understand the loan terms before applying for a 2-wheeler loan. Borrowers must keep in mind their own credit score, repayment tenure, and preferences when choosing the right lender. The Bajaj Finserv App for 2-wheeler loans make it quite a convenient option, however, comparatively their interest rate is on the higher side. SBI with its significantly lower rate of interest, is suitable for borrowers who prefer quick and low interest loans. ICICI Bank, with its flexible loan offerings, is a great option for individuals who prefer to invest in premium 2-wheeler models. One should compare loan offers from different lenders and choose the best deal that suits their financial needs.