Bike Loan

Online Platform -Now customers can apply for a two-wheeler sitting at home and get the approval from the digital platforms like OTO. This mode provides a lot of convenience to the customers since they do not have to go anywhere for the loan process since it is completely digital and paperless. Furthermore, such platforms also have a lot of unbiased information about the vehicles which helps you choose the right vehicle for you based on your needs.

Loan application at two-wheeler showroom -Customers can also visit multiple showrooms to decide the vehicle which he wants to buy and then showroom will put him in touch with loan executives of multiple banks / NBFCs who can put the customers loan application in the bank and get the approval.

Income proof plan -In this scheme financier would require an income proof of the customer along with the KYC documents i.e. Pan card and Aadhaar card to process the loan. Income proof document can be either Bank Statement, Salary slips, Income tax form etc. Generally people should go with the scheme since Income proof gives a better clarity to financier about the customer’s income they are able to offer a better rate of interest and lower downpayment.

No Income proof plan -In this scheme financier does not require an income proof of the customer just KYC documents i.e. Pan card and Aadhaar card to process the loan are enough. In this scheme customer might not get a very good deal in terms of rate of interest and downpayment.

Flat Interest Rates: Flat rates are calculated on the original principal amount throughout the loan tenure. In this calculation a rate of intertest is decided and same rate of interest is applied on the loan amount throughout the tenure to calculate the EMI.

Reducing Balance Interest Rates: This is the most common type of interest rate used in loans. With reducing balance rates, interest is calculated on the outstanding principal amount, which decreases with each repayment. As a result, the interest component gradually reduces, making it a more economical option.

CIBIL Score: Your CIBIL score, also known as your credit score, is a numerical representation of your creditworthiness. It's based on your credit history, including factors like repayment behavior, credit utilization, and the length of credit history. Lenders use your CIBIL score to assess the risk associated with lending to you. A higher score implies lower risk, which can result in a better interest rate. To improve your CIBIL score:

Reducing Balance Interest Rates: This is the most common type of interest rate used in loans. With reducing balance rates, interest is calculated on the outstanding principal amount, which decreases with each repayment. As a result, the interest component gradually reduces, making it a more economical option.

Loan Tenure: Typically the loan tenures for a two wheeler ranges from 12 months to 36 months. A few players offer tenures up to 48 months as well, OTO is one among them. The duration of the loan impacts the interest rate of a two wheeler loan. Shorter tenures usually come with lower rates, while longer tenures might have slightly higher rates due to the increased risk for financier.

Loan Amount: The amount you're borrowing also affects the interest rate for a two wheeler loan. Financier might offer lower rates for larger loan amounts as they stand to gain more interest over time.

Downpayment: The downpayment you make upfront can also influence the interest rate for a two wheeler loan. A higher downpayment often demonstrates your commitment and reduces the loan amount, potentially leading to a better rate.

Income and Employment Stability: Financier consider your income and job stability to assess your repayment capability. A stable income and employment history can positively impact your interest rate.

Market Conditions:Economic conditions and market fluctuations can impact interest rates. During times of low-interest rates, borrowers might benefit from more favorable rates.

a. Pay the downpayment

b. Sign the loan agreement

c. Activate the NACH mandate – This will enable to financier to debit the EMI amount from your bank account automatically without your intervention.

d. Sign the Hypothecation and RTO documents for registration

Processing fee - This is one time amount that customer need to pay for processing the application with the financier. This typically ranges from 3% - 5% of the loan amount that you are applying for. This majorly covers the expenses that financier is doing to process the loan

Loan cancellation charges - In case you wish to cancel the loan after availing it (before vehicle registration), you need to pay upto 5% of loan amount to get the loan cancelled. It varies from financier to financier. In case of OTO if the loan cancellation request is raised within 3 days of loan disbursement then OTO do not charge anything else standard rates apply

Bounce Charges - This charge is applicable only if the auto debit from you account gets bounced due to insufficient balance in your bank account. Generally this is amount is Rs 500+GST

Foreclosure charges - This charge is applicable if you wish to close your loan in between the tenure. Your need to pay a certain % of the remaining principal amount to close the loan. This is charges to cover some part of the interest loss that financier would incur due to loan foreclosure. This varies from financier to financier but is typically in the range of 4-5% of the principal outstanding.

Delayed Repayment charges - This charge is applicable if you pay your EMI after the EMI due date. This is levied only on the EMI amount and for the days the EMI was paid late.

NOC Charges - Some of the financier charge for NOC as well. You get NOC only if yu have paid the entire outstanding dues of the loan and is required to remove the hypothecation from the Registration card of your vehicle. OTO do not charge any NOC charges.

Maintain a healthy CIBIL score -This is an important factor to get a good loan offer. You can maintain a good CIBIL score by:

Higher Downpayment - Making a higher downpayment shows your commitment towards the loan and hence gives an additional comfort to the financier resulting in a better rate of interest

Shorter Tenure - Opt for a shorter loan tenure if your finances allow. Shorter tenures often come with lower interest rates due to lower risks

Income Proof - Applying in a Income proof scheme for a two wheeler loan provides you with a better loan offer.