Are Bike Loans secured or unsecured?

A bike loan can help you purchase the two-wheeler you want without using your savings. It offers many other benefits as well, making it a favourite among customers

Travelling is easier with a bike. It does not get easily caught in traffic, offers more mileage, and allows you to travel at your convenience. Buying a bike has also become easier, thanks to two-wheeler loans. Salaried and self-employed individuals can apply for a two-wheeler loan from instant loan app and buy the bike they have been waiting for.

Two-wheeler loans come in two forms: secured and unsecured. Understanding the distinction between the two is critical to saving money. Usually a two wheeler loan is always a secured loan, however, at IDFC FIRST Bank, we do offer an unsecured loan with no hypothecation, only to cash customers, who are ready to pay 30% of the asset amount

Let us dive into what each of them offers.

What is a secured loan?

A secured loan is a type of loan backed by an asset. The asset could be your house, investments, or your vehicle. In a secured bike loan, the vehicle itself serves as collateral for the loan. The lender has the authority to sell your vehicle if you do not pay your secured loan EMIs timely.

What is an unsecured loan?

Unsecured loans do not attract collateral. Credit cards, education loans, and personal loans are examples of unsecured loans. While unsecured loans are easier to get, they attract high interest. That is because lenders hedge the risk of providing the loan without collateral.

Benefits of taking a bike loan

There are many benefits of taking a bike loan. A few of them include:

Limited documentation

When you apply for a bike loan with IDFC FIRST Bank, you do not have to go through a lengthy documentation process. You can avail a loan by uploading your payslips, proof of age and employment, bank records, and your home address on IDFC FIRST Bank's mobile banking app. Once you do it, the application is processed and evaluated by a team. If they feel you have the right repayment appetite, your loan will be approved swiftly.

There are two broad profile types for customers and loans:
 

1. No income proof loan under which only KYC and address proof documents are required

2. Income proof loan: Where in addition to the above, bank statements or payslips/ITR is required

At IDFC FIRST Bank, digital documentation is our USP. We offer instant loans basis digital documentation, like EKYC, Emandate and Esigns on the loan agreement.

Customised repayment plan

Unsecured loans come with multiple repayment plans. You can choose your plan depending on your financial situation. When your loan is sanctioned, you must confirm the plan you want. At IDFC FIRST Bank, EMIs can be customised basis change in loan tenure.

Attractive interest rate

Different lenders offer different interest rates on unsecured loans. Bike loan interest rates at IDFC FIRST Bank start from 9.99%, which is among the lowest in the industry. You can get better rates if you have a healthy credit history.

What to do before getting a bike loan?

While getting a bike loan is easy, you must do a few things before applying for a loan. The most important ones include:

Evaluate your budget

Before getting a bike loan, evaluate whether you can afford it. Do not overborrow as it can disrupt your financial budget and lead to trouble down the line. You might even land in debt, which could affect your credit score and make it difficult to get loans in the future. You can use a two-wheeler loan calculator to determine whether you can repay the bike loan.

Have a repayment plan

Before applying for a bike loan, ensure you also have a repayment plan. Then, speak with the lender to figure out the best repayment plan for you. Once you have it, stay disciplined and stick to the plan. Which enables you to maintain a good credit score ensuring no hassle in future credit.

A bike loan is the best way to fulfil your need for a two-wheeler without diving into your savings. Instant loan apps simplify the process of getting a bike loan, helping customers conveniently meet their requirements online.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.