Buying a bike with a two-wheeler loan can be a simple and inexpensive way to buy a new bike. It is a good option for those who need more funds to purchase a bike outright. Purchasing a bike through a loan seems simple, but several pitfalls may trip a person along the way.
Here are a few common mistakes bike riders make before applying for a bike loan and how they can avoid them.
Common mistakes to avoid when purchasing a bike with a two-wheeler loan
1. Not researching before choosing a lender
It is easy to get carried away when shopping for a bike with a two-wheeler loan, but it is essential to research before making the purchase.
When buying a bike with a two-wheeler loan, a common mistake is choosing a lender without researching.
The first and most essential step in buying a bike with a two-wheeler loan is researching the lenders offering such products. Many different lenders provide this type of loan, each with its own bike loan interest rates.
The best approach to selecting the right lender is by comparing their different services and checking their bike loan eligibility and interest rates.
2. Deciding on the bike before knowing the approved loan amount
Another common mistake people make when purchasing bikes with two-wheeler loans is deciding on the model they want to buy without knowing how much loan they will be granted.
It can lead to problems because if the bike’s price is high and the loan amount granted is low, borrowers might have to pay from their pocket, straining their budget.
Therefore, checking the bike loan eligibility and obtaining the lender’s approval for the two-wheeler loan is essential before deciding on the bike.
3. Not reading the terms and conditions
Another mistake people make when purchasing bikes with two-wheeler loans is not reading over the terms and conditions before signing off on anything with their lender.
It is crucial to read the fine print of the loan before applying for it to prevent misunderstandings later.
Young and first-time purchasers are more prone to overborrowing. They frequently go over their credit limit to purchase a more expensive, higher-end bike.
However, this is not a wise move as this can lead to higher bike loan interest rates and EMIs and force the borrower to cut vital expenses.
Thus, they must figure out their bike loan eligibility and EMIs in advance and how much of their income they can allocate to them.
5. Not having a repayment plan
If a person has a repayment plan, it can be easier to stay on track with payments.
Making payments on time helps avoid these problems, but having a plan will help keep the person motivated to pay off their loan as soon as possible.
Taking a bike loan can be a simple and affordable way to purchase a new bike. However, riders make several common mistakes before taking a loan, which can lead to financial problems down the line.
By carefully researching and reading the terms and conditions, riders can easily avoid these pitfalls and purchase their new bike.