a Riding two-wheeler is a dream for many, and with the quick availability of a bike loan, it’s easier than ever before. However, getting a two-wheeler loan involves more than just paying the price of the vehicle. Various charges are associated with getting a two-wheeler loan, from processing fees to interest rates. In this blog, we will delve into the different charges that accompany a bike loan and help you understand what fees you may expect when getting a loan for your dream bike.
Fees and charges for getting a bike loan
Listed below are the major fees levied by lenders on a bike loan:
- Loan processing charges: The lender charges a fee for processing the loan application. It covers the cost of evaluating the borrower’s creditworthiness, verifying the information provided in the loan application, and processing the loan disbursement.
- Stamp duty and other statutory charges: These charges are fees levied by the Government for various legal and regulatory requirements related to the loan. It includes charges for preparing and registering the loan agreement and various taxes and fees related to the loan.
- Documentation charges: The lender charges a fee for preparing and verifying the loan documents, such as the loan agreement and other related documents.
- RTO charges: RTO stands for the Regional Transport Office, which is responsible for registering vehicles in India. The Government levies RTO charges for registering the bike and obtaining the necessary permits and licenses. These charges may include fees for road tax, registration fees, and other related charges.
Post-loan disbursement charges
Post-loan disbursement charges are fees after the loan has been disbursed to the borrower. This may include the following charges:
- Prepayment Charges: Lenders charge prepayment fees if the borrower pays off the loan before the end of the loan tenure. These charges are usually levied as a percentage of the outstanding loan amount. Moreover, these charges compensate the lender for the loss of the interest that they would have earned had the loan been repaid per the original repayment schedule.
- Late Payment Fees: The lender charges a fee if the borrower misses loan repayment or makes a payment after the due date. Lenders charge late payment fees usually as a fixed amount or a percentage of the overdue amount. These are charged to compensate the lender for the inconvenience caused by the late payment.
Why should you compare charges for bike loans?
Bike loans are a great way to finance the purchase of your dream motorcycle. However, before signing on the dotted line, it’s essential to consider the charges associated with the loan. Here are some compelling reasons you should compare bike loan charges before deciding.
- Avoid hidden costs: When it comes to bike loans, there are often hidden costs that can add up quickly. These may include application fees, processing fees, and prepayment penalties. By comparing fees, you can better understand the loan’s overall cost and avoid surprises.
- Get the best interest rate: The bike loan interest rate can greatly impact the total cost of the loan. By comparing the offers from different lenders and interest rates, you can find the best deal and save money in the long run.
- Know what you’re paying for: Some bike loans have added features and benefits, such as insurance or extended warranty coverage. By comparing the fees, you can determine whether these extra features are worth the cost.
- Make an informed decision: Comparing fees allows you to decide which bike loan is right. You will have a better understanding of the total cost of the loan, as well as the terms and conditions associated with it.
Comparing fees for bike loans is a crucial step in the loan process. It helps you avoid hidden costs, find the best bike loan interest rate, understand what you’re paying for, and make an informed decision. So, take this important step and take the time to compare charges before committing to a bike loan.
In conclusion
There are various fees for a two-wheeler loan. These may include processing fees, loan statement charges, and associated charges levied by the lender. It is important to be aware of these costs and to shop around to find the best option. Some of the leading and most-trusted non-banking financial institutions provide hassle-free service and may have additional charges based on their location. Make sure you do proper research before availing a loan.
