The reason to opt for a two-wheeler in present day is not only that a bike or a scooter sync well with the traffic and road infrastructure in India but also allows safe travel while maintaining social distancing during COVID-19 times.
Moreover, bikes are affordable and can be bought in 1/5th of the price of purchasing a car. Many save funds to buy their favourite bikes while a majority of people depend on loans to achieve their dream of owning a two-wheeler. Owing to the high demand for motorcycles and the associated financial requirements, many lenders in the market provide financial assistance. Banks, big and small, have been offering two wheeler loans for a long time and are benefitting the borrowers but with the increase in diverse types of customers, banks would not be able to serve all the borrowers.
Benefits of availing bike loan from NBFCs:
Non-Banking Financial Companies (NBFC) are entities incorporated under the Companies Act of 1956 to provide financial services to individuals or organizations. NBFCs are growing tremendously and pose a high competition to the traditional banking system in terms of services, thus gaining the confidence of the borrowers. Let us understand the key benefits of availing a two wheeler finance from NBFC in the below section;
1. Faster Processing:
One of the significant benefits provided by the NBFC is more rapid processing of loan applications as opposed to traditional banks. As a bike enthusiast, you would be on a lookout for seasonal offers and would like to leverage on the same, but the immediate requirement of funds can serve as a hiccup. Banks, public and private will take some time to process your loan application, and you can miss out the seasonal offer to own your dream bike. Thus, you can leverage the quicker processing nature of NBFCs to your benefit. Few borrowers do not mind higher interest rates if the processing time is more rapid.
2. Competitive bike loan interest:
As the bike finance market is vast, both banks and NBFCs provide loans at competitive interest rates to their customers. With the rise of demand for such financial products, NBFCs want to lower the two wheeler loan interest rate so that they can compete with the banks in this regard. Such a move works in favour of the borrowers as they can take advantage of the low-interest rates offered by NBFCs. Lower interest rates also mean lower monthly EMI, which in turn will give rise to a comfortable repayment phase.
3. Absence of stringent rules:
Rules and regulations bind the traditional banking system. While the modern banking system strives to be flexible with customers, a borrower would come across a few stringent rules of the bank. Such laws would generally delay the processing of bike loans and disappoint the borrowers. As mentioned before, NBFCs are not bound by banking act and have relatively fewer rules. However, NBFCs do evaluate the repayment abilities of the borrower and process the loans accordingly. The immediate action of availing finances for the bike can also be attributed to the fact that two-wheelers are not such expensive assets. If there are many regulations which would delay the disbursal of the funds, the borrower would have to look out for the options for availing funds. NBFCs address this pain point of the customers and have been more relaxed on the rules, thus making the loan process a hassle-free one.
4. Loans for poor credit rating holders:
Such a feature works in favour of the borrowers who have poor credit due to multiple debts. The NBFCs do cater to the requirements of the individuals with loan application rejected customers by the banks. NBFCs do provide financial assistance to such individuals with higher rates of interest calculating the risk factor involved. Although it is advisable to avail newer loans after taking care of existing debts, such flexibility offered by NBFCs empowers individuals to buy their dream bikes.
Conclusion:
The benefits mentioned above are a few reasons why NBFCs are gaining prominence among the borrowers. In the customers’ perspective, you are glad that you have multiple options to avail financial assistance. Thus, the trend is a win-win situation for both the NBFCs and the customers. However, as someone who wants the best product, you need to look at various options before purchasing a two-wheeler.