A two-wheeler loan is an ideal loan if you are looking to purchase your dream vehicle. You can easily apply for this loan at any bank or NBFCs. However, it's important to choose a bank that is completely transparent with all the fees that will be applicable on a two-wheeler loan. Charges are a crucial part of the loan. There are a number of charges charged for various purposes. In this article, we will learn about all the charges that are applied and their importance.
There are a lot of charges, fees and penalties that are applied. Before applying for a two-wheeler loan, it's very important to know all the applied charges and what would be applied in the future. There are also charges that can be avoided, so it is important to know the basics about charges.
The charges other than the two-wheeler loan interest rate applied by the bank can be divided into three categories-
Loan-related fee- In this category, you will have to pay charges that are a part of a two-wheeler loan. These charges may differ from one bank to another. You can avoid paying a lot of loan-related charges if you are applying during peak season or festivals.
Document related fee - In this category, you will be charged for getting your documents stamped, charged and certified. The charges vary according to your need. For example: If you want to get a CIBIL report, then you'll have to pay charges for that, but if you already have a credit report, then you don't have to pay those charges. So the charges that are applied in this category are mostly avoidable.
Legal/Government fees- In this category, you will have to pay charges applied by the government. These charges are compulsory and should be paid when incurred.
Loan-related fees
Application fee- It is a non-refundable charge that is applied by the banks while applying for a loan. If you are applying for a loan, then the first step is to get the application form. To get the form, you'll have to pay a certain amount. The charge usually ranges from INR 2,500-7000.
Penal Interest rate- It is very important to pay your EMI on time. If you ever delay the payment of your EMI, then you will be charged 2% to 3% of your EMI amount as a late payment fee.
Prepayment charge: This is also known as pre-closure charges. It is applicable if you are making a prepayment in full before the loan tenure ends. The fee charged usually varies between 2% of the outstanding amount. A lot of banks like PNB two-wheeler loan and Axis bank charge 4% of the amount.
Document related fee
Stamping charges- If you want to get any legal documents signed on stamp paper, then you will have to pay charges that will depend on the actual cost.
NDC charge- If you want to get a No Due Certificate (NDC), then you will have to pay a charge ranging from 0 to 500. And in case you need a duplicate copy of your NDC, you'll also have to pay a charge that ranges between INR 100 to 500.
CIBIL report- Lenders approve your application according to your repayment history in your credit report. So it's very important to show your credit report while applying for a loan. If you want a copy of your credit report from CIBIL, then you have to pay a charge between INR 100 to 1500. This charge will differ if you are asking for a credit report from other institutions like Equifax.
Legal/Government fees
Legal fees- The legal charges are already decided by the government for each loan. So you'll have to pay an amount based on your loan amount that will be charged by your lawyer before getting ahead with the verification process. Valuation fee: The fee will be charged by the banks to get your two-wheeler vehicle inspected and valued. The charge that you'll have to pay will depend on the charges that will be incurred by the bank.
Conclusion: There are other charges that are charged while applying for a two-wheeler loan. So it's important to choose a bank that is regulated by the Reserve Bank of India because those banks are transparent about all the costs that will be incurred during the whole loan process.
Also read this: Document verification in two-wheeler loan
