Most of the middle-class borrowers cannot afford to make a lump-sum payment due to financial constraints, a Two Wheeler Loan allows them to pay monthly EMIs affordably. It’s critical to check your two-wheeler loan eligibility once you’ve decided to apply for one. Lenders are exceedingly careful and will only approve a loan after thoroughly examining the borrower’s repayment capacity. Because there has been a dramatic increase in the number of defaulters over time, thorough background checks are performed before the loan is disbursed.
To ensure that your loan application is not denied, you must have all the required documentation and state your specific source of income in order to receive prompt approval.
Two Wheeler Loan Interest Rate 2021
The table below compares the interest rates and processing costs charged by lenders in India, as well as the lengths of time they offer.
|Bank||Lowest Interest Rate||Processing fee|
|Bank of India||7.35% p.a. to 8.55% p.a.||Rs.500 – Rs.10,000|
|Union Bank of India||7.40% p.a. to 10.50% p.a.||NIL|
|Punjab National Bank||6.65% p.a. to 8.50% p.a.||Rs.500 – Rs.1,000|
|Axis Bank||7.35% – 28.30%||Up to 2.5% of the loan amount|
|L&T Finance||7.99% p.a. – 15.00% p.a.||At L&T discretion|
|State Bank of India (SBI)||16.25% p.a. To 18.00% p.a.||2% of the loan amount + GST|
|UCO Bank||UCO float rate + 4.80%||1% of the loan amount|
|HDFC Bank||20.90% p.a.||Up to 2.5% of the loan amount|
|Bank of Baroda||BRLLR + Strategic Premium + 4.00% i.e. 10.80% p.a.||2% of loan amount minimum Rs.1,000|
Eligibility for Bike Loan
The following are the standard eligibility conditions for two-wheeler loans:
- At the time of applying for the loan, the loan applicant must be at least 18 years old, with a maximum age limit of 65 years.
- To demonstrate residential stability, the applicant must have lived in the same house for at least one year.
- Applicant must have worked in a solid position for at least one year or be self-employed with two years of IT returns.
- The applicant must have a satisfactory CIBIL Credit Score from the credit bureaus.
- A permanent phone number is required, as well as KYC and other necessary documentation.
What Criteria Influence the Eligibility for a Two Wheeler Loan?
Your eligibility for a two-wheeler loan is determined by variables such as your income, credit score, and existing financial responsibilities.
- Credit rating:Your credit score is one of the most important variables that your lender considers when determining your eligibility. It’s a three-digit number that indicates whether or not you’ll be able to repay the loan on time. To qualify for a two-wheeler loan, you must have a credit score of at least 750.
- Salary: Your eligibility for a two-wheeler loan is also determined by your income. Because a two-wheeler loan is unsecured, you must show that you have a steady source of income to your lender. A lower interest rate is also guaranteed with a bigger income.
- Outstanding debts: If you have a lot of outstanding bills, it will affect your eligibility for a two-wheeler loan. You may not be offered a loan if your lender discovers that you have existing debts.
How to Improve Your Eligibility for a Two Wheeler Loan
The recommendations will help you get a better deal on a two-wheeler loan:
- Maintain a higher credit score: When applying for a two-wheeler loan, ensure that you have a credit score of at least 750.
- Choose a longer loan term: A longer loan term allows the borrower to pay off his EMI over a longer period of time. When you choose a longer loan term, your two-wheeler loan eligibility increases.
- Choose a shared loan: Your eligibility for a two-wheeler loan is increased if you have a co-applicant with a solid credit score.
- Show other sources of income: Having alternative sources of income suggests that you will be able to repay the loan without any delays or defaults.
Required Documents for a Two Wheeler Loan
A list of documentation necessary for a bike loan is as follows:
- Identity Proof:
- Aadhaar Card
- PAN card
- Driving License
- Electoral Voter Identity Card
- Address Proof:
- Aadhaar Card
- PAN card
- Driving License
- Latest Electricity Bill
- Latest Phone Bill
- Latest Bank Passbook reflecting the current address
- Property Documents
- Water bill
Supplementary Documents for Salaried Employees
- Employment or offer letter
- Last six months bank statements and latest form 16
- Last salary slips <45 Days
- Last three years income tax returns
- TDS Certificate
- Last six months bank statements
- Sales tax returns
- Company details
For loan processing, preserve both originals and photocopies of all essential papers.
The lender will process your two-wheeler loan application based on the given documentation, and you can anticipate a favorable loan approval.
Requirement of CIBIL Score to Get a Bike Loan
A CIBIL score is required for a motorcycle loan. A CIBIL score ranges from 300 to 900 points and is determined by examining and accounting for your credit history, including credit card payments. The minimum CIBIL score for a bike loan is 750, which allows you to get a low-interest loan. A poor CIBIL score does not rule out the possibility of obtaining a bike loan. It merely increases the loan’s interest rate.
The bike loan has a maximum term of 36 months, which makes it simple to divide into EMIs and repay the loan.
Yes, most banks and NBFCs allow you to pay off your loan early.
A two-wheeler loan does not require any type of collateral or security.
Electronic Clearing Service (ECS)
Post Dated Cheques (PDCs)
Yes, Advance EMI is available from several banks and NBFCs.